June 25, 2015 2 3 4 ` FY10 FY11 FY12 FY13 FY14 FY15 Gross - - PowerPoint PPT Presentation

June 25, 2015

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64% 34% 2%

7,207 2,008 9,215 44 11 55 6,200+ 10,000+ 3,400+ 1,822  Shareholding(1): Promoters (34.4%), FIIs & FCBs (55.6%), MF/FI/IC (2.0%), Others (8.0%)  Market capitalization of ` 190,490 mn(4) and Debt to Equity ratio of 0.52x(1)  Health Insurance (AHEL stake 10.2%)  Primary Clinics  Sugar Clinics  Birthing centres – “CRADLE”  Day Care Centres

across 21 states (1) As on 31st Mar 2015. (4) NSE Closing price on 31st Mar 2015 Source: Company audited financials and Q4FY15 Earnings Update.

# Source: Frost & Sullivan

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(2) All financial are for fiscal year (FY) ended March 31. (3) Fx used: US$1= ` 63.

* FY15 info for owned hospitals only. Does not include managed hospitals

350,000+

Admissions

3,200,000+

Out-Patients

250,000

Preventive Health Checks

11,000+

Heart Surgeries

5,000+

Joint Replacements

14,000+

Neuro Surgical Operations

500

Robotic Surgeries

1,100+

Kidney Transplants

400+

Liver Transplants

120

Countries Medical Value Travel

170

Bone Marrow Transplants

155,000+

Radiotherapy Sessions

47,000+

Chemotherapy Sittings

FY15 at Apollo Hospitals*

FY10 FY11 FY12 FY13 FY14 FY15 Gross Revenue(` mn) 20,265 26,054 31,475 37,687 43,842 51,785 Gross Revenue($ mn)

(3)

322 414 500 598 696 822 YoY Growth 25.50% 28.60% 20.80% 19.70% 16.30% 18.12% EBITDA 3,013 4,190 5,131 6,082 6,724 7,347 EBITDA Margin 14.90% 16.10% 16.30% 16.10% 15.30% 14.19% Profit After Tax (PAT) 1,376 1,839 2,194 3,044 3,168 3,399 PAT Margin 6.80% 7.10% 7.00% 8.10% 7.20% 6.56% Net Worth 16,776 19,238 25,194 27,641 29,955 32,443 Total Loans 9,132 9,585 8,183 12,179 13,601 20,142 Cash and Cash Equivalents 3,117 2,664 3,588 6,842 4,151 4,833

# of Beds: 9,215 # of Hospitals: 55 # of Beds: 5,100 # of Hospitals: 54 # of Beds: 2,078 # of Hospitals: 15 # of Beds: 7,452 # of Hospitals: 29 # of Beds: 5,118 # of Hospitals: 15 # of Beds: 1,103 # of Hospitals: 7 # of Beds: 2,016 # of Hospitals: 10 # of Beds: 1,250 # of Hospitals: 1

Source: Company Reports, CRISIL Research # Beds as on 31st March 2015. * Fortis corporate presentation as of April 2015, publicly available on Fortis Healthcare Ltd.’s website.

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Owned Beds CAGR (FY05-15) 9.2% Capacity Beds Operational

• No. of Hospitals

Category Wise Owned 7,207 6,321 44 Managed 2,008 2,008 11 Grand Total 9,215 8,329 55 Cluster Wise (Owned) Chennai 1,718 1,495 13 Hyderabad 959 930 7 Kolkata 540 540 2 Delhi 875 713 2 Bangalore 499 378 2 Ahmedabad 320 274 2 Tamilnadu (outside Chennai) 808 589 4 Bhubaneswar 290 264 1 Other India 1,198 1,138 11 Grand Total 7,207 6,321 44 Maturity Wise (Owned) > 5 years 4,406 4,334 24 3 - 5 years 957 773 7 1 - 3 years 1,136 740 6 < 1 year 708 474 7 Grand Total 7,207 6,321 44

*

Source: Company MIS Reports,

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2011 Apollo Day Care Surgery — facility for minor surgeries requiring short stay. Hospital at Karaikudi, Tamil Nadu 2013 Hospitals in Vanagaram (Chennai), Jayanagar (Bengaluru) & Trichy 2015 Hospitals in Nashik, Nellore, Women & child centers at Karapakkam & SMR, OMR Perungudi 2011 Apollo Institute of Robotic Surgery launched - the first robotic centre in Tamil Nadu 2012 Placed order for Proton therapy equipment for Cancer treatment 2013 Apollo Health City, Hyderabad performs Minimally Invasive Knee Replacement (Resurface) Surgery using OrthoGlide Medial Knee system

2011-2015

FY 2015

9,215 beds 1,822 stores Revenues 51,785 mn.

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In order to meet the global median of 30 beds per 10,000 population, India will need to invest over ` 14 trillion ($230 bn)

Source: CRISIL Research

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Service Excellence

Guest Relation

• Apollo has adopted the engagement

Pathway for Voice of Customer (VOC)

• Partnered with Gallup to benchmark

e-customer feedback with best in class hospitals globally

• In-house framework captures VOC

from Interactions and converts them into Qualitative and quantitative feedback for quick follow-up action

• Awarded “Best Innovation in service

delivery” In 2013 by AIMA & Hospitals Management Awards

Tender Loving Care

• Core training module for all

nurses

• Inspires the conversion of daily

interactions into memorable experiences, resulting in enhanced courtesy index for nursing

• Tender Loving Care (TLC) -

Training for frontline staff

• TLC acknowledge as “Best

Training Initiative in Healthcare” at “Asian Learning & Development Leadership Awards” In Dubai in 2013

Human Sigma

• 1st in India to adopt Human Sigma by

mapping customer and employee engagement to the Gallup “S” Methodology

• Ranked this year among top 37

companies that partner with Gallup

• This recognises exceptional leadership

that understands that engaging employees drives real business

• utcomes
• Apollo now among globally recognised
• rganisation for mastering how to engage

workforce to deliver sustainable growth

Admissions

• Minimises waiting

time for planned admissions

• Dedicated rooming

experience that

• rients patients and

attendees to various hospitals services

Discharge

• Post-discharge calls to patients for

suggestions and feedback 72 hours after discharge

• Speedy discharge summary for

planned discharges

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• Healthcare services: Improvement in operating metrics
• Strong continued revenue growth in mature clusters
• New Hospitals – driving substantial revenue growth – through quick

ramp up

• Standalone Pharmacies: Revenue growth and

margin improvement

• Standalone pharmacies reported a positive EBITDA for each of the

last five years FY11, FY12, FY13, FY14 & FY15

• All stores are in the growth phase with relatively mature stores growing

at a consistent rate with increasing EBITDA margins – improvement in first year store performance due to better ramp-up and lower losses

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India’s largest organized pharmacy retail chain with a network of 1,822 stores.

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• Asset light business model with an established track record
• Presence in metro centers such as Hyderabad, Chennai,

Bengaluru, Pune, Ahmedabad and NCR regions

• Offers a wide range of medicines and surgical products, hospital

consumables and over-the-counter products

• Own brand private labels (FMCG & OTC drugs) constitutes over

6% of FY14 turnover. Target to increase to 20% in next 5 years

• Introduced generic and in-house brands (Private Labels)
• Consistent growth in standalone pharmacy revenue
• Calibrated rollout: 190 stores opened in FY15, 129 stores opened in

FY14, 139 stores opened in FY13, 165 stores opened in FY12, 150 in FY11 and 166 in FY10

• Increased penetration of private label sales
• Integrate supply chain network and optimize inventory levels
• Emphasis on margin improvement
• Mature cohort of pre-2008 stores have achieved 5.9% EBITDA

margins in FY15

• Positive overall EBITDA margin FY 11 , FY 12, FY13, FY14 & FY15
• Regulatory Update: In September 2012, the Central Government

approved the DIPP proposal to permit 51% FDI in multi-brand retail, subject to certain conditions

Revenue growth of 18.1% from ` 43,842 mn in FY 14 to ` 51,785 mn in FY 15 Consolidated EBITDA grew by 9.3% % from ` 6,724 mn in FY 14 to ` 7,347 mn in FY 15 Consolidated PAT grew 7.3% from ` 3,168 mn in FY14 to ` 3,399 mn in FY15

(1) Capital employed for the calculation of ROCE does not include Capital Work in progress on new hospital expansion projects of ` 5,122 mn for FY15 and ` 4,810 mn for FY14 & investments in mutual funds and associates Previous year figures have been reworked/regrouped/rearranged and reclassified wherever necessary to conform to the requirement of revised Schedule VI format JVs include Ahmedabad–50%, Kolkata–50% ,PET CT–50%, Apollo Munich–10.23%, Quintiles–40%, Apollo Lavasa–37.50% , Future Parking Pvt Ltd–49% and Apokos Rehab Pvt Ltd - 50%

FY 15: financial performance

Revenues of ` 45,928 mn, 18.9% yoy growth EBITDA at ` 6,781 mn, 10.5% yoy growth EBIT at ` 5,200 mn, 7.3% yoy growth Higher Depreciation due to application of higher depreciation rates as per the New Companies Act & New Units – Nashik and Women & Child, OMR PAT at ` 3,466 mn, 4.8% yoy growth

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FY 14 FY 15

yoy (%) Revenue 38,616 45,928 18.9% Operative Expenses 20,019 24,240 21.1% Employee Expenses 6,102 7,210 18.1% Administrative & Other Expenses 6,357 7,698 21.1% Total Expenses 32,478 39,147 20.5% EBITDA 6,139 6,781 10.5% margin (%) 15.9% 14.8%

• 113 bps

Depreciation 1,291 1,580 22.4% EBIT 4,848 5,200 7.3% margin (%) 12.6% 11.3%

• 123 bps

Financial Expenses 871 833

• 4.3%

Other Income/ Exceptional item * 225 306 36.2% Profit Before Tax 4,202 4,673 11.2% Profit After Tax 3,307 3,466 4.8% margin (%) 8.6% 7.5%

• 102 bps

ROCE (Annualized) 14.6% 12.8% Capital Employed

(1)

33,205 40,703

FY 14 FY 15

yoy (%) Income from Operations 41,113 48,705 18.5% Add: Share of JVs 2,730 3,079 12.8% Total Revenues 43,842 51,785 18.1% EBITDA 6,724 7,347 9.3% margin(%) 15.3% 14.2%

• 115 bps

EBIT 5,046 5,230 3.6% margin (%) 11.5% 10.1%

• 141 bps

Profit After Tax 3,168 3,399 7.3% margin (%) 7.2% 6.6%

• 66 bps

Total Debt 20,142 Cash & Cash equivalents (includes investment in liquid funds) 4,833

Healthcare services (Existing) New Hospitals Healthcare services (Total) SAP Standalone Total Healthcare Services (Existing) New Hospitals SAP Munich (AHEL stake 10%) AHLL (incl. Cradle) Consolidated FY 15 Revenue 26,435 1,767 28,202 17,726 45,928 30,483 1,767 17,726 735 1,074 51,785 EBITDA 6,276 (75) 6,200 580 6,781 7,124 (75) 580 10 (292) 7,347 margin (%) 23.7% 22.0% 3.3% 14.8% 23.4% 3.3% 1.3% 14.2% EBIT 5,111 (300) 4,811 390 5,200 5,574 (300) 390 2 (435) 5,230 margin (%) 19.3% 17.1% 2.2% 11.3% 18.3% 2.2% 0.3% 10.1% FY 14 Revenue 24,437 531 24,968 13,648 38,616 28,312 531 13,648 607 743 43,842 EBITDA 5,900 (210) 5,690 449 6,139 6,688 (210) 449 (30) (172) 6,724 margin (%) 24.1% 22.8% 3.3% 15.9% 23.6% 3.3% 15.3% EBIT 4,838 (333) 4,505 343 4,848 5,330 (333) 343 (37) (257) 5,046 margin (%) 19.8% 18.0% 2.5% 12.6% 18.8% 2.5% 11.5% YoY Growth Revenue 8.2% 232.7% 13.0% 29.9% 18.9% 7.7% 232.7% 29.9% 21.0% 44.4% 18.1% EBITDA 6.4% NA 9.0% 29.4% 10.5% 6.5% NA 29.4% NA NA 9.3% EBIT 5.6% NA 6.8% 13.7% 7.3% 4.6% NA 13.7% NA NA 3.6%

FY 15: financial performance

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 Chennai & Hyderabad clusters

• Chennai cluster revenue growth of 12.1%
• Revenue growth of 8.5% in Hyderabad

 Others — driving substantial growth (17.2%) – focus on Inpatient revenue growth (17.3%). 16.6% growth in OP Revenues.  Significant Subsidiary / JV & Associate Hospitals — Revenue growth of 10.3%. 8% yoy growth in Bangalore & 6% yoy growth in Ahmedabad and 13% yoy growth in Kolkata.

Notes:

(1)

Others include Madurai, Karur, Karaikudi, Trichy, Mysore, Vizag, Pune, Karimnagar, Bilaspur, Bhubaneswar, Jayanagar,Nashik & Nellore.

(2)

Significant Hospital JVs/Subs/Associates are – Ahmedabad, Bangalore, Kolkata, Kakinada, Delhi & Indore(full revenues shown in table above).

(3)

Outpatient volume represents New Registrations only.

(4)

ARPOB and Net Revenue is net of doctor fees.

(5)

Revenues under the head “Total” have not been provided as Consolidated actual results will differ from Total due to proportionate consolidation. * Inpatient volumes are based on discharges. ** Previous year financial and operational numbers have been regrouped and reclassified wherever necessary to conform with current year classification and full year audited numbers.

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Total(5) Chennai cluster Hyderabad cluster Others(1) Significant subs/JVs/ associates(2)

Particulars

FY 14 FY 15 yoy (%) FY 14 FY 15 yoy (%) FY 14 FY 15 yoy (%) FY 14 FY 15 yoy (%) FY 14 FY 15 yoy (%)

• No. of Operating beds

5,811 6,321 1,264 1,491 930 930 1,585 1,821 2,032 2,079 Inpatient volume 331,678 353,547 6.6% 75,931 81,920 7.9% 51,048 51,877 1.6% 78,757 87,834 11.5% 125,942 131,916 4.7% Outpatient volume(3) 1,132,618 1,244,192 9.9% 351,195 381,931 8.8% 152,495 161,717 6.0% 231,102 257,174 11.3% 397,826 443,370 11.4% Inpatient ALOS (days) 4.54 4.43 4.35 4.43 4.49 4.15 5.00 4.80 4.39 4.30 Bed Occupancy Rate (%) 71% 68% 72% 67% 67% 63% 68% 63% 74% 75% Inpatient revenue (` mn) NA NA 8,372 9,273 10.8% 3,763 4,066 8.1% 4,573 5,364 17.3% 11,901 13,063 9.8% Outpatient revenue (` mn) NA NA 2,717 3,161 16.3% 820 905 10.4% 810 944 16.6% 2,237 2,537 13.4% ARPOB (` / day)(4) 23,684 25,381 7.2% 33,561 34,266 2.1% 20,002 23,081 15.4% 13,662 14,953 9.5% 25,590 27,506 7.5% Total Net Revenue (` mn)(4) NA NA 11,089 12,433 12.1% 4,582 4,971 8.5% 5,383 6,308 17.2% 14,137 15,600 10.3%

FY 15 Revenues EBITDA EBITDA Margins # of Stores 31 Mar’15

` 17,726 mn

30% yoy growth

` 580 mn FY15 ` 449 mn FY14

3.3%

FY14

3.3%

FY15 Added

242

Closed

52

Total

1,822

FY 15 Like-for-like Revenue per store growth

14.3% (yoy)

pre FY08 batch of stores

20.0% (yoy)

FY09 batch ROCE ~ 18% mature stores pre FY08 batch Gross addition of

53 stores

and closed

15 in Q4 FY 15

EBITDA margins

5.9%

mature stores pre FY08 batch SAP revenue grew by 29.9% EBITDA margins

3.3% 25

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Batch Particulars FY 14 FY 15 yoy (%) Upto FY08 Batch

• No. of Stores

434 425 Revenue/Store 11.63 13.30 14.3% EBITDA/Store 0.66 0.78 19.2% EBITDA Margin % 5.6% 5.9% 24 bps FY09 Batch

• No. of Stores

193 189 Revenue/Store 10.23 12.27 20.0% EBITDA/Store 0.30 0.46 52.0% EBITDA Margin % 2.9% 3.7% 79 bps FY10 Batch

• No. of Stores

184 175 Revenue/Store 9.13 10.95 20.0% EBITDA/Store 0.38 0.50 30.8% EBITDA Margin % 4.2% 4.6% 38 bps Total

• No. of Stores

1,632 1,822 Revenue/Store 8.36 9.68 15.8% EBITDA/Store 0.27 0.32 16.6% EBITDA Margin % 3.3% 3.3% 2 bps Total Revenues 13,648 17,726 29.9% EBITDA 449 580 29.4% EBITDA Margin % 3.3% 3.3%

• 1 bps

Capex (` mn) 161 222 Capital Employed (` mn) 3,336 5,299 ROCE (Total) 9.8% 6.8%

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Cluster strategy for expansion with Greenfield projects in attractive newer markets

We are focused on a Two pronged strategy on Healthcare services :

• Ensure continued dominance by expanding into key existing clusters of Chennai, Bangalore,

Hyderabad, Kolkatta, Delhi and Ahmedabad Planned expansion in metros like Mumbai & large cities like Pune etc with no existing presence – reaching to wider urban population

• Grow laterally in high potential Tier II cities – Expansion through REACH hospitals, first mover

advantage & leveraging the Apollo brand

Focus on Centers

• f Excellence

with one or two anchor specialties in each market. Oncology – a growing area across.

• Each of our key clusters besides being built around a quaternary care hospital , focus on one
• r two key specialties and build centers of excellence around that specialty
• Aim to gain significant market share in each of the key specialties
• Set benchmark standards in clinical outcomes, technology and practices in select acute and tertiary

care services – Cardiology, Oncology, Neurosciences, Critical Care, Orthopedics and Transplants (CONECT)

• Extend and expand our oncology presence both thru specialization and exclusive oncology

referral hospitals in the clusters. 200 bedded Cancer referral center under construction in Chennai with Proton Therapy

well planned strategy to deliver the next phase of growth

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Increase Presence in Indian Healthcare Retail Space & calibrated expansion in Standalone Pharmacies

• Retail Healthcare : Increase our presence and reach across all markets through retail healthcare

(Clinics, Sugar Clinics, Dental, Cradle & Dialysis) and Day Surgery centers through our Clinic subsidiary - AHLL

• Standalone pharmacy business - Calibrated expansion plans with focus on same store growth,

increased private label sales and margin improvement

Strong Doctor engagement Model and use of technology – guided by our Clinical excellence focus

• Doctor engagement and Clinical focus probably is one of our core strengths.

Doctor engagement model to be based on building group practice in key specialties with combination of incentives based on revenue share/ profit share

• Pioneers in use of technology to build robust health care systems capable of addressing

diverse patient needs and changing disease profile – Da Vinci Robotics in 4 locations, Truebeam , NOVALIS, Cyber Knife, PET-CT, PET-MRI, ECMO, E-ICU etc.

Optimise Asset Utilisation in flagship facilities & locations

• Enhance Out-Patients focus by creating value differentiators and leveraging on personalised

health checks advantage with the aim of increasing topline contribution from out-patients

• Garner higher market share in select acute and tertiary care services
• Specific plan to further penetrate deeper into Cardiology, Neurosciences & Oncology
• Focus on time-to-serve and service standards

Stabilise new facilities and compress time- to-maturity of planned capacity expansions

• Bhubaneswar: Currently at 80%+ occupancy – over 15% ROCE; Currently focused on: Enhancing

specialization mix and adding Oncology

• Hyderabad and Bangalore: New capacity additions being utilised for high-end tertiary care;

Recruitment of specialist consultants for COEs

• Shorter time-to-maturity is being planned for new facilities like: Vanagaram (260 beds),

Jayanagar (140 beds), Trichy (200 beds), Nashik (100 beds), Nellore (200 beds), OMR (170 beds)

Cost Efficiencies and Focus on Improving Key Operating Metrics

• Optimised asset utilisations and minimum waste of all resources thorough standardised SOP’s

and Lean Management

• Higher patient turnover by reducing average length of stay and optimised ward processes for

faster turnaround time of all diagnostic process

• Improving average revenue per bed day through richer case mix

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* Expected date of completion – updated as of June 25, 2015

# Standalone financials as on 31st Mar 2015

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Total funding requirement

` 16,626 mn

(already invested

` 4,580 mn)

new projects investment & funding

Significant headroom to raise capital debt equity ratio 0.52x # debt EBITDA 2.48x # Gross Debt ` 16,810 mn # Cash & Cash equivalents ` 3,571 mn # Net Debt ` 13,239 mn #

Location CoD* Type of Hospital

• No. of

Beds Total Estimated Project Cost (` mio) AHEL’s Share

• f Cost

(` mio) Additions in FY16 Navi Mumbai FY16 Super Specialty 350 4,374 4,374 North Bangalore FY16 Super Specialty 180 925 925 Vizag FY16 Super Specialty 250 1,494 1,494 MLCP FY16 400 83 Chennai-Main (Expansion) FY16 Super Specialty 30 100 100 Indore (expansion) FY16 Super Specialty 65 280 50 Sub Total 875 7,573 7,026 Additions in FY19 South Chennai FY19 Super Specialty 175 2,000 2,000 Proton FY19 4,200 4,200 Byculla, Mumbai FY19 Super Specialty 300 1,400 1,400 Patna FY19 Super Specialty 240 2,000 2,000 Sub Total 715 9,600 9,600 Total 1,590 17,173 16,626

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• Dr. Prathap C.

Reddy  Executive Chairman, Founder (M.D, MBBS, FCCP, FICA and FRCS)  Conferred the Padma Vibhushan in 2010  Conferred the Padma Bhushan in 1991  Spent 28 years with Apollo Hospitals

• Dr. Preetha Reddy

 Executive Vice Chairperson  On the Board since the year 1989 Suneeta Reddy  Managing Director  On the Board since the year 2000 Shobana Kamineni  Executive Vice Chairperson, on the Board since 2010  Over 20 years of experience in the healthcare industry Sangita Reddy  Joint Managing Director, on the Board since 2000  Received “Young Manager of the year 1998” award from Hyderabad Management Association  Was a member of the Prime Minister’s delegation to Malaysia organized by the CII

• N. Vaghul

 Independent Director, on the Board since 2000  Conferred the Padma Bhushan in 2009 Deepak Vaidya  Independent Director, on the Board since 2000  Chairman of the Audit committee Sanjay Nayar  Independent Director on the Board Vinayak Chatterjee  Independent Director on the Board,  Chairman of Feedback Infra Pvt Ltd Other Independent Directors  G Venkatraman, Habibullah Badsha, Rafeeque Ahamed and Rajkumar Menon

• K. Padmanabhan

 Group President and has been with the company since 1996  Responsible for business and strategic initiatives across the group

• S. K. Venkataraman

 Chief Strategy Officer and has been with the company since 1991  Served as the Chief Financial Officer and Company Secretary of the Company since 2002  Responsible for strategic initiatives across the group Krishnan Akhileswaran  Chief Financial Officer and has been with the Company since 2010  Over 15 years of experience in the field of Finance  Responsible for the finance function of the Company and its subsidiaries Anne Marie Moncure  Chief Executive Officer – Southern Region Responsible for hospital operations of the Southern Region

• Dr. K. Hariprasad

 Chief Executive Officer – Central Division and has been with the Company since 1999  Responsible for hospital operations for the Central Region

• Dr. Rupali Basu

 Chief Executive Officer – Eastern Region and has been with the Company since 2008  Responsible for hospital operations of the Eastern Region Jacob Jacob  Chief People Officer of the Company  Responsible for people initiatives – over 12 years

• f experience

Arvind Sivaramakrishnan  Chief Information Officer of the Company  Responsible for driving IT initiatives and projects

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