Inv Presentation Apr 08 - listed...
33
1 Roadshow Roadshow Investor Presentation April 2008 Bumrungrad Hospital Public Company Limited
Transcript of Inv Presentation Apr 08 - listed...
1
RoadshowRoadshow
Investor PresentationApril 2008
Bumrungrad Hospital Public Company Limited
2
Company HighlightsCompany 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
3
AgendasAgendas
• Introduction to BH
• BH Financial Performance
• Business Strategy
• The Bangkok Facility
• International Expansions
4
Introduction: Major ShareholdersIntroduction: Major Shareholders
SinsuptaweeAsset Management Company Limited
Others
Bangkok BankPublic Company Limited
Bumrungrad HospitalPublic Company Limited
(“BH”)
8.66%13.12% 1.08%
48.84%
Note: As of January 2008
Bangkok InsurancePublic Company Limited
FidelityInvestments International
8.36%
HSBC (Singapore)Nominees PTE Ltd.
8.06%
TemasekHoldings (Private) Ltd.
5.94%
IstithmarPJSC
5.94%
BH’s major shareholders are mainly founders, strategic partners and institutional investors
5
International BusinessOwns main hospital building
Introduction: Group StructureIntroduction: Group Structure
Bumrungrad Hospital Public Company Limited
(“BH”)
Bumrungrad MedicalCenter Ltd.
(“BMC”)
Comprehensive wellness center specializing in preventive care
Vitallife Corporation Ltd.(“Vitallife”)
100.0% 100.0%
Note: As of March 2008
BumrungradInternational Ltd.
31.5%*
* BH’s strategic partners in Bumrungrad International Limited are:- Istithmar 19.5%- Temasek 19.5%- Asia Financial Holding 19.5%- Bangkok Bank 10.0%
CDE Trading Co., Ltd.**(“CDE”)
30.0%
Dormant
** 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
Core business of BH is the renowned Bumrungrad Hospital
Asian Hospital Inc.(“AHI”)
Bumrungrad Hospital Dubai
Asia Renal Care Ltd.(“ARC”)
53.2% 49.0% 100.0%
6
Introduction: Fact SheetIntroduction: Fact Sheet
Facilities
Accreditation
One of the largest and most sophisticated private hospitals in South-East Asia554 inpatient beds and 3,500 outpatient capacity per dayThailand’s leading tertiary medical center
1st hospital in Asia to receive US JCI Accreditation1st hospital in Thailand with Thai Hospital Accreditation
Patient Volume& Revenue
Over one million patients treated annuallyInternational following with 430,000 international patients from 190 countries
Services19 specialist departments102 sub-specialist departments
With a 27 year track record, BH is now the leading healthcare service provider in South-East Asian region
Bangkok Facility
International Presence
Hospital GroupAsian 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
7
Dr. Sinn AnurasGroup Medical Director
Introduction: Management TeamIntroduction: Management TeamBH’s management team comprises individuals with extensive experience in healthcare management
Mr. Curtis SchroederGroup CEO
K. Linda LisahapanyaManaging Director
Mr. Dennis BrownCEO
Bumrungrad International Ltd.
Note: As of January 2008
Mr. Eric FoxCEO
Asian Hospital Inc.Philippines
Mr. Clyde H. EderCEO
Bumrungrad Hospital DubaiDubai, U.A.E.
Mr. Mack BannerCEO
Bumrungrad International, Bangkok
Mr. C.B. LimCEO
Asia Renal Care LimitedSingapore
Mrs. Lee Chan KhorCFO
Bumrungrad International, Bangkok
Ms. Karen CarterCOO
Bumrungrad International, Bangkok
Mr. Ralph BeatyCEO
Bumrungrad Al Mafraq Hospital Abu Dhabi, U.A.E.
Medical DirectorVitallife Corporation Ltd.
Ms. Janice ChanCEO
Bumrungrad International Holdings (Hong Kong) Limited
8
Operating PerformanceOperating Performance Y2003Y2003--20072007Total Revenue
Net Income
EBITDA
1,025
1,351
1,6641,928
2,070
0
400
800
1,200
1,600
2,000
2,400
2003 2004 2005 2006 2007
EBIT
DA
(TH
B m
m)
19% CAGR
4,620
5,8096,807
7,896
8,584
829
0
2,000
4,000
6,000
8,000
10,000
2003 2004 2005 2006 2007
Sale
s (T
HB
mm
)
20% CAGR
935
666
1,053 1,096
1,147
458
0
300
600
900
1,200
1,500
1,800
2003 2004 2005 2006 2007
Net
Inco
me
(TH
B m
m) 25% CAGR
DILUTED EPS
0.781.01
1.21 1.26
1.85
0.0
0.5
1.0
1.5
2.0
2003 2004 2005 2006 2007
Dilu
ted
EPS
(TH
B)
Source: Audited FS
Source: Audited FS Source: Audited FS
24% 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
9,413
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
1,605
Source: Audited FS
9
Margins & TrendMargins & Trend
• 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
Gross Margin Trend
38.5%
37.6%37.6%
35.6%
36.7%
34.6%
30%
32%
34%
36%
38%
40%
2002 2003 2004 2005 2006 2007
EBITDA Margin Trend
22.3%20.6%
23.4%24.5% 24.5% 24.2%
10%
15%
20%
25%
30%
2002 2003 2004 2005 2006 2007
Net Profit Margin Trend vs. Effective Tax Rate
15.5%17.1%
13.9%16.1%
14.4%
6.2% 28.5%28.6%
17.2%12.8%
0%
4%
8%
12%
16%
20%
24%
2002 2003 2004 2005 2006 2007**0%
20%
40%
60%
80%
100%Net Margin (LHS)Effective Tax Rate (RHS)
* No tax payment in 2002 and 2003 because of tax-loss-carried-forward** Net margin in 2007 includes one-time non-operating items
10
Leverage Leverage Debt to Equity
Net Debt to Equity
0.39
0.27 0.28
0.97
0.37
0.00
0.20
0.40
0.60
0.80
1.00
2003 2004 2005 2006 2007
0.680.54
0.41
1.99
1.03
0.00
0.50
1.00
1.50
2.00
2003 2004 2005 2006 2007
x
x
Interest Coverage
15.6
18.717.7
8.5
11.4
0.0
4.0
8.0
12.0
16.0
20.0
2003 2004 2005 2006 2007
x
• Significant improvement of the balance sheet over the years as:
• Debt outstanding position decreases
• Shareholders’ equity improves as a result of better performance
11
Business StrategyBusiness Strategy
BusinessStrategy
BusinessStrategy
Bangkok Capacity Expansion
Bangkok Capacity Expansion
Selective domestic acquisitions/affiliations
Selective domestic acquisitions/affiliations
Dominant healthcare provider in the region
Dominant healthcare provider in the region
Ancillary businesses: VitallifeAncillary businesses: VitallifeInternational expansion
through Bumrungrad International Limited
International expansion through Bumrungrad International Limited
12
The Bangkok FacilityThe Bangkok Facility
13
Revenue BreakdownRevenue Breakdown
Inpatient vs. Outpatient - Quarterly (% of revenue) Method of Payment (% of revenue)
• 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
Info. as of December 2007
Self-pay70%
Corporate contracts
17%Insurance
13%46% 46% 47% 49% 49%
54% 54% 53% 51% 51%
0%
25%
50%
75%
100%
2003 2004 2005 2006 2007
Inpatient Outpatient
14
Volume Contribution by Nationality Revenue Contribution by Nationality
International PatientsInternational PatientsGrowth in International 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”
294,643
353,660378,613
417,906 413,203
0
100,000
200,000
300,000
400,000
2003 2004 2005 2006 2007
OPD
Pat
ient
s
OPD
International Patients
9% CAGR9% CAGR
9,233
11,72612,946
14,04813,195
0
5,000
10,000
15,000
20,000
IPD
Pat
ient
s
IPD
41%53% 54%
51% 47% 46% 45%
55%49%
59%
0%
20%
40%
60%
80%
100%
2003 2004 2005 2006 2007
% o
f Rev
enue
International Thais
33% 38% 41%
64% 62% 59% 59%
36% 41%
67%
0%
20%
40%
60%
80%
100%
2003 2004 2005 2006 2007
% o
f Vol
ume
International Thais
15
Bangkok Facility Expansion PlanBangkok Facility Expansion PlanBumrungrad International Bangkok plans to expand and upgrade its facilities over the next 5 years
New BI Clinic
The facilities will give a better overall hospital experience for the patientsIncreased capacity in the Bangkok facilities will double clinical revenue capability
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 10th year
• To convert some space into additional ICU beds
Outpatient: 3,500 6,000 patients per dayInpatient: 500 650 beds
16
Capacity PlanCapacity PlanInpatient - Open Beds
Capacity
458 458499
531468
649
Outpatient Visit Capacity per day
6,0006,0005,500
5,000
3,500
4,500
0
1,000
2,000
3,000
4,000
5,000
6,000
2007 2008E 2009E 2010E 2011E MaxCapacity
• Ground Fl
• Fl 11-Health Screening Center
• Fl 17• Fl 18
• Fl 19Maximum 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
• Fl 20
468 499 499 540
32
109
458458
0
100
200
300
400
500
600
700
2007 2008E 2009E 2010E 2011E Max
Reacquired BuildingExisting Hospital Building
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
17
CAPEX ProgramCAPEX Program UpdateUpdate
0
400
800
1,200
1,600
2,000
2007 2008E 2009E 2010E 2011E 2012E
Existing hospital buildingReacquired buildingNew BI ClinicMaintenance
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
- Reacquired Building THB 1,142 million(BH Tower)
- Existing hospital building THB 831 million
Total THB 3,042 million
CAPEX allocated by project
CAPEX allocated by asset type
THB million
988
1,968
1,140 1,227
841966
0
400
800
1,200
1,600
2,000
2007 2008E 2009E 2010E 2011E 2012E
Construction in ProgressEquipment & softwareBuilding and Construction
988
1,968
1,1401,227
841966
THB million
18
An All New Concept An All New Concept –– New BI ClinicNew BI Clinic
Ground Floor(0pened 5 Feb 07) Sky Lobby
(To open May 08)
Ground Floor Lobby, Parking and Executive Health Screening Center of the new outpatient building are now open
19
An All New Concept An All New Concept –– New BI ClinicNew BI Clinic
Health Screening Center(Opened 2 Mar 07)
“The Mezz”(To open May 08)
20
• The rolling renovation of the inpatient wards of existing hospital building started in Feb 08
• First floor to be renovated is 9th floor
New 11th Floor Patient Lobby
Complete Renovation Complete Renovation –– Existing Inpatient WardsExisting Inpatient Wards
21
Complete Renovation Complete Renovation –– Inpatient RoomsInpatient Rooms
The hospital room of the future – today!
New Inpatient Rooms
22
Bumrungrad International Limited Bumrungrad International Limited Network & LocationsNetwork & Locations
* # 1 Market Position for ARC** # 2 Market Position for ARC(Among private providers, excludes public sector and NGOs)
Presence in 7 countries, with 83 hospital and clinic locationsARC: 10 Locations*
ARC: 2 Locations
ARC: 33 Locations**
Asian HospitalARC: 10 Locations*
ARC: 19 Locations*
ARC: 6 Locations*
Bumrungrad Hospital Dubai
Bumrungrad Al Mafraq Hospital, Abu Dhabi
U.A.E.
Malaysia
Singapore
South Korea
Japan
Taiwan
Philippines
23
Bumrungrad International Limited Bumrungrad International Limited Capital InfoCapital Info
Total: THB 3,898 millionBBL
THB 422 million
Asia Renal CareTHB 2,590 million
(USD 75 million)
Remaining Commitment by Bumrungrad International Limited’s shareholders are THB 450 million,Pro-rated by shareholding percentage (THB 142 million for BH)
Total: THB 3,898 million
BHTHB 1,008 million
IstithmarTHB 823 million
TemasekTHB 823 million
Asia Financial HoldingsTHB 823 million
Asia Financial HoldingsTHB 666 million(USD 20 million)
Bumrungrad Hospital Dubai, THB 94 million (USD 2.7 million)
Working CapitalTHB 548 million
Capital Injected InvestmentsNote: As of February 2008
24
Bumrungrad International Limited Bumrungrad International Limited Current PortfolioCurrent Portfolio
Asian Hospital, Inc. (“AHI”)
Bumrungrad Hospital Dubai
Other shareholders:Dr. Garcia 8.8%Insular Life 12.7%Filinvest 8.9%Others 16.3%
53.2%* 49%
Other shareholder:Istithmar 51%
* Total percentage of ownership
Asia Renal Care Ltd.(“ARC”)
100%
Bumrungrad Al Mafraq Hospital, Abu Dhabi
Management Contract
Investments
Ownership
Partners Contractor:Health Authority of Abu Dhabi
Amount & Year invested (by Bumrungrad International Limited)
USD 75 million 2007 NA2007
USD 10 million 2005USD 10 million 2008
USD 0.7 million 2006USD 2.0 million 2007
Business 346-bed private hospital 250-bed private hospital Chain of dialysis clinics(80 clinics)
460-bed public hospital
-
25
Asian Hospital, the Philippines (AHI) Asian Hospital, the Philippines (AHI) Company ProfileCompany 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
26
Asian Hospital Asian Hospital Expansion PlanExpansion Plan
Phase IPhase II
Existing BuildingNew 17,500 sq.m. 14-storey Building
Purpose Conversion of multi-bedded rooms into single rooms and adding additional diagnostic
and therapeutic services
A Remaining
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
27
Asia Renal Care Limited (ARC) Asia Renal Care Limited (ARC) Company ProfileCompany 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
28
• 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 Koreahas been opened
• Management’s strategy is to continue to aggressively expand the ARC network, especially in the next 2-3 years
No of Clinics
8077
6760
4049
0
30
60
90
2003 2004 2005 2006 2007 Mar 08
Since Bumrungrad International Limited’s acquisition of ARC in June 2007, ARC management has been actively pursuing expansion plans:
Asia Renal Care Asia Renal Care Facts & Figures, Expansion PlanFacts & Figures, Expansion Plan
29
Bumrungrad Hospital Dubai, U.A.E. Bumrungrad Hospital Dubai, U.A.E. Hospital SiteHospital Site
30
Bumrungrad Hospital DubaiBumrungrad Hospital Dubai Investment ProfileInvestment Profile
Shareholding • Bumrungrad International Limited holds 49% in the operating company of Bumrungrad Hospital Dubai
Partner • Istithmar, prominent government-owned investment company
Investment size
• The investment size of the hospital is being re-assessed
Hospital size • 250 beds; first phase 153 beds
Progress • Hospital currently under construction• Expected to be operational in 2009
PartnerContribution
• Istithmar provides land & building through a lease to operating company• Bumrungrad International Limited will have management control and provide H2000
software systems
31
Bumrungrad Al Mafraq Hospital, Abu DhabiBumrungrad Al Mafraq Hospital, Abu Dhabi,, U.A.E. 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
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
Patient Volume • ~310,000 patients, including more than 25,000 inpatients annually
32
Bumrungrad International LimitedBumrungrad International Limited In SummaryIn 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
33
2008 Strategy2008 Strategy
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
Bangkok Facility
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
International Expansion
