Philips Capitalimages.philips.com/.../Documents/philips-capital-one-stop-finance.pdf · France Greater China Iberia IIG India Japan LatAm MET NAM Nordics Russia & Central Asia UK

Philips CapitalYour one-stop financing resource

Philips Capital

May, 2016

Contents

• How we can help grow your business

• Sources and solutions

• Long-term partnerships

• Best practises

• Case studies

• Summary

July 11, 2017 Philips Capital2

3 Philips CapitalJuly 11, 2017

For more than 120 years, Philips has improved people’s lives through meaningful innovation

We’re aiming to improve the lives of

three billion peoplea year by 2025

Our legacy in healthcare has been built on meaningful innovation in many different areas, including financing

July 11, 2017 4

Our vision is to provide end-to-end solutionsthat satisfy your needs

How can we help your business?

• We are constantly adapting to your needs and to the rapidly changing nature of the markets

• Our one-stop financing model means we can take care of all your financing needs

• Our vision is to provide end-to-end tailored solutions, for small and simple or large-scale

projects

• Our team’s unique mix of expertise, scale and speed helps you take advantage of increasingly

robust financial markets


Our commitment to you

We will:

• Initiate unique, personalized strategies to meet your needs

• Enter into partnerships with third-party financial institutions

• Offer direct financial support in certain situations

• Ensure that our experts are closely connected with your local cultures, business environments and needs through our global network

• Build long-term relationships where you benefit from the wealth of Philips’ innovation, understanding and expertise


The Philips Capital team is comprised of experts from a wide range of disciplines


Philips CapitalPeter Warmerdam

CEO

AfricaASEAN & Pacific

BeneluxCEE

DACHFrance

Greater ChinaIberia

IIG

IndiaJapanLatAmMETNAM

NordicsRussia & Central Asia

UK & Ireland

Center of Expertise

PAHR business

partner

Markets

Finance business partner

Hester Boomgaard

Risk & Portfolio Management

Marcio Barbosa

Project Development & Structured Finance

Nalin Sachdeva

Sources and solutions

Identifying the best financial structure

We offer:

• Finance / operating lease

• Full service lease

• (Soft) Loan

• Supplier’s credit

• Export & trade financing

• Sale of receivables

• Buyer’s credit

• Equity

• Project finance

• Public / private partnerships


Our packagesWe can help arrange a myriad of financial structures


Loan structures

Finance / Operatingleasing

Equity participation

Managed Equipment Services

Pay Per Use

Supplier’s credit

Complexity of solution

Integration in solution / deal size

Our structured payment plan offers predictability and flexibility


Conventional cash transactionTotal cost of ownership over time

CAPEX

Maintenance & service

Average total cost of ownership

Managed Service agreementTotal cost of ownership over time

Lower total cost of ownershipReduction in equipment cost burden

From transactional to partnerships


Level of Partnership

Complexity

CAPEX

Finance lease

Operating lease

Managed service

Profit sharing / Clinical outsourcing

Pay per Use

Public / Private- Private Partnership (equity)

Finding ways to keep healthcare affordable and

sustainable

From traditional banks to impact investors


“Soft”

Accessibility

Commercial loans

(Social) Impact investor

Outcome- / performance-based financing

Bi-lateral protocols

Export finance

Soft loan

Finding the most suitable financial

source

Financial sourcingDeliver appropriate funding resources

• We partner with global relationship banks as well as with strong local/regional financial institutions.

• In certain markets we have dedicated partnerships and branded programs (e.g. Philips Medical Capital)

• We have strong relationships with multilateral development banks, international finance Institutions and (development) funds


Financial sourcingAssessment of most beneficial (combination of) financing structure


Services

Loan / Lease agreement

Equipment

End user

Consultancy / Training

Moving towards long-term partnerships

PhilipsCustomer

Changing healthcare environment requires new business models and partnership strategies


PhilipsCustomer

Shared accountability modelJoint focus on partnership goals with shared risk and

performance incentives

Traditional transactional modelPayments for equipment

and services at discounted pricing

Business model evolution

Common goals

PredictabilityShared riskContinuous

improvementReduced OPEX

Innovation

Our managed services model is about partnership

A managed services partnership with Philips is• comprehensive;• end-to-end;• aligned to your strategic initiatives;• structured around a specific business/financial model

Our partnership framework establishes a long-term strategic collaboration built on flexibility, transparency, shared governance and mutual accountability.


Managed services overviewComprehensive solutions for long-term services management


Managed

Services

Partnership

Technology management

Equipment services

Clinical education

Performance improvement

Consulting

Financing

Innovation

Improved clinical qualityWorld-class, patient- and family-centered

care that is safe, effective, timely and appropriate

Greater efficiencyEfficient delivery of patient services and

operational activities across the continuum of care

Market leadershipLeading in the innovation and delivery of

new clinical services and medical technology for patients in your community

Resource optimizationAbility to better deploy and manage

resources (people, technology, capital) to support strategic goals of system

Managed services partnership foundations

Business framework• Typically 15-year term

• The agreement can cover medical technology, operations, services, innovation and financing, depending on

your needs

Financial model• Technology-as-a-service model: moving from reactive, short-term capital planning to a predictable, known

expense structure

• Performance-based incentive program based on clinical, operational and financial outcomes

Operating model• Dedicated on-site staff

• Integrated governance and operating structure

• Joint responsibility for planning, specification, selection, procurement, upgrading and replacement of all

equipment in scope


Managed services partnership benefits


• Lower total cost of ownership

• Reduce investment costs

• Standardization enhances clinical accuracy

• A secure, long-term arrangement

• Accelerated access to new technologies

• Keep all current equipment and software under contract

• You have a predictable payment structure instead of volatile capital spending

Managed equipment services partnershipEach partnership consists of a unique combination of various solution components


Benefit Clinical Financial Operational

Capital asset plan Timely access to new systems ++

Technology innovationAccess to innovation when

available++

Maintenance managementAvailability of medical

technology+ ++

Procurement Hassle free, simplification + ++

System integration & program managementSingle point of contact and

liability+ + ++

DesignSeamless technology interface

with patient++ +

EducationOptimization of use of

technology++ + +

Healthcare transformation services Performance solutions + + +

Research and innovationBringing care faster to the

patient++

Financing servicesDo more with available budget, cost control and predictability

++

Managed services contractBenefits: monthly flat fee / full-service lease concept

• Transparent and predictable budget forecasting

• Preservation of cash position and funding exposure capacity with banks

• Finance up to 100% of total investment (incl. installation + software + VAT) without down payment/ equity contribution

• In case of operating lease (1) no ownership and aging and/ or devaluation risks; (2) lower monthly payment, due to residual value; and (3) lower tax bite, due to tax spread out/ paid over time

• Shortening of the balance sheet and therefore indirectly strengthens net worth position with potential access to cheaper funding

• Expand, replace or upgrade if and when required


Our long-term partnerships span the globe


Summary

• Our partnership strategy helps your business grow

• Our solutions are always unique so they precisely match your requirements

• You have the reassurance of long-term support from a world leader in healthcare

• Our approach has already been proven successful around the globe

Contact details


AfricaBusi [email protected]+27 (082) 555 58 61