Investor Presentation August 2018
Senior management presenting Prasanth Manghat CEO Prashanth Shenoy CFO Hani Buttikhi CIO Asjad Yahya Investor Relations 2 2
Agenda 1 Overview of the business 2 Understanding the Saudi opportunity better 3 Transformational partnership with GOSI to form a new KSA healthcare champion M&A: A vital part of the story 4 5 Financial outlook 6 A closer look at key assets 7 Appendix 3 3
NMC at a glance Over 5.7 mn 1,919 137 owned and managed facilities patients in 2017 licensed beds (70 owned / 67 managed) 2017 Group EBITDA: FTSE 100 c. 2,000 doctors USD 353mn company 2017 Group revenues: c. 18,000 staff c. £7bn market cap USD 1.6bn 20% Over 108,000 Operations across 13 countries distribution SKUs 2017 RoAE 4 4
Five verticals built around centres of excellence Est. 1975 c.109,000 SKU’s Est. 2012 Over 1,000 beds Est. 2015 554 beds Cardiology Long-term CENTRE OF Care EXCELLENCE Est. 1975 1,259 beds Est. 2015 106 beds & c.20k Cycles 5 5
Future growth driven by a well-defined strategy NMC Health’s strategy is built on three key tenets 1 2 3 Capacity Build Capabilities Focus Geographic Expansion 2015 Strategy Update 2015 Strategy Update 2017 Strategy Update 2017 Strategy Update Accelerate the establishment of Centres of Excellence in Accelerate the establishment of Centres of Excellence in Addition of new verticals focused on highly key specialties within existing hospitals key specialties within existing hospitals underserved segments in the UAE and wider GCC and further development of Centres of Excellence Increase participation in the growing UAE medical Increase participation in the growing UAE medical tourism industry and establish NMC as a destination of tourism industry and establish NMC as a destination of Expanding the healthcare business’ target market choice choice from the GCC to wider emerging markets Grow NMC’s medical speciality offering and clinic Grow NMC’s medical speciality offering and clinic network within the UAE and maximising operational network within the UAE and maximising operational synergies synergies Fertility to be developed as a global business taking advantage of substantial growth opportunities Establish a strategic presence outside the UAE with Establish a strategic presence outside the UAE with leading global medical institutions to enhance and leading global medical institutions to enhance and expand technological know-how and medical expertise expand technological know-how and medical expertise Rapid adoption and deployment of technological Increase NMC’s footprint in Saudi Arabia and the Increase NMC’s footprint in Saudi Arabia and the innovation via both organic initiatives and acquisitions broader GCC via organic initiatives and acquisitions broader GCC via organic initiatives and acquisitions 6 6
An expansive footprint: 137 facilities across 13 countries 7 7
Agenda 1 Overview of the business 2 Understanding the Saudi opportunity better 3 Transformational partnership with GOSI to form a new KSA healthcare champion M&A: A vital part of the story 4 5 Financial outlook 6 A closer look at key assets 7 Appendix 8 8
Attractive demographics working in NMC’s favour 2% growth rate p.a., twice the global growth rate NMC has c. 1,200 licensed beds in UAE with a population base of 9-10mn. This implies potential for 3,000-4,000 beds in KSA on simple comparison 33m pop’n KSA faces an estimated shortage of 30,000 beds, requiring substantial investment Considerable Prominence 30% of the demand for LT of lifestyle pop’n <19 yrs care beds disease Median age of 29 years Beds shortage in KSA estimated As with most GCC countries, Healthy outlook for various at 15,000 lifestyle disease is a major medical segments NMC focuses problem in KSA 30% of existing, overall beds in on: the system blocked by LT care Almost 70% of the population is Obstetrics and patients obese Gynaecology; Paediatrics; Geriatrics continues to expand 30% of the population is Fertility (IVF) and at a rapid 7-8% CAGR diabetic, or pre-diabetic Cosmetics 9 9
Re-Focus on private healthcare insurance roll-out a significant driver Anticipated re-focusing on insurance roll-out will be a significant growth driver in Saudi Arabia 3.1 12.1 CCHI expected to Shift towards enforce insurance Saudization to of uninsured enhance number of Individuals Saudis during Saudis eligible for under Private 2018 private insurance Insurance Mandate 0.8 (15.2 mm) 2.3 Saudi Expats citizens (c.10mm) (c. 5mm) 2.8 9.3 Insured Uninsured Source: BUPA Arabia 10 10
Agenda 1 Overview of the business 2 Understanding the Saudi opportunity better 3 Transformational partnership with GOSI to form a new KSA healthcare champion M&A: A vital part of the story 4 5 Financial outlook 6 A closer look at key assets 7 Appendix 11 11
NMC and GOSI have entered a strategic partnership to create a new national healthcare champion in KSA 1 Formation of a new and unique national champion 2 #2 private healthcare operator in KSA by beds capacity 3 Strong platform with pan KSA presence 4 Wide ranging yet well defined investment mandate 5 Strong synergy potential to support sustainable value creation 12 12
Formation of a new national champion JV capitalization New structure majority > 51% < 49% 1 KSA Assets New JV New JV majority 38.9% At SAR70 / 2 share 38.9% KSA Assets JV to be capitalized through: NMC to fully consolidate the JV’s financials and retain 1 NMC to transfer its KSA assets operational, Board and management control Transaction remains subject to regulatory approvals and GOSI/ Hassana to transfer their stake in CARE at due-diligence 2 c.SAR70 per share 13 13
Addition of CARE to the existing portfolio: substantial growth opportunity Significant milestones achieved since inception which now includes 2 flagship hospitals +10% 10% 1967 USD228m 2013-17 Rev. 2017 Net profit Year incorporated 2017 Revenue CAGR margin +7% 20% 2013 USD46m 2013-17 EBITDA 2017 EBITDA Year listed 2017 EBITDA margin CAGR 0.5x c. 3,000 USD667m USD380m Leverage (2017 Total staff Market cap. (1) Total assets Net Debt/EBITDA) RCH 330, CNH 1 2 1 495 Polyclinic Hospitals Mobile unit Number of beds 1967 1991 2015 Note: company information, Facstet. SAR to USD exchange rate: 0.2666 (1) As of 7 June, 2018 (closing share price: SAR55.8) 14 14
Newly formed JV platform will be the second largest Saudi operator by bed capacity in KSA A combination of NMC’s KSA assets and CARE would immediately create one of the largest private healthcare providers by beds capacity Beds capacity and number of hospitals Beds capacity and number of hospitals Strategic geographic positioning across KSA Strategic geographic positioning across KSA (1) c.1,850 10 (1) Al Rashid Al Salam Hospital Medical Group 1,489 (2) 7 KSA 64 beds 100 beds 1,328 3 Ha’il Al Khobar Riyadh Care (3) 6 (2) 1,020 Hospital As Salama 330 beds Hospital 998 (4) Riyadh 2 (3) Jeddah 140 beds 825 2 Najran Chronic Care National Care 788 5 220 beds Hospital Al Qadhi (2) 664 5 495 beds Specialty KSA 140 beds NMC’s hospitals CARE’s hospitals # of beds capacity # of hospitals Source: companies website, AlpenCapital GCC Healthcare industry report (March 2018) Notes: Market cap as of 6 June 2018 (1) Best estimate for the number of beds from publicly available sources which include the under construction Al-Habib Medical City, Al-Khobar Hospital and two hospitals in Jeddah (2) No of beds does not include announced Greenfield project in Al Khobar by NMC (3) Includes the under construction Mouwasat Hospital Al Khobar (220 beds) (4) Includes the expansion of Dallah Hospital Al-Nakheel by 150 beds and the development of Namar Hospital (400 beds) 15 15
NMC is now in a position to replicate their full continuum of care across Saudi Arabia UAE UAE KSA KSA UAE Establishing an integrated network across the full continuum of care Tertiary Highly specialised Multi-specialty Primary Care 16 16
Agenda 1 Overview of the business 2 Understanding the Saudi opportunity better 3 Transformational partnership with GOSI to form a new KSA healthcare champion 4 M&A: A vital part of the story 5 Financial outlook 6 A closer look at key assets 7 Appendix 17 17
Snapshot of key acquisitions LTM EV/EBITDA multiples paid: recent acquisitions (>USD25mn) LTM EV/EBITDA multiples paid: recent acquisitions (>USD25mn) Price performance post-acquisition (+4 months) Price performance post-acquisition (+4 months) NMC undisturbed LTM EV/EBITDA (pre-acquisition) 33.9x 14% Price movement (from pre-announcement closing price) 30% 23.2x 22.5x 22.2x 16% 21.0x 19.9x 19.9x 17.4x 36% 12.9x 12.6x 12.4x 4% 11.1x 10.2x 9.6x 8.5x 7.6x 14% 57% +24% on average Feb-15 Apr-15 Apr-15 Jun-15 Nov-15 Aug-16 Dec-16 Jan-18 Demonstrated discipline in identifying and executing Significant medium-term returns to NMC immediately accretive acquisitions shareholders from integration of acquisitions 18 Source: NMC, S&P Capital IQ 18
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