Investor Presentation March 2019 Vision & Milestones To be a - - PowerPoint PPT Presentation

Investor Presentation

March 2019

Vision & Milestones

“To be a trusted hospital and medical service network delivering high quality service through the latest innovations that provides the general public an easy access to its service”

1977 Thonburi Hospital started

• peration

1991 Invested in Ubonrak Hospital 1993 Opened Thonburi 2 Hospital 1994 Registered as a public company limited 1996 Invested in Sirivej Hospital 1997 Invested in Dental Siam 2003 Invested in Rajyindee Hospital 2009 Invested in Modular Software Expertise 2011 PPP agreement to provide hospital management for Phuket Provincial Hospital 2012 PPP agreement to provide hospital management for Pattaya City Hospital 2014 Invested in Thonburi Hospital Heart centers and Premier Home Health Care 2016 Restructure and prepare for IPO Signed JV for Welly Hospital in China

Registered Capital (THB mn) 20 60 300 600 849

Signed JV for Ar Yu International Hospital in Myanmar 2017 1976 1980 1991 2013 2017

2

2016

764

2015 PPP agreement for Koh Lan CMU 2018 Grand opening

• f Thonburi

Bamrungmuang Hospital and Ar Yu Hospital Acquired shares for Thonburi Thungsong Hospital 2019

THG Businesses

Hospital Business Healthcare Solution Provider Other business

2018 Revenue: THB 6,579 mm (92.7%) 2018 Revenue: THB 492 mm (6.9%) 2018 Revenue: THB 23 mm (0.3%) Domestic / International Hospital

• 7 Hospitals in Thailand
• 2 Hospitals overseas

Management Service

• 2 Hospitals and 1 Medical Center in

Thailand

• MOU for consultancy in Asia

Excellent Center Management Service

• 3 Heart Centers under management

Step-Down Care

• A rehabilitation center for patients

who do not need close watch from doctors

• Low-tone care for OPD patients

Home Healthcare

• Medication services to patient’s

home ex. check up, treatment, rehabilitation Senior living

• Jin Wellbeing County, mixed-use

development to provide services needed by senior

• Thonburi Health Village, to serve

various segments Dental Supplies Retailer & Drug Stores

• 10 Drug stores
• Exclusive distributor for dental

supplies: 30 brands Software Development

• Develop software to support internal

departments and connect with other networks such as Social Security Office, National Health Security Office, The Comptroller’s General Department Project Development for Healthcare & Medical Services

• Land Pipeline: 1,931 Rai
• Book Value: THB 1,811 mm

3

• Higher margin from

asset-light model

Welly Hospital Ar Yu Hospital 2018 2019

Jin Wellbeing County

Hospital & excellence center management

Growth prospect

Jin Wellbeing County + Thonburi Health Village

Hospital & excellence center management Thonburi Bamrungmuang Domestic hospitals Domestic hospitals

• Strong core business

with stable growth

• More Jin’s unit transfer expected after starting in

4Q18

• Expected growth from new opportunities

both domestically and internationally

• Started operation on 24 January 2019
• Ready to support international patients

catching medical tourism trend

• Organic growth from volume, price and medical

intensity, with capacity expansion

• Potential growth from Thonburi Thungsong

Hospital, expected to operate in 2H19

• Potential growth from Thonburi Burana

Hospital, low-tone care in Jin Wellbeing County facilities

• Ramping up after grand opening
• Less shared loss due to more

patients volume

• Soft launch in 3Q18 and grand
• pening in March 19 with loss shared

to THG in first year

• Expected EBITDA breakeven in 2020

Hospital (Thailand) 7 Hospital (overseas) 2 Hospital Management 2 Excellent Center Management 3 Network Hospital 9

Hospital Business - overall

• Thonburi Hospital
• Thonburi 2 Hospital
• Thonburi Bamrungmuang

Sirivej Hospital Chantaburi Ubonrak Thonburi Hospital Rajyindee Hospital Welly Hospital (China) Ar Yu International Hospital (Myanmar) Heart Center

• Bangplee Hospital
• Phatra Hospital
• Thonburi 2 Hospital
• Phattalung Hospital

Pattaya City Hospital Phuket Provincial Hospital

5 Key Excellence Centers

Heart Center Women’s Center Gastrointestinal and Liver Center Orthopedic Center Neuroscience Center Hospital Accreditation

• f Thailand (HA)

ISO

5

Thonburi Thungsong Hospital

Hospital Business – Hospitals in Thailand

• THG has a strong foothold in Bangkok with flagship brand, Thonburi Hospital, trusted by patients for 40

years.

• Upcountry hospitals are in strategic locations with high potential for patient referrals to hospitals in

Bangkok.

• This core business has provided stable growth and become a foundation to expand to related business.

Location: Bangkok Registered beds: 435 Location: Bangkok Registered beds: 95 Location: Songkla Registered beds: 196 Location: Chantaburi Registered beds: 90 Location: Ubonratchathani Registered beds: 100

6

Hospital Business – Positioning benchmark

Medical sophistication Price per disease

Secondary Tertiary Super tertiary

High end High end, international focused Prestigious public medical schools High end, international focused High end, international focused Mid to high end hospitals Mid to lower end hospitals Lower end, SSO Thonburi Hospital Thonburi 2 Hospital

THG has capability and capacity for sophisticated medical services but at more affordable price.

7

Hospital Business – Thonburi and Thonburi 2 Hospital

Strategy

• OPD
• Increase and develop excellence centers

to meet demand of target group

• Thonburi 2 aims to increase capability to

provide tertiary care services.

• Space management for patients’

convenience and satisfaction

• Expand customer base with continuous

marketing activities with insurance, corporate and foreign customers.

• IPD
• OPD building expansion can draw more

patients and potentially turn to IPD admission.

• Step-down care can help free up beds to

support more complexed cases.

• With our direction to provide more value

at affordable price, potential revenue increase should be mainly from more sophisticated treatments.

Thonburi Expansion Plan Thonburi 2 Expansion Plan

Details Area (sq.m.) Capacity Completion Year Total Investment 10 fl car park building 8,820 150 cars 2020 120MB 8 fl OPD building 14,900 50 OPD Rooms 2020 740MB Details Area (sq.m.) Capacity Completion Year Total Investment 3 fl IPD & OPD building 12,000 15 OPD Rooms/ 52 Beds 2020 435MB

8

Hospital Business - Thonburi Bamrungmuang Hospital

Thonburi Hospital Tier 1 hospital serving medical tourism Affordability Expertise in Dental (by Dental Siam) Orthopedic Heart Neuro ICU Operation Room Orthopedic - Endoscopic surgery Gastrointestinal - checkup IVF Wellness Premium Checkup Plastic surgery Medical tourism Location: Easy-to-access Rehab Reasonable price IPD Step-down care

Supporting patients from Thonburi and Bamrung Muang

Location: West of BKK Location: CBD Geriatrics Luxury Competitiveness when compared to existing players Synergy with Thonburi Hospital 9 Today’s healthcare

• Proactive
• Preventive
• Personalized
• Predictive

Thonburi Bamrungmuang Hospital

• Grand opening in January 2019.
• Operating dental, premium checkup and Holistic Diabetes centers with IVF in a pipeline

10

Thonburi Bamrungmuang Hospital

11 Ward Checkup

Thonburi Thungsong Hospital Project

12 Details Location Tungson-Wiangsa Highway, Nakorn Sri Tammarat Positioning Secondary care Target Elderly, middle class, insurance client, ER patients Registered beds 200 beds Progress > 50% Expected operations In 2019 As of 7 November 2018, THG holds 51.12% directly and 5.31% indirectly via Rajyindee Hospital. Total shares held are 56.43% of THB600mn registered capital of Thanarad Thungsong. Total investment is THB307mn.

Hospital Business – International hospitals

Strategy for investment in international market

• Selective increase in market with promising growth potential
• Leverage on strong partners
• Start from initial partnership, small investment or management contract until proven success

Welly hospital Location: Wei Hai, Shandong region Project: 130-available-bed private hospital in an area mostly populated by state hospital Grand opening in 4Q17 Partner: THG 58%, WEGO 42% Leading manufacturer of medical devices in China Ar Yu International Hospital Location: Yangon, Myanmar Project: 200-bed private hospital which is the first with international standard Partners: GMP 50%, THG to be 40%, AMS 10%

• Ga Mone Pwint: Leader in brand

developer, property & real estate, hotel, retail, and trading business in Myanmar

• Aryu Ananta Medical Services: A group
• f leading local doctors

Asia Continent

13

FY17 FY18 FY17 FY18 FY17 FY18 OPD Revenue IPD Revenue

Welly Hospital

• The hospital is ramping up patient volume and revenue, aiming for EBITDA break even in 2019.
• OPD patients are approx. 200/day and IPD are approx. 70/day.
• Welly Hospital continues to develop service standard with expertise, knowledge sharing and service

training from THG. Revenue OPD sequences IPD bed days

14

• Ar Yu started the soft launch in early September, serving OPD full service.
• Started IPD service (initially 23 beds) on 7 February 19
• The grand opening is on 17 March 2019.
• Key success factors:
• Modern facilities and equipment
• well-known Myanmar medical staff
• Thai hospitality service standard
• patient safety focused and gear for JCI

Ar Yu International Hospital

15 OR Lift lobby

Ar Yu International Hospital

16

Domestic

‘Asset-light model’

• No CAPEX – High ROE/ROA
• Stable revenue stream
• THG responsible for cost management
• Current net profit margin >10%
• THG diversifies into consulting & management services by establishing management team and providing efficient

medical services for public hospitals.

• THG is the first private hospital to enter into Public – Private Co-operation agreement with Ministry of Interior and

Ministry of Public Health, aiming to bridge the gap between public and private hospitals’ healthcare standards. Locations

• Pattaya City Hospital
• Central Medical Unit (CMU) (Kohlan)
• Phuket Provincial Hospital

Hospital Business – Hospital Management

International

Strategy

• Strategic Increase – Using asset-light model that enhance ROE and ROA
• Focus on Asian region – markets in CLMV
• Tap into markets where level of medical sophistication offered by local hospitals are insufficient for local demand
• Cater services to suit requirements: e.g. consultancy, staff training, comprehensive study, feasibility study

Revenue from hospital management (MB)

Overseas contracts generated growth in 2017 and they expired causing decrease in 2018.

17

378 440 503 598 494 2014 2015 2016 2017 2018

0.4 58 130 216 276 2014 2015 2016 2017 2018

Heart Center

Hospital Business – Excellence Center Mgt

Bangplee Hospital* Phatra Hospital Thonburi 2 Patalung Hospital Type of Hospital

• Public Hospital
• Private Hospital
• Private Hospital
• Public Hospital

Medical Equipment Investment

• THG’s Investment
• Co Investment
• THG’s Investment
• THG’s Investment

Revenue from heart center (MB) 2018 growth was mainly from new sites.

THG serves both private and public hospitals by providing highly skilled cardiologists, medical staffs and advanced machines which will allow heart patients to get access to high quality care at lower price.

18

* Contract at Bangplee expired at the end of 2018

Healthcare Solutions Provider Business

Home healthcare Dental supplies & drug stores Senior care and senior living

• Basic treatment: medication dispensing and delivery, health evaluation, vaccination,

counseling

• Skilled nurse service: wound care, post-surgery care, pain management, fall prevention
• Physical therapy service: for orthopedic patients, for neurological disorders, cardio-

pulmonary rehab

• Service for new mom: ultrasound for blocked milk ducts
• Standard hospital-accredited housekeeping (Premiere Healthy Clean): allergy and dust

mites specialists Healthcare mixed use development comprises of

• Active Living, with medical staff, 24-hour emergency aid and Centralized

Health Monitor System

• Thonburi Burana Hospital low-tone care for elderly who need special care
• Wellness Center for physical rehabilitation and health activities
• Dental Siam: one-stop service dental supplies shop
• Apex: drug stores with 10 branches in shopping malls

19

Jin Wellbeing County

• Key differentiation is comprehensive medical service with expertise from Thonburi Hospital.
• With growing senior population in Thailand, the project can become a big community with potential of

recurring income from residents.

• Comprising active living, rehab hospital and wellness center

20

• Best Senior Living Development
• Highly Commended for Best

Universal Design Development from Property Guru Thailand Property Award 2018

Jin Wellbeing County – Active living

21

• 494 freehold units in 5 low-rise

buildings for first two clusters

• One-bedroom and two-bedroom

layouts at 85,000–120,000 baht/m2

• 43 and 63 Sq.M. at THB4-6mn
• Tracking system , 24/7 emergency

service and safety facilities

Jin Wellbeing County – Thonburi Burana Hospital

22 Patient room Cafe Reception area Thonburi Burana Hospital

• Rehab hospital for elderly who need special care, such as

chronic patients, Alzheimer etc.

• 54 beds to operate in 1st phase
• IPD rooms, OPD clinics, medical staff, services from

physical therapist, dieticians and psychologists

• Expect operation in February 2019

Jin Wellbeing County – Jin Wellness Institute

23 Jin Wellness Institute Two 5-story buildings: 5,685 Sq.M. and 8,058 Sq.M. comprising

• 1. Integrative Wellness Clinic and Medical Spa – for customized health plan
• 2. Jin MediFit – Gym with professional instruction
• 3. Life Enrichment – activities for mind and emotional balance

Activity room Spa Cooking studio Restaurant

• 4. Learning activities – Art & music therapy, cooking etc.
• 5. Nutrition and meal plan – customized healthy meals

Jin Wellbeing County - progress

Building Structure Architecture Engineering Exterior Cluster 1 98% 65% 65% 60% Cluster 2 100% 95% 95% 95% Jin Wellness 90% 45% 40% 40% Thonburi Burana 90% 35% 35% 30% Cluster 1 Cluster 2 Thonburi Burana Hospital Jin Wellness Institute

Jin Wellbeing County – Sales and marketing

25

Sales promotion

• Gift voucher for furniture
• Fees waive
• Discount
• Free insurance

2019 target

200 unit transfer

155 units sold 39 units transferred since 4Q18

Thonburi Senior Home Jin Wellbeing County Thonburi Health Village Medical services Advanced Standard Service technology Advanced Standard Target group Medium - high Medium Design for elderly/patients Well supported Well supported Location North of Bangkok West of Bangkok Price per square meter 85,000 -120,000 baht 60,000 baht Price per unit

• Approx. 4-6 mn baht

(43 and 63 Sq.M.) 1.9 mn baht (32 Sq.M.)

Thonburi Senior Home – Comparison

26

Thonburi Health Village – Pracha Uthit

Swimming pool & Wellness Center

Investment value THB700mn Land area 8 rai (4 rai for 1st phase) Number of units 412 GFA 26,000 Sq.M SFA 13,824 Sq.M. Ready to transfer 2019

27

Room design - 32 Sq.M. unit

28

Universal design for all

wide corridor for wheelchair

Thonburi Health Village – Pracha Uthit

Thonburi Health Village – Pracha Uthit

Wellness Center

• Medical spa
• Salt chlorinator pool
• Gym and personal trainer
• Activity area
• Healthy cuisine restaurant
• Physiotherapy clinic

29

Other supporting business

Software Development Project development for healthcare/ medical service

Thonburi Realty Development Company Ltd. and Rajthanee Realty Company Ltd. develop projects related to medication for future project under group, for example senior living home and step-down care Company Location Area Book value Thonburi Realty Development Co., Ltd. Ratchaburi 1,550 rai THB 344.4 mn Rajthanee Realty Co., Ltd. Surat-thani (Koh Samui) 381 rai THB 1,467.3 mn Modular Software Expertise Co., Ltd. (MSE), one of Thailand's leading Hospital Information System (HIS) provider with experienced IT team and healthcare management professionals

• Hospital Information Management System (HIMS)
• Goods Management and Distribution System (GMDS)
• Retail Store Information Management System (RIMS)
• Car Park Management System (CPMS)

within THG Group Outside THG

Customer Group 30

Project timeline expectation

1Q19 2Q19 3Q19 4Q19 2020 Hospital expansion Construction Capacity increase Welly Hospital Ar Yu International Hospital EBITDA breakeven Thonburi Bamrungmuang Hospital Jin Wellbeing County Thonburi Health Village Ramp up EBITDA breakeven Grand Opening Operation EBITDA breakeven Unit transfer and revenue recognition Construction Unit transfer and revenue recognition EBITDA breakeven

Investment highlights

32

Investment highlights

Strong positioning in Bangkok with diversification to strategic locations upcountry Extensive Medical Resources and Network Diversify revenue mix Strong growth potential

• Well trusted due to its 40-year-old brand and

track record of quality medical services

• Best value in providing sophisticated medical

services at affordable price

• TH1 proximity to top medical school provides

benefit to retain specialized doctors and nurses

• 17 Network hospitals allow THG to capture benefits

from cost control and client referral

• Hospital business maintains a strong core, plus

future revenue from new businesses and from

• verseas.
• Expand into full-coverage medical businesses

with innovative healthcare services

• Early mover towards integrated healthcare

provider, including wellness and aged care

• Jin Wellbeing County and Thonburi Bumrung

Muang projects as brown field for growth drivers

33

Financial information

34

26 23 414 492

6,172 6,579

2017 2018 19 6 2 8 7 87 83 101 97 211

1,632 1,594 1,572 1,749 1,665

4Q17 1Q18 2Q18 3Q18 4Q18 Others Healthcare solution provider Medical service

4Q18 Financial Performance

Total revenue (mn THB)

+8.3% YoY

1,738 1,683

Medical service +2.0% YoY

• Revenue growth in 4Q18 continued, mainly from Thonburi 1 Hospital that saw increase in patient

volume due to new excellence centers.

• However, slower growth was because of revenue decrease in overseas advisory business.
• Proportion of revenue from healthcare solution provider grew more than double in 4Q18 due to Jin

Wellbeing sales.

35

1,675 6,612 7,094

+7.3% YoY

Medical service +6.6% YoY

1,854 1,883

4Q18 Financial Performance

Gross profit (mn THB)

• 4.5% YoY

EBITDA (mn THB) Net profit-parent (mn THB)

• 37.1% YoY
• 86.1% YoY

36

+4.3% YoY

• 4.8% YoY
• 37.2% YoY

508 478 430 517 485 29.3% 28.4% 25.7% 27.9% 25.8% 4Q17 1Q18 2Q18 3Q18 4Q18 Gross Profit GP Margin 1,830 1,909 27.7% 26.9% 2017 2018 Gross Profit GP Margin 313 348 249 300 197 18.1% 20.7% 14.9% 16.2% 10.5% 4Q17 1Q18 2Q18 3Q18 4Q18 EBITDA EBITDA Margin 1,147 1,094 17.3% 15.4% 2017 2018 EBITDA EBITDA Margin 158 158 72 96 22 9.1% 9.4% 4.3% 5.2% 1.2% 4Q17 1Q18 2Q18 3Q18 4Q18 Net Profit -Parent NP Margin 554 348 8.4% 4.9% 2017 2018 Net Profit -Parent NP Margin

4Q18 Operational statistics – TH1, TH2, RYD

Revenue mix – OPD vs IPD Revenue breakdown by payors - FY18 OPD utilization IPD utilization

37

45% 46% 46% 45% 44% 55% 54% 54% 55% 56% 4Q17 1Q18 2Q18 3Q18 4Q18 % OPD Revenue % IPD Revenue 71% 21% 8% 0% Self pay Insurance Corporate Others 61% 61% 60% 64% 58% 4Q17 1Q18 2Q18 3Q18 4Q18 65% 68% 61% 72% 68% 4Q17 1Q18 2Q18 3Q18 4Q18

2,414 2,459 2,452 2,501 2,523 4Q17 1Q18 2Q18 3Q18 4Q18 19,737 19,609 21,259 20,241 19,925 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 TH1 TH2 RYD 4Q17 1Q18 2Q18 3Q18 4Q18 TH1 TH2 RYD

260

Pay per sequence (baht) Pay per bed day (baht) OPD sequence (‘000 sequences) IPD occupancy (‘000 bed days)

38 260 38 39 258

4Q18 Operational statistics – TH1, TH2, RYD

+4.5% YoY +1.0% YoY

• 1.3% YoY

+8.4% YoY

• Approx. THB3,000 for TH1 and THB1,800-1,900 for RYD and TH2
• Approx. THB20,000 – 24,000 for TH2 and TH1,

and THB12,000 for RYD

278 35 43 257 41

2% 28% 70% 21% 20% 59% 2018 IBD Interest 2017 IBD Interest Non-current Current

FY18 Capital management

Gearing ratio Interest coverage ratio (x) Capital structure (mn Baht) Dividend

On 21 Feb 19, BoD approved dividend payment for 2018 performance at

THB 0.35/share = 85.5% payout ratio Subject to AGM approval

Dividend policy: not less than 40% of net profit

Equity LT loan 4Q18 4Q17 IBD/EBITDA (x) D/E (x)

IBD / EBITDA Covenant: <6x

39

ST Loan

DSCR ratio (x)

232 3,452 3,052 3,144 161 144 DSCR Covenant: >1.2x

4Q17 4Q18 2.6 1.0 0.6 1.1 2.9 3.6 3.2 5.7 2015 2016 2017 2018 5.7 5.0 5.3 4.4 2015 2016 2017 2018 2.4 1.6 4.4 2.0 2015 2016 2017 2018

Appendix

40

Group structure

Company Structure

Vanasin Family Other shareholders Thonburi Healthcare Group PLC Registered capital THB 849 mn Paid-up capital THB 764 mn

Rajyindee Hospital PLC Ubonrak Hospital

• Co. Ltd.

Uttaradit Thonburi Hospital Co. Ltd. Thonburi Hospital Heart Centers Co. Ltd. Weihai Thonburi Healthcare Investment Co. Ltd. Hospital Business Other related Business Dental Siam Co. Ltd. Modular Software Expertise Co. Ltd. Rajthanee Realty

• Co. Ltd.

Premiere Home Health Care Co.,Ltd. Thonburi Realty Development Co. Ltd. Other investments

Pre IPO

Shareholding structure

Vanasin family 31.5% Unnanuntana Family 7.7% Meksawan family 4.3% Other shareholders 56.6% Vanasin family 28.3% Unnanuntana Family 6.9% Meksawan family 3.9% Other shareholders 50.9% IPO portion 10.0% 28.3% 71.7% 55.9% 31.9% 34.0% 99.9% 99.9% 58.0% 99.4% 70.0% 100.0% 99.8% 99.9%

Post IPO

Remark: Uttaradit Thonburi Hospital Co., Ltd. is a dormant subsidiary of THG.

Aryu International Health Care Co. Ltd.* 40.0%

41

99.9% Thanarad Thungsong Co. Ltd. 56.4% Sirivej Hospital PLC Thonburi Bamrungmuang Hospital Co. Ltd.

THG’s hospitals

International Upcountry Area

Thonburi (TH1) Thonburi 2 (TH2) Rajyindee Ubonrak Sirivej Welly Ar Yu Year Operated 1977 1993 1995 1991 1992 2016 2018 Location Bangkok Bangkok Songkla Ubon Chantaburi Shandong Yangon Registered bed 435 95 196 100 90 150 200 Available bed 486 339 130 150 Doctors 534 203 140 92 88 72 20 Medical Staff 527 169 230 190 157 108 150 Certification HA HA / ISO HA HA

• N/A

Bangkok Area

42

As of 31 July 2018

For more information, please contact IR department. Email: ariya.si@thg.co.th Tel: +6695-3705728

“Lifetime health guardian for all”

Thonburi Healthcare Group Public Company Limited (“THG”), and affiliates, are pleased to provide this presentation which is intended for discussion purposes only. Although the information provided herein is believed to be reliable, THG makes no representation as to the accuracy or completeness of such information or otherwise provided by THG. Prior to acting on any information contained herein, the receiver should determine the risks and merits, including legal, tax, and accounting characterizations and consequences, without reliance on THG. This presentation and the contents of any document relating thereto are proprietary to THG and may not be reproduced or otherwise disseminated in whole or in part without THG’s prior written consent. This presentation is not intended to provide the basis for any investment decision, nor to substitute your own analysis and investigation, and should not be considered as a recommendation to any recipient of this presentation. Some statements made in this presentation are forward-looking statements, which are subject to various risks and

• uncertainties. These include statements with respect to THG’s corporate plans, strategies and beliefs and other statements that are not historical facts. These statements can be

identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “anticipate”, “intend” , “estimate”, “continue” “plan” or other similar words. The statements are based on the assumptions and beliefs of THG’s management in light of the information currently available to THG. These assumptions involve risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Nothing in this presentation is, or should be relied on as promise or representation of THG as to the future.