Results for 31 Dec, 2012 - NMC...2013/02/26 · 3 Strong Revenue and Profit growth in 2012 in the Healthcare, Distribution and consolidated segment. Successful IPO raising net proceeds

Results for 31st Dec, 2012

26th Feb, 2013

2

Dr. B. R. ShettyChief Executive Officer

3

● Strong Revenue and Profit growth in 2012 in the Healthcare, Distribution andconsolidated segment.

● Successful IPO raising net proceeds of US$168.1m

● All capital projects progressing well and within the budgets.

● Awarded significant contract to Operate and manage Sheikh Khalifa GeneralHospital in Umm Al Quwain.

● Series of positive regulatory changes introduced in the Healthcare sector.

● Significant opportunities for further growth in UAE backed by the favorablegeneral macro-economic conditions prevailing.

Overview

4

Prasanth ManghatChief Financial Officer

5

Financial highlights

Solid performance in 2012 reflecting demand in end markets and positiveoutlook.

Successful IPO raising net proceeds of US$ 168.1m

Revenue growth across Healthcare ($251.6m up 15.0%) and Distribution($271.1m up 7.0%).

EBITDA of $79.6m, up 12.9% and EBITDA margin of 16.2% (Yr 2011: 15.9%)

EPS of US$0.343 (Yr, 2011:US$0.331), a growth of 3.6%. EPS normalised toadditional shares excluding 55.7m shares issued at IPO, grew by 48.0%,.

Continued high cash flow generation with Normalised Operating Cash flow up255.8% (Yr 2012: US$38.7m; Yr 2011: US$10.9m).

Total Capex spend of $105m,of which $89.3m focused on new capital projects,of which US$82.3m focussed on new healthcare projects.

Total Debt of $303.6m and Total Cash $257.5m implies Net Debt of $46.2m

Net Debt of $46.2m

Revenue $490.1m, up 10.5%

Adjusted EBITDA 79.6m, up 12.9%

Normalised operating cash flow $38.7m, up 255.8%

EBITDA margin of 16.2%

EPS normalised up by 48.0%

6

Healthcare49%

Distribution & Services

51%

Revenue Breakdown- FY2012 EBITDA Breakdown- FY2012

Healthcare72%


28%

FY 2012 Breakdown of Cost Base – Healthcare FY 2012 Breakdown of Cost Base – Distribution

Revenue & EBITDA Models

Staff costs39%

Inventory recognised as

expense40%

Operating lease9%

Others12%

Staff costs10%

Cost of goods73%

Operating lease1%

Others16%

7

Group income statement

(US$m) FY 2012 FY 2011 % change

Revenue 490.1 443.7 10.5%

Direct Costs 329.8 306.4 7.6%

Gross Profit 160.3 137.4 16.7%

% margin 32.7% 31.0% 5.5%

General & Admin Expenses (105.1) (78.8) 33.2%

Other Income 24.4 11.9 105.0%

EBITDA(2) 79.6 70.5 12.9%

% margin 16.2% 15.9% 1.9%

Pre-operating Expenses - - -

EBITDA(2) 79.6 70.5 12.9%

Depreciation(3) (7.0) (12.0) -41.6%

Operating Profit(2) 72.6 58.4 24.3%

Interest (13.7) (16.9) -18.9%

Finance Incomes 4.3 1.1 290.9%

Others - Floatation costs / Rental IncomesChanges in fair value of derivative instruments (3.4) 1.2 -385.2%

Net income 59.8 43.8 36.5

EBITDA is stated after charging

Salaries and wages(1) 97.4 83.1

Rent(1) 21.0 18.8

(3) Change in Depreciation methodology - positive impact in P&L: US$5.3m in FY 2012Note: (1) Expenses captured within ‘Cost of sales’ and ‘General & Admin Expenses’(2) EBITDA, EBITDA and Operating Profit are non-IFRS line items

8

Healthcare highlights

(US$m)FY12($m)

FY11($m) % growth

Revenue 251.6 218.7 15.0%

Operating costs 183.4 161.8 13.3%

EBITDA(1) 68.2 56.9 19.9%

Margin 27.1% 26.0% 4.2%

FY12($m)

FY11($m) % growth

Capital expenditure (All new Projects) 82.3 11.7 603.4%

Capital expenditure (Maintenance) 14.1 4.4 220.4%

% of Revenue 5.6% 2.0%

9

Distribution highlights

(US$m)FY12($m)

FY11($m) % growth

Revenue 271.1 253.4 7.0%

Operating costs 244.9 228.5 7.2%

EBITDA(1) 26.2 24.9 5.2%

Margin 9.7% 9.8% -1.0%

FY12($m)

FY11($m)

Capital expenditure * 21.3 4.3

*In 2012, Company has commissioned warehouses and offices.

10

Capital Expenditure Financing

Cash Capex (US$ m) for FY 2012

83.9

37.1

17.820.4

105.3

29.8%

11.0%

4.6% 4.6%

21.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

0

20

40

60

80

100

120

2008 2009 2010 2011 2012

(US

$ m

)

Total capex % of sales

Total cash capex during FY 2012 was at US$ 105.3m, as:

(i) Maintenance Capex:US$12.3m,(ii) Distribution & other newCapex:US$10.8m (iii) Healthcare new projects WIP:US$ 82.3m.

Break up as:(i) Bright Point US$ 54.8m (ii) Mussafah Day Care US$ 6.1m;(ii) Khalifa City US$ 21m (iv) DIP Hospital US$ 0.4m.

▪ Total Additions in 2012 was at US$ 118.7m as:(i) Cash Spent: US$ 105.3; (ii) Advances: US$ 11.8(iii) Accounting Adjustment: US$ 1.8m.

Total additions of US$118.7 spent as:(i)Healthcare new projects: US$ 82.3m; (ii) Maintenance: US$ 14.1m; (iii) Distribution: US$ 21.3m (iv) Others: US$1.3m.

Healthcare Capital WIP : US$ 104.1m as (i) New Projects: US$100.3m (ii)Other Projects: US$3.8m. Uptodate Capex, project wise:

Project Contract US$ m

Capitalized Cost US$m

Accounting Adjustment

US$ m

Total Capex US$ m

Brightpoint 58.4 5.7 8.2 72.3

Mussafah Day Care 5.8 0.3 6.1

DIP Hospital 0.4 0.4

Khalifa City 20.6 0.9 21.5

Total 100.3

11

Working Capital Evolution

● During the year, working capital grew in line with the business.

● The working capital changes to cash from Operations has bounced back strongly in 2012, giving a leeway of US$ 38.7 (Yr

2011: US$ 10.9m) as Net Cash from Operating activities.

● The Working Capital Changes to Cash generated from Operations, 2012: 49%, 2011:78%.

73.50 (1.40) 16.20

0.80

91.90

5.38

43.25 5.96

143.69

18.19

25.22 ( 3.35)

185.25

37.6

61.0873.45

82.57

-

25

50

75

100

125

150

175

200

USD

Mill

ions

CASH FROM OPERATIONS

YE YE 2010

YE 2011

YE 2012Inventory Working capital

at year endReceivables change

Payables change

12

Continued strong cash flow generation

Cash Flow Profile

Notes: Capex for this purpose is cash payments for property, plant and equipment. Adjusted cash flow conversion defined as adjusted operating cash flow/adjusted EBITDAThe Group defines adjusted operating cash flow as adjusted EBITDA less changes in working capital less cash payments for property, plant and equipment(1) Adjusted for exceptional items; 2010 EBITDA is adjusted for US$0.2m rent payment on new Sharjah Medical Centre building before transfer of operations to the new facility. (2) Due from / to Related parties were not considered in Net working Capital Changes.

EBITDA Margins for FY, 2012 at 16.2% (15.9% in 2011)

Capex spent on existing assets for higher productivity.

Capex for new projects funded by equity and debt, hence not considered while arriving at the cash flow conversion.

Improvement in Net working capital position compared to FY, 2011.

Cash flow profile

USD '000 2008 2009 2010 2011 2012

EBITDA 33.9 41.9 56.6 70.4 79.6

Capex-Non Projects (83.9) (37.1) (17.8) (8.8) (21.1)

Change in NWC (22.3) 13.1 (16.3) (57.3) (40.1)

Adjustment for EOSB provision 1.1 1.4 1.4 1.8 2.1

EOSB paid (0.3) (0.3) (0.5) (0.5) (0.6)

Operating cash flow (71.6) 19.0 23.5 5.6 20.0

Cash flow conversion -211.1% 45.3% 41.5% 8.0% 25.1%

(300)%

(250)%

(200)%

(150)%

(100)%

(50)%

0%

50%

100%

150%

200%

(150)

(100)

(50)

0

50

100

2008 2009 2010 2011 2012

% A

djusted EB

ITDA

(US

$m)

EBITDA CapexChange in NWC Adjustment for EOSB provisionEOSB paid Adjusted cash flow conversion

13

Net Debt

● The significant reduction in the Net Debt was due to the movement in Cash and the Capital Expenditure.

● Syndicated Facility for financing projects of US$ 150m fully drawn down in Yr 2012. Cost of funds at 350 bps + 1m Libor. Of this US$18m was repaid in 2012. Also, a net reduction of US$ 10m in Other facilities.

● Deposits made on excess funds returns a blended rate of 2.75% (Range 1.75%-3.5%).

● Reduction of 18.9% in Finance Cost in Yr. 2012.

● Capitalisation of net-off finance costs and finance incomes: US$3.5m (as per IFRS)

128.2

121.411.6

8.8

105.0 (121.4)

(168.7)

(38.7)

46.2

0

50

100

150

200

250

300

350

400

Net debt 31 Dec2011

Debt facilitydrawndown

Net financecosts

Acquisition ofBR Medical

Suites

Capex Net cash inflowfrom debtfacilities

IPO proceeds(net)

Operating cashinflow

Net debt 31 Dec2012

(€m

)

14

Dividends

Dividends:

● Dividend Policy was stated at IPO, targeting a Payout Ratio of 20-30% of Profit After Tax.

● The Board is recommending that a final dividend of 4.1p per share be paid in cash in respect

of the year ended 31 December 2012, a pay-out ratio of 20% Profit after tax, subject to

Shareholders approval.

15

Binay ShettyChief Operating Officer

16

Overview of NMC Hospitals and Medical Centres

Established

No. of Beds

Accreditation

Staff

No. of Inpatients (FY 2012)

No. of Outpatients (FY 2012)

2012 Bed Occupancy

Specialty Hospital,

Abu Dhabi

Specialty Hospital,

Dubai

General Hospital,

Dubai

BR Medical Suites,Dubai

Specialty Hospital,

Al-Ain

MussafahDay Patient

Medical Centre

Sharjah Medical Centre

1975 2004 2008 1999 1996 2011 Mar, 2013* Planned for Q3 2013

Planned for Q4 2013

100 75 100(1) 10 – - NA 50(2) 60

JCI JCI JCI – – – – – –

1100 632 536 260 160 20 45(3) 250 45

20,025 7,689 6,108 1,387 - n/a n/a n/a n/a

585,855 205,290 246,551 134,948 95,490 n/a n/a n/a

68.4% 56.0% 55.6% 37.9% n/a n/a n/a n/a n/a

(1) Hospital has licensed capacity of 100 beds but currently has 45 beds(2) 50 beds planned for opening. Actual number of beds following completion may be different(3) Mussafah Hospital – Facility expected to commence operations in Mar, 2013.

Planned near-term expansion

Bright Point Hospital

DIP Hospital

1,527

17

25%

35%

45%

55%

65%

2007 2008 2009 2010 2011 2012

Spl. Hosp Abu Dhabi Spl. Hosp, Al Ain NMC Spl. Hosp, DubaiNMC Hosp, Dubai Overall

Bed Occupancy – FY 2007-2012

Outpatient Numbers – FY 2007-2012

Inpatient Numbers – FY 2007-2012

0

100,000

200,000

300,000

400,000

500,000

600,000

2007 2008 2009 2010 2011 2012Abu Dhabi Spl Hosp Al Ain Spl Hosp Dxb Spl Hosp

Dxb Gen Hosp Sharjah BRMS

Key Performance Indicators

▪ Overall Patients numbers grew by 10.4%, Yr. 2012:1,888,864 (Yr 2011: 1,711,653).

▪ Overall Bed Occupancy for 2012 at 60.5% (Yr 2011: 53.0%).

▪ Overall Inpatient numbers grew by 14.9%, Yr. 2012: 35,209 (Yr2011: 30,664).

▪ Overall Outpatient numbers grew by 9.9%, Yr. 2012: 1,269,661(Yr 2011: 1,154,889).

▪ Inpatient-Outpatient Ratio for Yr. 2012 at 2.8% (Yr 2011: 2.7%).

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2007 2008 2009 2010 2011 2012Spl. Hosp Abu Dhabi Spl. Hosp, Al Ain Spl. Hosp, DubaiNMC Hosp, Dubai Overall

18

Contd……Overall Patient Numbers – FY 2007-2012 Inpatient : Outpatient Ratio

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

2007 2008 2009 2010 2011 2012

Abu Dhabi Dxb Spl Al Ain SplDxb Gen Overall

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

2007 2008 2009 2010 2011 2012Total Number of Patients

0

20

40

60

80

100

120

140

160

180

200

2007 2008 2009 2010 2011 2012Abu Dhabi Spl Dxb Spl Al Ain SplNMC, Dubai Overall

Admissions / Doctor – FY 2007-2012

▪ Overall Admissions per Doctor improved by 16.2%, Yr2012 : 129 admissions per Doctor (Yr. 2011 : 111admissions).

▪ Overall Revenue Per Patient grew by 5.2%, Yr. 2012:US$ 105.7 (Yr. 2011: US$ 100.5).

20

30

40

50

60

70

80

90

100

110

2007 2008 2009 2010 2011 2012Spl. Hosp, Abu Dhabi Spl. Hosp, Dubai Spl. Hosp, Al AinDubai Gen Hosp. Sharjah BRMS

Revenue / Patient – FY 2007-2012

In U

S$

19

Management Contract

NMC has been awarded a five year contract to operate and manage the new Sheikh Khalifa GeneralHospital in the emirate of Umm Al Quwain, UAE. Under the terms of the contract, NMC Healthcare's fee income could range from US$4 million to

US$5.4 million in the first year of operation, subject to certain performance criteria being met.

All capital expenditure, hospital and staff expenses will be met by the UAE Ministry of PresidentialAffairs.

A Hospital Steering Committee comprising representatives of the Ministry will work closely withExecutive Management (provided by NMC Healthcare) to oversee the operation and management ofthe hospital.

As part of its contract, NMC Healthcare will also be managing all support services includingpharmacy, equipment sterilization and ambulance services as well as hospital administration.

At the end of the five years term of the agreement, the Executive Management team is expectedto train and hand over their responsibilities to new management to be employed by the Ministry.

20

Key Regulatory Changes / UAE Market Development

Health Authority of Abu Dhabi revised the billing rates for the Government funded basic Insurance plan

effective from 15th Oct, 2012, reducing the rates for some of the IP and OP procedures. No significant impact

on overall revenues.

Ministry of Health, UAE recently announced rationalization of the prices and margins of Pharmacy products.

Further details are awaited.

Government of Dubai has an Insurance plan for Government Employees. Mandatory insurance in Dubai is

expected and Sharjah Emirate has announced its intention to introduce mandatory insurance. Expect an

upside but not to the extent of Abu Dhabi.

Regulatory changes allowing Doctors licensed in either Abu Dhabi or Dubai Emirate to practise in both the

Emirates introduced. Creates synergies.

New Regulation introduced by Health Authority of Abu Dhabi not to issue new licenses to hospitals operating in

Abu Dhabi emirate in mixed used buildings leased partially for residential or other utilization purposes effective

from 30th Sep, 2012. Existing hospitals were given a time frame of 5 years to relocate their existing operations

to independent facilities.

▪ NMC Speciality Hospital in Abu Dhabi was given exemption from the above regulation as all the utilities,

entry points etc. of the hospital is independent of the residential units housed therein.

21

Quality Initiatives

The key priorities in our Clinical Governance are:

Safer Facilities

Clinical Excellence

Patient Experience

We are also pleased to report that:

● Zero incidence of pressure sores.

● The JCI re-accreditation of our Al Ain and Dubai Specialty Hospitals.

● ISO 15189 accreditation for our laboratory in the Dubai General Hospital and ISO 9001:2008 re-certification for our Abu

Dhabi Specialty Hospital in 2012 were achieved.

22

Healthcare – Growth Strategy

NMC Health’s key strategic growth objective is to continue to be a world-class integrated healthcare company and continue to enhance growth and operational efficiencies

Specific objectives as part of short to medium term growth strategy include:

Maximise the potential of existing healthcare facilities by increasing productivity, occupancy and capacity and by focussing on providing secondary and tertiary healthcare

Expand the our healthcare facilities, pharmacy network and services throughout the UAE

23

Healthcare - planned near-term expansion projects

A specialty hospital planned to be focused on maternity and paediatric care

Located in the heart of Abu Dhabi next to Al Jazira Club Land and building owned by Al Jazira Club Long-term lease has been negotiated

Expect to be the first to open a dedicated private maternity hospital in the UAE

Project completion delayed as the specialist flooring being used within the hospital, supplied by a third party, was found to be faulty needing replacement and re-work.

Expected to be operational by Q3, 2013 Project remains on budget.

Brightpoint Hospital, Abu Dhabi Mussafah Day Patient Medical Centre, Abu Dhabi

Facility caters to the community and will refer patients to NMC hospitals.

First Patient expected to be seen during Mar,2013.

DIP Hospital, Dubai

Facility will cater to the community and refer patients to NMC hospitals when required

It is envisaged that this facility is now planned to be opened as a general hospital by end of Q4,2013 instead of gradual phasing considering regulations.

All regulatory approvals in place and tendering for civil works has been completed.

24

Healthcare - planned long-term expansion projects

NMC Specialty Hospital, Khalifa City

▪ NMC Specialty Hospital, Khalifa City, Abu Dhabi – this new hospital is our largest project to date and isexpected to be the biggest hospital in the Group’s portfolio when it is fully functional by the end of 2016. TheHospital will open initially with a large range of outpatient services and 75 inpatient beds by end of 2014.

▪ Ground breaking was on 12th Dec, 2012.

▪ Civil construction has commenced and the initial phase of the project expected to be completed by the end of2014.

25

Distribution – supplying a ‘ Blue Chip Brands’ products portfolio

Regional Distributor of Leading Brands Sample of New Brands Introduced in H1 2012

Efficient Distribution and Logistics Platform

Planning and Forecasting

Inbound Logistics

Product and Information Flow

Freight Forwarding and Clearing Primary Transport Warehousing Invoicing Secondary

Transport

Availability, Visibility and

Promotion

After Sales Support & Reverse Logistics

Purchases from suppliers arrive in containers at ports (land, air, sea)

Containers are processed and cleared with custom authorities and any required clearances sought from respective government bodies (e.g. Ministry of Health for pharmaceutical and FMCG products and local municipalities for food products)

Containers transported from port to warehouses

Storage of products at warehouses

Purchase orders processed and customers issued with invoices

Transport of ordered goods from warehouse to customer’s premises

NMC Distribution sales and marketing professionals ensure that products are displayed at optimal locations where such products will be sold as retail. Additionally, equipment installation is done for Scientific Division. Moreover, product promotion support is provided

After Sales Support entailing handling customer feedbackReverse Logistics involve return of damaged and expired goods, product returns, etc

“Blue Chip Brands” portfolio under the distribution operation; NMC believes it is the distributor of choice

26

Recent Developments - Distribution

State of art new warehouse located in Dubai Investment Parks opened in August, 2012.

64,000 sq feet of storage and capacity of further 18,000 square feet of storage to accommodate

chilled, frozen and dry goods in a single facility.

The warehouse acts as a central distribution point for the Group’s Distribution business in Dubai.

Chilled and frozen storage capacity increased by around 23% and dry food storage capacity by

around 22%.

Savings in rentals to the tune of US$ 0.6m through easing out leased storage spaces.

73 new products launched during 2012 across six segments.

Continued increase in the number of new shopping malls in both Abu Dhabi and Dubai Emirates

saw increase in the retail activities.

27

Distribution – growth strategy

NMC expects to grow the distribution business’ market share within the UAE and the wider GCC region by leveraging its existing position of strength in the industry as well as expanding its market presence organically and via acquisition

Key drivers of NMC’s growth strategy for the distribution business include:

Benefit from the expected growth in the underlying market, which has strong fundamentals and is supported by population growth, long-term rising disposable incomes, aggressive marketing and brand strength

Expand our client base and product offering

Further strengthen existing logistics and distribution infrastructure.

28

Outlook

Strengthening macroeconomic fundamentals are stimulating business and employment prospects inUAE.

Implementation of mandatory insurance in Dubai and Northern Emirates expected to contribute to thegrowth in Healthcare segment.

Investment in retail space, growth in tourism and continued growth in population will be positive for ourDistribution segment.

The delivery of new projects, Brightpoint and Mussafah facilities and continued solid performance ofexisting healthcare facilities will drive growth in 2013.

We believe the momentum seen in 2011 and 2012 will continue and we view the year 2013 withconfidence.

29

Q&A

30

Appendix 1 – NMC Health overview

31

Healthcare industry overview – High growth market

UAE’s healthcare market is expected to grow by more than 12.7% annually from US$8.1bn in 2011 to US$13.0bn in 2016.

The market is characterized by Strong government support for increased private sector

participation Compulsory medical insurance coverage in Abu Dhabi covering

local and expatriate population Supporting trends such as

– Increased health awareness– Reduction in overseas referrals– Rising incidents of life-style diseases driving rising demand

for healthcare services

Overview Market Size (US$ bn)

Per Capita Healthcare Expenditure (2011) Bed Counts in UAE by Region (2011) UAE Healthcare Manpower KPI’s (2011)

32

NMC’s key divisions, key products and geographies

FY2010, FY 2011 and FY2012 Revenues by Business Division

Healthcare Distribution & Services

FY2010 FY2011

FY2010 FY2011

Specialty hospitals (3) General hospitals (2)(2)

Medical centers (2)

Hospitals & Medical Centres Pharmacies Pharmacies (8)(1) Pharmaceuticals

FMCG Food Scientific and medical equipment Educational and veterinary products

Distribution Services IT

Note: Financial breakdowns shown include intragroup trading(1) Includes 5 stand-alone community pharmacies and 3 inhouse hospital community pharmacies(2) Sheikh Khalifa General Hospital , Umm Al Quwain (Managed by NMC) and NMC General Hospital , Dubai

Healthcare68%


32%

Healthcare44%


56%

Healthcare69%


31%

Healthcare46%


54%

FY2012

FY2010, FY 2011 and FY2012 EBITDA by Business DivisionFY2012

Healthcare72%


28%

Healthcare48%


52%

33

Geographical segmentation

Abu Dhabi57%

Dubai and other

Emirates43%

FY2011 and FY 2012 Revenues by Geography

FY2011 and FY 2012 EBITDA by Geography

Abu Dhabi74%

Dubai and other

Emirates26%

FY2011 FY2012

FY2011 FY2012

Abu Dhabi54%

Dubai and other

Emirates46%

Abu Dhabi70%

Dubai and other

Emirates30%

34

Balance sheet at 31st Dec 2012

Balance Sheet (US$ m) Total capex US$ 105.3 Million including spend on existing

businesses.

Change in depreciation considering the useful life of assets. If the same rates were applied as in 2012 the additional depreciation would have been US$ 5.3 Million.

Bank balances includes Fixed Deposits of US$ 233.7 Million,

US$ 150 Million drawn down from the syndicated facility.

Debtor days gone up to 116 days from 108 days, mainly dueto healthcare receivables. Of these 58% are not due.

Increased Inventory levels due to increased Distributionactivities during H2, 2012 reflecting growth in end market andimproved market share.

Average Payable days was at 76 days similar to Yr.2011.

Controlled use of Working Capital – short term liabilitiesresulted in lower Current Borrowings despite the impact ofsyndicated loan of US$ 150 Million.

IPO raised net proceeds of US$ 168.1 Million.

Retained earnings of US$ 130.9 Million and Share Premium of US$179.1 Million.

Assets FY12 FY11 Change

Property and Equipment 202.7 94.9 113.7%

Bank balances and cash 257.4 54.1 376.1%

Other Current Assets 255.5 207.6 23.0%

Total Assets 715.6 356.6 100.7%

Current Borrowings 185.2 146.7 26.2%

Other Current Liabilities 68.7 65.2 5.4%

Current Liabilities 253.9 211.9 19.8%

Total Assets Less Current Liabilities 461.6 144.7 219.1%

Non-Current Borrowings 118.4 35.4 234.0%

Other Non-current Liabilities 11.6 8.9 30.9%

Total Non-current Liabilities 130.0 44.3 193.4%

Net Assets 331.6 100.3 230.5%

35

Abu Dhabi Dubai Al Ain

Patient Count (‘000)

No. of Beds and Occupancy Rates





679781 804 786 817

891

0100200300400500600700800900

1,000

2007 2008 2009 2010 2011 2012

No

of p

atie

nts

('000

s)

Outpatient Radiology Pathology Inpatient Other

142

219254

297 294 306

0

50

100

150

200

250

300

350

400

2007 2008 2009 2010 2011 2012

No

of p

atie

nts

('000

s)Outpatient Radiology Pathology Inpatient Other

140

257

323368

0

50

100

150

200

250

300

350

400

2009 2010 2011 2012

No

of p

atie

nts

('000

s)


96 96

100 100 100

46.3%55.4% 54.6%

60.4% 68.4%

2008 2009 2010 2011 2012

Number of Beds Bed Occupancy

65 65

75 75 75

36.3% 36.3%39.0%

51.1% 56.0%

2008 2009 2010 2011 2012


12

45 45 45

40.3%34.1%

44.9%55.6%

2009 2010 2011 2012


36

Dubai Hospital Sharjah Medical Centre




200 196 191 181 178201

0

50

100

150

200

250

2007 2008 2009 2010 2011 2012

No

of p

atie

nts

('000

s)


10 10 10 10 10

27.5% 33.6% 26.8% 30.4% 37.9%

2008 2009 2010 2011 2012


82

9499 96 99

0

20

40

60

80

100

120

2007 2008 2009 2010 2011 2012

No

of p

atie

nts

('000

s)

Outpatient Radiology Pathology

121

BR Medical SuitesPatient Count (‘000)

0.00.20.40.60.81.01.21.41.61.82.0

Outpatients Others Total

No

of p

atie

nts

('000

s)

1.6

0.1

1.5

37

Patient Counts – Facility-wise

Facility Inpatients Inpatients Outpatients OutpatientsRadiology & Pathology

Radiology & Pathology Others Others Total Total

FY 2012 FY 2011 FY 2012 FY 2011 FY 2012 FY 2011 FY 2012 FY 2011 FY 2012 FY 2011

Abu Dhabi Spl Hospital 20,025 17,623 585,855 545,564 242,005 218,703 43,262 35,552 891,147 817,442

Dxb Spl Hospital 7,689 6,998 205,290 193,861 82,331 83,159 10,466 10,233 305,776 294,251

Al Ain Spl Hospital 6,108 4,915 246,551 219,345 103,415 86,685 11,737 11,825 367,811 322,770

Dubai Gen Hospital 1,387 1,108 134,948 119,957 57,361 49,374 7,612 7,566 201,308 178,005

Total - Hospitals (A) 35,209 30,644 1,172,644 1,078,727 485,112 437,921 73,077 65,176 1,766,042 1,612,468

% Growth 14.9% 8.7% 10.8% 12.1% 9.5%

Sharjah Hospital - - 95,490 76,162 25,299 23,023 382 - 121,171 99,185

BR Medical Suites - 1,527 - 124 1,651 -

Total-Medical Centres (B) - - 97,017 76,162 25,299 23,023 506 - 122,822 99,185

% Growth - 27.4% 9.9% - 23.8%

Grand Total - Hospitals & Medical Centres (A+B) 35,209 30,644 1,269,661 1,154,889 510,411 460,944 73,583 65,176 1,888,864 1,711,653

% Growth 14.9% 9.9% 10.7% 12.9% 10.4%

38

Healthcare Segmentation

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

0

50

100

150

200

250

300

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Gro

wth

%

USD

Mill

ion

Hospitals Medical Centres Pharmacies YOY Growth Hospitals(%) YOY Growth Medical Centres(%)

Revenues

EBITDA

28% 31% 31% 20%

50%

-200%

167%

25%

-300.00%

-200.00%

-100.00%

0.00%

100.00%

200.00%

-20

0

20

40

60

80

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Gro

wth

%

USD

Mill

ion

Hospitals Medical Centres Pharmacies YOY Growth Hospitals(%) YOY Growth Medical Centres(%)

39

Contd……

Total Patient Counts (‘000) Total Outpatient Counts (‘000)

16%

10%6%

10%

5%

-3%

3%

24%

-5%

0%

5%

10%

15%

20%

25%

30%

0

400,000

800,000

1,200,000

1,600,000

2,000,000

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Grow

th %

Patie

nt N

umbe

rs

Hospitals Medical CentresYOY Growth Hospitals(%) YOY Growth Medical Centres(%)

24%

10% 9% 9%4%

-2%

4%

27%

-5%

0%

5%

10%

15%

20%

25%

30%

0

250,000

500,000

750,000

1,000,000

1,250,000

1,500,000

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Gro

wth

%

Patie

nt N

umbe

rs

Hospitals Medical Centres

YOY Growth Hospitals(%) YOY Growth Medical Centres(%)

24%

9%

5%

15%

0%

5%

10%

15%

20%

25%

30%

0

10,000

20,000

30,000

40,000

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Grow

th %

Patie

nt N

umbe

rs

Hospitals YOY Growth Hospitals(%)

Total Inpatient Counts (‘000)

40

Contd…..

20%10% 13% 5%

22%12%

84%

11%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

0

50

100

150

200

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Gro

wth

%

USD

Mill

ion

Hospitals Medical Centres YOY Growth Hospitals(%) YOY Growth Medical Centres(%)

Revenue / Patient (in US$)

12%

-2%

17%

14%

-5%

0%

5%

10%

15%

20%

0%

10%

20%

30%

40%

50%

60%

70%

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Gro

wth

%

Bed

Occ

upan

cy R

atio

Hospitals YOY Growth Hospitals(%)

Bed Occupancy

41

Healthcare revenue growth across all existing facilities

Revenues – FY 2012 US$M

Revenues – FY 2011 US$M

% Growth

79.7 43.2 31.8 10.8 7.3 Nil 39.0 7.0 218.7

Occupancy Ratio FY 2012

Growth 13.2% 9.6% 23.9% 24.8% - - - - 14.2%

89.7 48.3 39.8 11.7 8.9 1.2 43.7 7.4 251.6*

Spl Hosp, Abu Dhabi

Spl Hosp, Dubai

Spl Hosp, Al Ain

Gen Hosp, Dubai

NMCSharjah

BRMS NPCL BASP Total

* Incl US$ 0.9m of management fees for UAQ Hospital

12.5% 11.8% 25.2% 8.3% 21.9% - 12.1% 5.7% 15.0%

68.4% 56.0% 55.6% 37.9% - - - - 60.5%

Occupancy RatioFY 2011

60.4% 51.1% 44.9% 30.4% - - - - 53.0%

42

Contd……..

Spl Hosp, Abu Dhabi

Spl Hosp, Dubai

Spl Hosp, Al Ain

Gen Hosp, Dubai

NMCSharjah

BRMS NPCL BASP Total

Revenue / Patient 2012 100.7 158.1 108.3 58.1 73.3 733.8 - - 105.7

Revenue / Patient 2011

97.8 143.4 98.6 60.4 73.8 - - - 100.5

% Growth 3.0% 10.3% 9.8% -3.8% -0.7% - - - 5.2%

891.1 305.8 367.8 201.3 121.2 1.7 - - 1,888.9

817.4 294.3 322.8 178.0 99.2 - - - 1,711.7

9.0% 3.9% 13.9% 13.1% 22.2% - - - 10.4%

Total Patient CountFY 2012 - (in 000’s)

Total Patient CountFY 2012 - (in 000’s)

% Growth

43

Healthcare - existing expansion and development plans

Planned number of beds at completion

Key services

Estimated Number of employees in

first year

Estimated Outpatient Capacity(2)

Maternity Hospital

100 (1) ― 60

Obstetrics& Gynecology, Pediatrics, IVF Day patient care General Hospital

250 45 45

>27,000 >110,000 >60,000

(1) Estimate for outpatient capacity. Actual capacity may differ(3) The Maternity Hospital is estimated to have 50 beds at opening with the potential to increase to 100 beds

Mussafah Day Patient Medical Centre DIP Hospital

44

Key competitive strengths

Distribution

Long Standing Promoter with Many Strong Brands

Long standing market presence In operation since 1981 A vendor of choice Top distributor in launching and

establishing brands (e.g. Himalaya)

Bargaining Power andLong-term Contracts

Economies of scale enabling strong bargaining power

Long term contracts with Ministry of Health and Ministry of Education

Strong Management• Experienced and dedicated

management team• Highly trained professionals• 529 sales and marketing employees• 220 merchandisers, 72 promoters

Strong Distribution Network and Effective Infrastructure

Over 500,000 sq ft warehousing space with 8offices across UAE, 188 vehicles for deliveries

618 supply chain employees State-of-the-art IT network

Diversified Products Over 65,000 products 8 business divisions Products in division include:

Food/Pharmaceuticals/Veterinary/Educational items/Scientific/FMCG

45

Distribution Portfolio – FY 2012

Distribution Revenues & EBITDA – FY 2008-2012

174.9201.0

228.6253.4 271.1

12.1 11.7 19.8 24.7 26.2

15.0%13.7% 10.9%

7.0%6.9% 5.8%

8.7%9.8%

9.7%

Distribution revenue IT revenue Distribution Adjusted EBITDA IT Adjusted EBITDA Total Revenue growth Total Adjusted EBITDA margin

2008 2009 2010 2011 2012

Distribution Portfolio – FY 2011

Key Performance Indicators

Scientific 15%

Exports2%

Pharma 27%

Education4%

Veterinary1%

FMCG 45%

Food including catering

6%

Scientific 14%

Veterinary0%

Pharma 31%

Exports1%

Education4%

FMCG 41%

Food including catering

9%

46

Significant Changes in Accounting

● Reimbursement of advertisement and promotional expenses incurred on behalf of suppliers hasbeen reclassified from general and administrative expenses to other income – US$ 23.9m for Yr.2012 (US$10.7m for Yr. 2011).

● Change in the deprecation method from reducing balance to straight line and reassessed theuseful economic lives of all asset categories with effect from 1 January 2012. This was based on areview of the useful economic lives of the Group’s assets and market research. The impact of thesechanges is an increase in reported profit of US$5.3m in FY2012.

● To account for operating lease rental payable on a straight line basis in respect of BrightpointHospital. The terms of the lease includes a rent free period as well as specified rent increasesduring the lease term. The impact of this restatement is an increase of US$ 6.4m in the openingbalance of 2012 and US$1.8m for the year 2012. This was accounted in capital work in progressand other payables, which will be amortised over the life of the lease.

● On assessment of the fair value of the assets and liabilities of BR Medical Suites at the date ofacquisition was carried out and, as a result, Goodwill of US$ 1,016,000 has arisen and the samewas accounted under Intangible Assets. The total acquisition value was US$9.0m.

47

Governance

● NMC Health Plc as a newly listed Company have made great efforts in the area of Corporate and Social Responsibility, as

well as implementing robust governance procedures. The company remains committed to the highest standards of corporate

governance.

Key progress made during the 2012 financial year included:

●The appointment of an Independent Non-Executive Chairman and three Independent Non-Executive Directors, with

significant sector and public company experience.

● A formal Board process including Board meetings and monthly Board Reporting is in place.

● The implementation of formal monthly Senior Management meetings, to review business performance and strategies.

● Good progress in the implementation of financial reporting procedures recommendations resulting in significant changes in

our financial reporting process

●The appointment of an outsourced internal audit function, to conduct periodical internal audit reviews and to assist

management with the recognition of, and mitigation of, key risks facing the Group.

● The appointment of a Group Company Secretary with UK public company experience, to assist both the Management

team and Board with compliance and governance processes.

● The implementation of an enhanced capital expenditure approval process for new capital projects.

48

Appendix 2 –Management

49

Dr. B R Shetty CEO, MD and FounderGraduate in Pharmacy , Owner/President Management Program (OPM), Harvard Business School

Dr. Shetty is the founding partner of NMC and has led the group for over three decades. Under his leadership, NMCH has witnessed consistent high growth, transforming itself from a one room clinic in 1975 to become one of the largest hospital chains in the Middle East and establishing its distribution business as one of the top three distribution businesses in the UAEDr. Shetty has business interests across a range of diversified industries outside the NMC Health perimeter including Neopharma (pharmaceuticals) and UAE Exchange Centre, which is one of the largest money exchange houses in the worldDr. Shetty is a member of numerous Committees and Boards including the Advisory Board of Health Sector Strategy Committee of Abu Dhabi, the Executive Panel of Dubai’s Pharmaceutical & Health Equipment Trading Business Group and Advisory Board of Pharmaceutical Committee, UAEDr. Shetty’s contribution to the UAE has led to him becoming one of the first people to receive the ‘Order of Abu Dhabi’ for contribution to the development of the community and the cause of the Emirate in 2005. In addition Dr. Shetty was awarded the Padma Shri award by the Govt. of India for Outstanding Achievements in Trade and Business (2009)Dr. Shetty was conferred a doctorate from Georgia State University, Atlanta (USA)40 years industry experience38 years at NMC

Management team

50

Mr. Prasanth ManghatCFOFellow member of the Institute of Chartered Accountants of India (FCA), Bachelor of Science (1995), MG University, Kerala, India, CIA, ACCA from UK (2004), pursuing CA (Institute of Chartered Accountants of England and Wales)

12 years of experience in management of treasury and banking functions, corporate finance, accounting and financial reporting activities. Prior to joining NMCH, he has worked as Credit & Operations Head with Kotak Mahindra Finance, one of the leading non-banking financial institutions in India

10 years at NMC

Management team

Mr. Khalifa Bin Butti Executive Vice ChairmanGraduated in Business Administration with specialisation in Finance from Suffolk University, Boston, USA

Member and Director of the Omair Bin Yousif Group, one of the earliest and most respected business groups in the UAE, having interests in diverse sectors including oil and gas, engineering, properties and travel services

A key member of the Executive Management Team at NMC, being closely involved in the formulations of strategies, business / expansion plans and performance reviews across the various segments of the business

51

Mr. Binay ShettyCOOBSBA (Bachelor of Science in Business Administration from Boston University, USA (2004) with specialisations in Finance and Entrepreneurship

Prior to being elevated to the post of COO of NMC Health, he has held the position of COO of the Healthcare Division, Executive Director, planning and governance, Corporate performance review and new projects management

9 years industry experience

9 years at NMC

Management team

Documents

Results for 31 Dec, 2012 - NMC...2013/02/26 · 3 Strong Revenue and Profit growth in 2012 in the Healthcare, Distribution and consolidated segment. Successful IPO raising net proceeds