H1 2019 Results Presentation 22 August 2019 Safe harbour statement - - PowerPoint PPT Presentation

H1 2019 Results Presentation

22 August 2019

2

Safe harbour statement

3

Strong first half, delivering double-digit revenue growth

3

Continued market leading performance Investment in verticals delivered

• rganic and inorganic growth

Progressed with integration while maintaining quality standards Strengthened the balance sheet and improved leverage Provided growth opportunities for NMC’s network Continued successful execution of strategy in H1 2019

Key y H1 2019 Highlights ts

• Evolved our Multispecialty vertical

with nephrology becoming a key focus area in Centres of Excellence

• Reinforced the Fertility business’ #1

position as a global leader by leveraging Harvard relationship

• Expanded the Long-term care

business to provide outpatient rehabilitation care

• Generated higher revenue through

cross referrals to other segments from the O&M vertical

4

Good progress against strategic growth drivers

4

• DRG implementation in

Dubai from this year

• Positive reforms

catalyzing healthcare market in Abu Dhabi

Government Initiatives KSA Partnership

• Completion of KSA

Partnership

• Creation of one of the

largest healthcare

• perations in KSA
• One of the top landmark

events in history of NMC since inception

Raising acuity

• Internationally

associated paediatric

• fferings gaining

momentum

• Centre of Excellence at

trauma (NMC Royal) attracting complex patients

• Medical tourism focused
• n elective cases in

NMC Royal DIP

• Affiliation with Harvard

Medical School uplifting NMC’s IVF platform

Mandatory insurance

• Oman started

implementing mandatory insurance on limited scale

• Sharjah and Northern

Emirates expected to launch mandatory insurance imminently

5

Evolution from a family owned business to a FTSE-100 company

5 Management and Board committed to balancing business growth, enhancing transparency, improving governance and adherence to ESG standards

• Aligning management and shareholder interest
• Consideration being given to most appropriate management KPIs to further align with shareholder

interest

• Consultation period will take place to give consideration to appropriate metrics
• E.g. shift in focus from EBITDA to EPS, cash flow or returns metrics
• Commitment to enhance transparency
• Already actively engage with shareholders
• Increased depth and frequency of communications
• Established related party committee
• Investing in and promoting the highest standards in ESG

COO Presentation

22 August 2019

7

NMC Group H1 – 2019 at a glance

Revenue Per Patient Growth (y.o.y)

17% 26% y.o.y growth in

LTC patients across GCC

NMC Health patients in H1 2019:

>4mn 16.7% y.o.y

Growth in patient volume in UAE (y.o.y.):

6.4% 55% y.o.y growth in

IVF cycles across the Group

26% y.o.y growth

in operational beds across the Group

7

8

Healthcare – Strong platform continues to deliver growth

Multispecialty Maternity & Fertility Long-term & Home care Operation & Management Total Healthcare

• No. of Countries

4 11 2 10 20 Revenue (US$ ‘000) 695,975 164,495 82,567 14,650 957,687 % Growth (YoY) 33.6% 43.9% 30.8% 89.1% 35.7% % of Healthcare revenue 72.7% 17.2% 8.6% 1.5%

• Revenue / patient (US$)

168 1,419 20,637 224 % Growth (YoY) 15.7% 32.4% 3.4% 16.8%

Capacity

Licensed beds 1,599 106 502 2,207 % Growth (YoY) 16.5% 0.0% 3.5% 12.4% Operational beds 1,395 100 427 1,922 % Growth (YoY) 26.4% 0.0% 31.0% 25.6% % Spare capacity 13% 6% 15% 13% Patients 3,905,390 115,889 4,001 4,025,280 % Growth (YoY) 17.0% 8.7% 26.5% 16.7% % Bed occupancy 61.2% 79.7% 86.1% 67.7%

8

H1 2019

9

Dubai

NMC UAE Business Continues to Achieve Year over Year Growth

Abu Dhabi

• 13% yoy growth in outpatient volume and 30% yoy

growth in inpatient volume

• Hub of centralization initiatives -laboratory, CSSD,

CV services

• Over 300 critical patients received under 999

Emergency contract since March 2019

• 14.8% yoy growth in pediatric outpatient services

NMC Royal Hospital, Khalifa City

• 71% reduction in average OPD waiting time
• 43% reduction in average pharmacy turnaround

time

• 16% decline in annual expenses resulting in

savings of $13mn against budget NMC Ruwais Hospital

• 13% yoy growth in outpatient volume
• Recognized as COE in Hernia Surgery and

Gastroenterology by Asia Pacific Hernia Society and World Endoscopy Society respectively NMC Specialty Hospital, Abu Dhabi

• Received the Best Vendor Award for the

3rd time for the management of UAE University project

• 8% yoy increase in Emirati patients

NMC Specialty Hospital, Al Ain

• 32% yoy growth in outpatient volume and

11.5% yoy growth in inpatient volume

• Exclusive MOU with Dubai Corporation

Ambulance Services

• Launched the Centre for Digestive Diseases

NMC Royal Hospital, DIP

6.7% and 6.2% YoY total patient growth seen in Abu Dhabi and Dubai regions

Dubai facilities have been practicing shadow billing for 18 months and are fully equipped to handle the upcoming changes from DRG implementation

• 54% yoy increase in cardiac surgeries volume
• 8% yoy increase in inpatient volume

NMC Specialty Hospital, Al Nahda

9

10

Highly profitable O&M vertical reaps benefits in multiple areas

Additional O&M benefits

Cost optimization and revenue enhancement in various areas through cross utilization of resources Distribution revenue in Pharmacy, Consumables and Devices, and Turnkey projects for Medical Equipment Supply Optimization of Infrastructure by reduction of CapEx Data management through the use of our own IT software In H1 19, we have dedicated additional senior leadership resources generating O&M income of US$15m (with 70-80% net profit conversion), as believe we have the capacity and capability to continue sourcing O&M opportunities across the region

Major O&M Contracts

Ministry of Presidential Affairs Abu Dhabi National Oil Company Emirates Hospital Group UAE University

10

11

Operational Highlights: ProVita and CosmeSurge

19% yoy growth in patient volume across UAE 142 operational beds in UAE (14% yoy growth)

Provita / LTC

+80 additional bed capacity in UAE and Oman by H1 2020 Launch of 2 new facilities (Bareen & NMC Ruwais) with 5 upcoming units in H2 2019 and 2020 Impressive yoy growth in patient volume across all facilities

CosmeSurge

Launched new service lines and technology

11

12

NMC Fertility: From Spain to IVF around the Globe

NMC’s Fertility business has transformed from a two clinic situation in 2015 to become the largest and most diverse network of fertility clinics in the world NMC’s solid expertise in Europe, coupled with inhouse resources, operational expertise and clinical research serve as the right ingredients for the group’s global expansion A conglomeration of over 70 fertility clinics with a pan continental presence across Europe, GCC, East Africa, Latin America and North America

12

13

Fertility business – Key Operational Highlights

Recognized

Our European clinics continue to leverage its capacity and expertise as the world’s largest oocyte donation program, with the opening of cross border links from Spain between Denmark, Italy, Sweden and Latvia Created a global R&D program, consolidating the activities of more than 25 full-time equivalents (FTE) dedicated to R&D worldwide producing around 40 studies and 150 active communications per year in 175 congresses Launched Eugin Education which encompasses:

• EBART congresses every two years
• Campus EBART every six months
• Masters Degree in Human ART

Reached global agreements with 2 top industry suppliers to leverage on Group’s purchasing capacity Fakih IVF continues to be the leading provider of fertility services in the GCC region

• Fakih IVF Oman has become the preferred infertility

treatment partner for MOH Oman IPC (International Patient Care) Department, Oman Royal Police and GHQ (Ministry of Defence)

• Collaboration with Cleveland Clinic Abu Dhabi oncology

department for fertility preservation through cryopreservation Introduced the ROSI (Round Spermatid Injection) treatment, an innovative method to enhance the success rate for male patients

13

14

NMC Healthcare KSA – Updates and Milestones

• Over 300,000 patients were seen across KSA
• The average occupancy rates across all KSA legacy portfolio assets is above 75%
• CCSMC in Jeddah continues to outperform expectations, with 96% occupancy, additional service

lines, and licensing of additional beds

• Salam Hospital Riyadh has rebranded to NMC Specialty Hospital, and improved occupancy rates

from less than 40% to 76%

• Cross-clinical resource program involving

sharing and utilization of existing clinical resources

• Centralization of procurement functions and

standardization of suppliers is progressing well

• Key support staff from UAE have been

deployed to aid and expedite the integration process with CARE

• NMC Trading is helping replicate the UAE

cost optimization benefits model

Progress on Synergies

• Appointment of key new personnel: COO &

CFO

• Ongoing centralization of all key functions

including HR, treasury, finance, marketing, and RCM

• The restructuring of CARE board is in

process and the Annual General Board meeting has been scheduled for 15th September

Improved Corporate Structure

14

15

NMC Healthcare KSA: Operational Highlights

Ha’il Najran Jeddah Riyadh Al Khobar

Al Qadhi Specialty Chronic Care

• Above 80% YoY increase in revenue
• Introduced Home healthcare service, securing

SAR 250k/month

• Recognized as one of the safest hospitals in

KSA through the national Essential Safety Requirements (ESR) program

• Phenomenal 46% yoy revenue growth
• The only CBAHI accredited facility in Najran
• Ophthalmology service launched and positioned as COE for region
• Preferred private hospital of choice for MOH patient referrals

NMC Hospital, Hail

• Signed 3 contracts with referring polyclinics

and thereby a 6% increase in OP volume

• Dialysis and Dermatology services added

which improved the acceptance criteria for MOH referred patients

NMC Specialty Hospital

• Rebranded to NMC Specialty Hospital, with

improved occupancy rates from less than 40% to 76%

• Strengthened the relation with MOH with over

1,200 referred across different specialties

• Preparation for JCI started in H1, achieving

JCI will have a positive impact on structuring the price list by 15%

As Salama Hospital

• Obtained CBAHI accreditation and thereby

10% increase in reimbursement prices for MOH services

• Started new service lines; Home health care

and Long-Term care

15

16

H2 2019 – Way Forward

• Continued focus on achieving the 2019 strategy to drive growth with increased capacity,

addition of subspecialty services and expansion across multiple geographies

• Clinical Governance model will remain strong with emphasis on improved outcomes,

patient safety, and standardization of clinical best practice across the organization

• Saudi Arabia business will continue to rapidly grow in H2 2019 with additional bed

capacity and the addition of more sub-specialty services

• Strong growth expected in H2 2019 driven by sustained ramp-up, integration and

expansion of acquisitions and continued operational excellence

• NMC will focus on specific areas of improvement for CARE with immediate emphasis on

clinical services enhancement, infrastructure improvement and business enhancement

• NMC is focused on diversifying revenue away from GOSI reliance to improve Quality of

Earnings with the introduction of NMC’s model for clinical and business success; IVF, Cosmetics, Long-term care & Rehab, Pediatrics, Obstetrics and Oncology

16

CFO Presentation

22 August 2019

18

Maintaining an unbroken track record of delivering on promised growth

Post-IFRS 16 Pre-IFRS 16 (US$m) H1 2019* FY 2019 guidance H1 2019 FY 2019 guidance H1 2018 % growth (YoY) Revenues 1,236.0 2,500 - 2,540 1,236.0 2,500 - 2,540 932.0 32.6% EBITDA 323.5 665 - 675 276.3 575 - 585 225.5 22.5% EBITDA margin 26.2% 26.6% 22.4% 23.0% 24.2% (180bps) Net income to equity holders 138.1 297 - 305 151.0 320 - 330 116.5 29.6% EPS - Basic 0.66

• 0.72
• 0.56

29.1% Net debt - to - EBITDA 3.4x 3.4 - 3.5x 2.7x

• 3.4x

* H1 2019 is the first period to reflect the adoption of IFRS 16. As a result, an unadjusted comparison with H1 2018 is not meaningful

• The healthcare market remains highly predictable
• NMC’s track record of guidance and delivery now extends to six years, with management confident that 2019 will

prove to be no different

• In line with guidance, EBITDA margin compressed in H1 2019 due to 1) contribution from Aspen Healthcare, which

is associated with lower margins and 2) increased contribution from assets in early stages of ramp up (particularly in KSA)

18

19

H2 consistently records higher share of annual of top and bottom lines

19

47% 48% 45% 53% 52% 55% 0% 10% 20% 30% 40% 50% 60% FY 2016 FY 2017 FY 2018 H1 H2

Share of FY revenues

47% 48% 46% 53% 52% 54% 42% 44% 46% 48% 50% 52% 54% 56% FY 2016 FY 2017 FY 2018 H1 H2

Share of FY EBITDA

47% 44% 47% 53% 56% 53% 0% 10% 20% 30% 40% 50% 60% FY 2016 FY 2017 FY 2018 H1 H2

Share of Net Income to equity holders

20

H1 2019 segmental data

H1 2019 segmental data (US$m) Healthcare Distribution Adj/Elimination Group Revenue 957.7 304.4 (26.1) 1,236.0 % Revenue growth 35.7% 19.4% 32.6% % Contribution to Group Revenue 75.9% 24.1% EBITDA 313.4 43.6 (33.5) 323.5 % EBITDA Margin 32.7% 14.3% 26.2% % contribution to Group EBITDA 87.8% 12.2% Without IFRS 16 Impact EBITDA 271.6 41.4 (36.7) 276.3 % EBITDA Growth 19.8% 36.5% 22.5% % contribution to Group EBITDA 86.8% 13.2% % EBITDA Margin 28.4% 13.6% 22.4% EBITDA Margin YoY change (380) bps 170 bps (180) bps

20

• In line with guidance, Healthcare EBITDA margin compressed in H1 2019 due to 1) contribution from Aspen

Healthcare, which is associated with lower margins and 2) increased contribution from assets in early stages of ramp up (particularly in KSA)

• The sharp growth in revenues, as well as margin improvement, for the Distribution division was supported by new

contracts, including one-off contracts across government and private sectors. Additionally, referrals and cross-sales

• n the back of O&M contracts have translated into sizable revenue growth for the Distribution division

21

One of highest FCF conversion for H1 historically

Free Cash Flow details Significant portion of operational beds in ramp-up phase (H1 2019 operational beds) Cash Conversion % based on Free Cash flow Adjusted for growth CAPEX

18.8% 46.7% 36.9% 2.1% 51.1% 34.3% 50.5% 56.3% 50.9%

2015 2016 2017 2018 2019 H1 FY

31% 69% Beds in ramp-up phase

US$’000 30-Jun-16 30-Jun-17 30-Jun-18 30-Jun-19 Profit for the year before tax 71,173 99,306 118,717 140,594 Add/(Less): Net Working Capital Movement (42,351) (77,042) (151,441) (63,353) Add: Dep & Amortisation 26,342 35,303 43,409 59,377 Less: Total Capex (37,032) (23,377) (56,414) (96,520) Growth Capex (27,297) (10,049) (17,242) (63,356) Maintenance Capex (9,735) (13,328) (39,172) (33,164) Add/(Less): IFRS 16 Impact

• 11,133

Add: Non cash charge to PL 8,721 18,754 33,201 26,540 Free Cash Flow (A) 26,853 52,944 (12,527) 77,771 Free Cash Flow (Adjusted for Growth Capex) (B) 54,150 62,993 4,715 141,127 Cash Flow Conversion based

• n (B)

46.7% 36.9% 2.1% 51.1%

21

22

Cash Bridge (US$m)

491 574 324 92 (63) (51) (97) (49) (78) 5 2018 cash & bank balance Add: EBITDA Add: Increase in gross debt (Less): Working capital (Less): Net finance cost (Less): Capex (net of disposals) (Less): Lease liability paid (Less): Acquisitions & investment (Less): Others H1 2019 cash & bank balance

22

23

Outlook and key takeaways from trends in H1 2019

FY 2019 guidance remains intact

Guidance US$m Post-IFRS 16 Pre-IFRS 16 Revenues 2,500 - 2,540 2,500 - 2,540 EBITDA 665 - 675 575 - 585 Net income to equity holders 297 - 305 320 - 330 IFRS 16 lease liabilities 680 – 690

• Net debt-to-EBITDA

Below 3.4x

• Strength of legacy assets

13% 15%

12.0% 12.5% 13.0% 13.5% 14.0% 14.5% 15.0% 15.5% Revenues EBITDA YoY growth for assets that existed as at end 2017 Demonstration of the ability of business to deleverage 3.1 2.7 2.5 2.6 2.7 2.8 2.9 3.0 3.1 3.2

2018 H1 2019 Pre-IFRS 16 net debt to EBITDA (x)

Growth vs. value extraction now? 51% 55% 2% 52%

CA S H FLOW CONV E S I ON NE T I NCOME -T O-E B I TDA

H1 2019 H1 2018

23

Appendix: H1 2019 Results in Charts and Tables

22 August 2019

25

1

Group P&L items

2

Segmental information

3

Cash flow items

4

Balance sheet items

Table of Contents

5

Other disclosure

25

26

Maintaining an unbroken track record of delivering on promised growth

Post-IFRS 16 Pre-IFRS 16 (US$m) H1 2019* FY 2019 guidance H1 2019 FY 2019 guidance H1 2018 % growth (YoY) Revenues 1,236.0 2,500 - 2,540 1,236.0 2,500 - 2,540 932.0 32.6% EBITDA 323.5 665 - 675 276.3 575 - 585 225.5 22.5% EBITDA margin 26.2% 26.6% 22.4% 23.0% 24.2% (180bps) Net income to equity holders 138.1 297 - 305 151.0 320 - 330 116.5 29.6% EPS - Basic 0.66

• 0.72
• 0.56

29.1% Net debt - to - EBITDA 3.4x 3.4 - 3.5x 2.7x

• 3.4x

* H1 2019 is the first period to reflect the adoption of IFRS 16. As a result, an unadjusted comparison with H1 2018 is not meaningful

• The healthcare market remains highly predictable
• NMC’s track record of guidance and delivery now extends to six years, with management confident that 2019 will

prove to be no different

• In line with guidance, EBITDA margin compressed in H1 2019 due to 1) contribution from Aspen Healthcare, which

is associated with lower margins and 2) increased contribution from assets in early stages of ramp up (particularly in KSA)

26

27

Strong top and bottom-line growth

932.0 1,236.0 200 400 600 800 1,000 1,200 1,400 H1 2018 H1 2019 225.5 276.3 50 100 150 200 250 300 H1 2018 H1 2019* 116.5 151.0 20 40 60 80 100 120 140 160 H1 2018 H1 2019*

Revenue US$m EBITDA US$m Net income to equity holders US$m

* Excluding impact of IFRS 16

• On a pre-IFRS 16 basis, EBITDA-to-net income to equity holder’s conversion ratio stood at 55% vs. 52% for H1 2018
• As utilization of existing assets continues to improve, combined with extraction of synergies from acquired assets,

we expect the trend of improvement in the conversion ratio is expected to sustain in the near to medium term

27

28

Analysing revenue and EBITDA growth

910.4 1,029.6 H1 2018 H1 2019

Revenues from assets that existed at end of 2017 (US$m)

Revenues

248.8 286.8 H1 2018 H1 2019

EBITDA (excluding IFRS 16 impact) from assets that existed at end of 2017 (US$m)

EBITDA

• In order to demonstrate the strong growth profile of NMC’s legacy portfolio, the charts above illustrate revenue and

EBITDA growth for assets that existed as at the end of 2017

• Note that all assets acquired during 2018 are excluded for this exercise

28

29

Key P&L items: Details of financial expenses & instruments

(US$m) HY 2019 FY 2019 guidance Bank interest 36.9 Bank charges 3.1 Total bank interest & charges 40.0 77.0 Coupon payment on convertible bond 4.2 Interest on sukuk 12.5 Sukuk & Bond interest 16.7 32.0 Notional interest on convertible bond 6.6 Financial instruments fair value adjustments 0.7 Amortization and re-measurement of option redemption liability 3.6 Non-cash financial charges 10.3 15.0

• Financial charges remained in line with management’s expectations and full year guidance provided for FY 2019

29

30

Key P&L items: Other income

Other Income (US$m) H1 2019 H12018 Reimbursement of advertisement & promotional expenses for distribution business 30.6 27.4 Reimbursement of expenses for O&M contracts 13.5 1.3 Other ancillary income 11.5 12.4 Total 55.6 41.1

• Only US$11.5m (H1 2018: US$12.4m) of other income impacted EBITDA in H1 2019
• Other income includes US$44.1m (H1 2018: US$ 28.7m) reimbursement of costs incurred by NMC on behalf of other

parties, with corresponding expenses reported in direct costs and general and administrative expenses

30

31

1

Group P&L items

2

Segmental information

3

Cash flow items

4

Balance sheet items

Table of Contents

5

Other disclosure

31

32

Group revenue split by geography

79.9% 7.5% 4.4% 8.2% UAE UK KSA Other

• The UAE posted 15.6% YoY revenue growth, demonstrating the continued strength of NMC’s home market
• KSA posted the highest growth on a country-by-country basis. Revenues jumped 71.8% YoY as a number of assets,

both existing and newly acquired in 2018, recorded a rapid increase in utilization

32

33

H1 2019 segmental data

H1 2019 segmental data (US$m) Healthcare Distribution Adj/Elimination Group Revenue 957.7 304.4 (26.1) 1,236.0 % Revenue growth 35.7% 19.4% 32.6% % Contribution to Group Revenue 75.9% 24.1% EBITDA 313.4 43.6 (33.5) 323.5 % EBITDA Margin 32.7% 14.3% 26.2% % contribution to Group EBITDA 87.8% 12.2% Without IFRS 16 Impact EBITDA 271.6 41.4 (36.7) 276.3 % EBITDA Growth 19.8% 36.5% 22.5% % contribution to Group EBITDA 86.8% 13.2% % EBITDA Margin 28.4% 13.6% 22.4% EBITDA Margin YoY change (380) bps 170 bps (180) bps

33

• In line with guidance, Healthcare EBITDA margin compressed in H1 2019 due to 1) contribution from Aspen

Healthcare, which is associated with lower margins and 2) increased contribution from assets in early stages of ramp up (particularly in KSA)

• The sharp growth in revenues, as well as margin improvement, for the Distribution division was supported by new

contracts, including one-off contracts across government and private sectors. Additionally, referrals and cross-sales

• n the back of O&M contracts have translated into sizable revenue growth for the Distribution division

34

Growth charts – Healthcare & Distribution Revenue and EBITDA (pre-IFRS 16)

706.0 957.7 200 400 600 800 1,000 1,200 H1 2018 H1 2019

Healthcare Revenue US$m

255.0 304.4 230 240 250 260 270 280 290 300 310 H1 2018 H1 2019

Distribution Revenue US$m

30.3 41.4 5 10 15 20 25 30 35 40 45 H1 2018 H1 2019

Distribution EBITDA US$m

226.8 271.6 200 210 220 230 240 250 260 270 280 H1 2018 H1 2019

Healthcare EBITDA US$m 34

35

Healthcare – Strong platform continues to deliver growth

Multispecialty Maternity & Fertility Long-term & Home care Operation & Management Total Healthcare

• No. of Countries

4 11 2 10 19 Revenue (US$ ‘000) 695,975 164,495 82,567 14,650 957,687 % Growth (YoY) 33.6% 43.9% 30.8% 89.1% 35.7% % of Healthcare revenue 72.7% 17.2% 8.6% 1.5%

• Revenue / patient (US$)

168 1,419 20,637 224 % Growth (YoY) 15.7% 32.4% 3.4% 16.8%

Capacity

Licensed beds 1,599 106 502 2,207 % Growth (YoY) 16.5% 0.0% 3.5% 12.4% Operational beds 1,395 100 427 1,922 % Growth (YoY) 26.4% 0.0% 31.0% 25.6% % Spare capacity 13% 6% 15% 13% Patients 3,905,390 115,889 4,001 4,025,280 % Growth (YoY) 17.0% 8.7% 26.5% 16.7% % Bed occupancy 61.2% 79.7% 86.1% 67.7%

35

36

1

Group P&L items

2

Segmental information

3

Cash flow items

4

Balance sheet items

Table of Contents

5

Other disclosure

36

37

Substantial Working capital improvement in H1 2019…

Working capital improvement

H1 2019 FY 2018

Receivables Inventory

Receivables & Inventories Split Group working capital cycle improved to 90 days in H1 2019, despite of reduction in payables days The improvement in Group working capital cycle was driven by reduction in receivables days and inventory days in particular In terms of business divisions, the Healthcare segment continues to benefit from a shorter working capital cycle

37 Note: Includes related parties’ trade and non-trade receivables and payables

107 99 89 68 74 56 57 67 56 118 106 90 H1 2018 FY 2018 H1 2019 Receivables Days Inventory Days Payables Days Working Capital Cycle (days)

76.1% 23.9% 30.5% 69.5% 77.1% 22.9% 36.2% 63.8%

Improved Revenue Cycle (RCM) management Increased contribution from cash-based businesses, including IVF, cosmetics and Aspen Healthcare Sharp focus on improving receivables collection in KSA Reduction in receivable days driven by focused strategy

38

…supporting one of highest FCF conversion for H1 historically

Free Cash Flow details Significant portion of operational beds in ramp-up phase (H1 2019 operational beds) Cash Conversion % based on Free Cash flow Adjusted for growth CAPEX

18.8% 46.7% 36.9% 2.1% 51.1% 34.3% 50.5% 56.3% 50.9%

2015 2016 2017 2018 2019 H1 FY

31% 69% Beds in ramp-up phase

US$’000 30-Jun-16 30-Jun-17 30-Jun-18 30-Jun-19 Profit for the year before tax 71,173 99,306 118,717 140,594 Add/(Less): Net Working Capital Movement (42,351) (77,042) (151,441) (63,353) Add: Dep & Amortisation 26,342 35,303 43,409 59,377 Less: Total Capex (37,032) (23,377) (56,414) (96,520) Growth Capex (27,297) (10,049) (17,242) (63,356) Maintenance Capex (9,735) (13,328) (39,172) (33,164) Add/(Less): IFRS 16 Impact

• 11,133

Add: Non cash charge to PL 8,721 18,754 33,201 26,540 Free Cash Flow (A) 26,853 52,944 (12,527) 77,771 Free Cash Flow (Adjusted for Growth Capex) (B) 54,150 62,993 4,715 141,127 Cash Flow Conversion based

• n (B)

46.7% 36.9% 2.1% 51.1%

38

39

Growth capex: UAE & Oman the main recipients

Breakdown of H1 2019 CWIP on balance sheet (US$138.1m)

67.0% 28.8% 4.2% UAE Oman Other

H1 2019 growth capex breakdown (US$63.4m)

87.2% 6.6% 6.2% UAE Oman Other

2018 growth capex breakdown (US$101.2m)

50.4% 45.9% 3.7% UAE Oman Other 39

40

Growth capex: Key projects under way

Region / Asset Capacity addition Country Expected Completion Date

NMC Royal DIP expansion 70 beds UAE H2 2020 NMC Specialty Dubai expansion 140 beds UAE H1 2020 Mirdiff Hills Hospital 100 beds UAE H2 2021 New Sharjah Hospital 70 beds UAE H2 2020 Al Hail Hospital 70 beds Oman H1 2020 Al Khoud Hospital Up to 100 beds Oman H2 2020 IVF, cosmetics and multispecialty clinics 12-15 clinics UAE, Oman & Europe H2 2019 -H1 2020

Up to 560 beds being added across multiple assets, increasing existing capacity by up to 25% The above mentioned expansions have a total capex budget of US$300-325m, a portion of which has already been incurred

40

New clinics being developed will help expand the reach of various verticals into their respective targeted geographies

41

1

Group P&L items

2

Segmental information

3

Cash flow items

4

Balance sheet items

Table of Contents

5

Other disclosure

41

42

Key Balance Sheet items: Other receivables

(US$m) H1 2019 O&M related receivables* 9.0 Accounting reclassification on closing of acquisition 9.5 Other receivables arising from normal course of business (guarantees, bond payments etc) 6.4 * Receivables from non-related party O&M contracts (fees as well as reimbursement of expenses) entered into late 2018

• Other receivables stood at US$61.2m, compared to US$36.3m in FY 18. The increase can largely be explained by the

inclusion of the above items in H1 ‘19

42

43

1

Group P&L items

2

Segmental information

3

Cash flow items

4

Balance sheet items

Table of Contents

5

Other disclosure

43

44

Acquisitions & Investments

Detail US$m

Consideration Paid for 10.32% CARE shares 65.0 Transaction cost relating to overall GOSI transaction 2.4 Total amount paid for strategic partnership with GOSI 67.4 Purchase of minorities in KSA-based subsidiaries 7.4 Deferred/Contingent consideration paid for previous acquisitions 2.8 Total 77.6 NMC KSA* Ownership % As on June 2019 As on June 2018 As Salama Hospital, Al Khobar 99% 99% NMC Specialty Hospital, Al Salam, Riyadh 95% 80% Chronic Care Specialty Medical Centre, Jeddah 100% 100% New Medical Center Hospital, Hail 100% 100% Al Qadi Specialty Hospital, Najran 80% 60% * Following its partnership with GOSI, NMC owns 53% of NMC KSA

• Recognizing the inherent value of its assets in KSA, NMC has been increasing its stake in previously acquired

hospitals through the purchase of outstanding minorities

• Following an active year in terms of M&A in 2018, management has been focusing on integration and extraction of

synergies during the current year

• Excluding the acquisition of CARE shares, there has been no significant investment activity during H1 2019

44

45

IFRS 16 reconciliation

Income statement impact (US$m) Pre-IFRS 16 IFRS 16 impact As reported (post-IFRS 16) Revenues 1,236.0

• 1,236.0

EBITDA 276.3 47.2* 323.5 Financial expenses (67.6)

• (67.6)

Finance cost relating to Lease liabilities

• (24.3)

(24.3) Depreciation & Amortization (59.4)

• (59.4)

Depreciation (right of use assets)

• (36.0)

(36.0) Profit for the period 153.1 (13.1) 140.0 Net income to equity holders 151.0 (12.9) 138.1

* rental expense removed from operating costs

• The group recorded an opening lease liability of US$729.3m (see note 2.2 to the Financial Statements for details)

under IFRS 16. As on 30th June 2019, the total closing lease liability is US$706.9m

• The Group’s estimates of closing lease liability by December 2019 is in line with the guidance of US$690m

45

46

Related party transactions

Key P&L items H1 2019 H1 2018 Purchases of healthcare inventory 39,920 58,940 Management fees 5,350 2,450 Key Balance Sheet items H1 2019 2018 Amounts due to related parties 24,518 47,737 Amounts due from related parties 13,102 7,346

• Purchases include pharmaceutical products manufactured by Neopharma* for various companies and purchased

by NMC Trading division for distributing to various retailers, hospitals, clinics etc in UAE. These purchase are made at regulated prices fixed by the Ministry of Health in the UAE

• Less than 15% of purchases from Neopharma are utilized by NMC’s own healthcare business
• In terms of management fees, NMC manages all healthcare assets of the Emirates Healthcare Group under an O&M

contract signed in 2017

• Amounts due to related parties are mostly due against purchases from Neopharma
• Amounts due from related parties include trade receivables against O&M fees and pharmaceutical sales, as well as

reimbursable expenses under O&M contracts

46

* Neopharma is owned by Dr. B.R. Shetty