Max India Limited Investor Presentation February 2017 - - PowerPoint PPT Presentation
Max India Limited Investor Presentation February 2017 www.maxindia.com Max Group Vision To be the most admired corporate for service excellence Positive social impact Culture of Service Sevabhav Helpfulness Mindfulness
www.maxindia.com
Sevabhav Excellence Credibility
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1985 1993 1995 2000 2005 2007 2008 2009…
Entry into bulk pharma business; commenced
production of penicillin based drug intermediary Enters telecom in JV with Hutchison JV with Gist Brocades and becomes Asia’s largest manufacturer of drug intermediaries JV with Comsat to launch satellite communication services JV with Atotech BV for manufacturing printed circuit board plating Paradigm shift from B2B to B2C model – enters healthcare, life insurance and clinical research Warburg Pincus invests Rs. 200 Crore and Rs. 140 Crore in Max India and Max Healthcare Raises Rs. 1,000 Crore through QIP placement to fund continued expansion; Raises Rs 300 Cr from IFC for MHC expansion JV with BUPA Finance Plc, UK to enter health insurance business Enters next phase of growth in healthcare
planned in the NCR and nearby regions
next few years
COMSAT ATOTECH
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2010 2011 2012 2013 2014 2015 2016…
Goldman Sachs invests Rs. 522 Cr through CCDs, representing a 9.1% equity stake post conversion MHC doubles bed capacity, added 4 new hospitals i.e. Shalimar Bagh in Delhi NCR, Mohali & Bathinda in Punjab (set up under PPP model) and Dehradun Life Healthcare, South Africa’s healthcare major, acquired 26% stake in MHC for Rs. 517 Cr, MHC valued at Rs 2,300 Cr, making it the largest FDI transaction in the Indian healthcare space Mitsui Sumitomo, a part of the Japan’s largest insurance group, MS&AD, acquired 26% stake in Max Life from New York Life in cash transaction of Rs 2,731 Cr, valuing Max Life at Rs. 10,500 Cr Max India entered Senior Living with Antara Senior Living, with the first community in Dehradun, spread
200 resident apartments Life Healthcare equalized stake in Max Healthcare with Max India, MHC valued at Rs 3650 Cr; IFC Washington maintained their stake at 7.5% 2 landmark acquisitions by MHC;
Patparganj, acquired 78% stake in 340 bedded Pushpanjali hospital expandable upto 540 beds;
facility adjacent to Max Saket, acquired 51% stake in 230 bedded Saket City Hospital, expandable upto 1200 beds Max India concluded a mega corporate restructuring by demerging into 3 holding companies
businesses)
(Manufacturing & new businesses)
Health & Allied Business Life Insurance Business*
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(in the business of Life) Manufacturing & Other businesses Holding Companies Operating Companies
70% 46% 51% 100% 99%^
Group CSR Arm
30.4% 40.9% 45.1%
Promoter holdings in Max Group holding companies * MFS Board has approved the 3 way merger of Max Life into MFS, demerger of life insurance undertaking from MFS and merger of the said undertaking with HDFC Life and merger of residual MFS entity into Max India ^ Toppan Printing inducted as JV partner in MSF, will acquire 49% stake in MSF (on fully diluted basis)
100% 100% 100%
INR 142 billion+ Revenues… 9.5 Mn Customers*… 22,000 Employees*… ~67,000 Agents*… 2,700 Doctors*… Strong growth trajectory even in challenging times; a resilient & diversified business model Steady revenue growth and cost rationalization leads to strong financial performance Well established board governance….internationally acclaimed domain experts inducted Diversified ownership…..marquee investor base Superior brand recall with a proven track record of service excellence Strong history of entrepreneurship and nurturing successful business partnerships
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* Based on Dec’16 numbers
FY 2016 Summary:
PBT at Rs 465 Cr, up 9%
with Axis Bank
Premium Conservation
FY 2016 Summary:
with proposed investment in Azure Hospitality, which runs pan-Asian restaurant chains
expand capacity to 75,000 TPA
FY 2016 Summary:
EBITDA grows 26% to Rs 215 Cr.
to double bed strength to over 5,000
Distribution alliance with Bank of Baroda
Dehradun operations next quarter
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Number of outstanding shares : 26.73 Cr.
Promoters 40.9% Goldman Sachs 12.0% IFC 3.1% FII/ FPI 18.5% Mutual Funds 17.8% Others 7.7%
Shareholding Pattern as on Dec, 2016
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Shareholding concentrated with Marquee Investors
www.maxhealthcare.in www.maxindia.com
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Sources: India Brand Equity Foundation – Healthcare report, 2012; BofA Merrill Lynch Global Research, IBEF Mar'15
60 79 102 280 2010 2012 2015 2020 2025 Indian healthcare sector* Estimated size, Bn USD Demand drivers for growth
* Healthcare sector includes hospitals, pharmaceuticals, and medical technology sub-sectors
~500 mn
additional middle class by 2025
~45%
Insurance penetration by 2020
~134 mn
population > 60 years by 2020
~$8 bn
medical tourism market size by 2020
~320 mn
at risk of dying due to NCDs by 2020
~2 mn
beds required by 2025
CAGR
11.2%
CAGR
14.6% ^ 350 - 450
^ Depending upon public spending levels, insurance proliferation, and success of public-private partnerships by 2025
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Sources: BofA Merrill Lynch Global Research, IBEF Mar'15
Private players have established a dominating presence in tertiary / quaternary care 70% 63% 60% 78% 80% 30% 37% 40% 22% 20% Market Share Beds Inpatients Outpatients Doctors Private sector Public sector
70% 20% 10% Hospitals Pharmaceuticals Medical technology / Others Indian healthcare sector* Market share %
Market size of private hospitals is expected to reach ~$ 120 bn by 2020 22 36 50 120
2009 2012 2015 2020
Private sector hospitals Estimated size, Bn USD
CAGR ~14.7% CAGR ~19.2% * Includes hospitals, pharmaceuticals & medical technology / other companies 10
The surge of VC/ PE investments in recent years has eased funding constraints on growth
Annual VC/ PE investment’s in India’s Healthcare ($ Million) 580 485 1262 1359 835 2011 2010 2013 2012 2014 (H1)
29 45 71 43
Scale up of well funded incumbents
8,600 550, (2013 - KKR) 4,800 820, (2013 - Stan Chart, IFC) 1,300 700, (2015 - Temasek/Punj Lloyd)
CURRENT SCALE FUNDING (RS. CR.)
6,500 290, (2014 - CDC) 4,900 900, (2015 - TPG Capital) 2,500 (2012) 560, (2012 - Advent)
CURRENT SCALE FUNDING (RS. CR.)
2x
Note: Fortis and NH operational beds not split between owned and managed; Manipal’s # of managed beds assumed to be same for 2010 and 2013; assumed exchange rate of 1$=INR60 Source: Crisil research, company websites and presentations, secondary sources Slide sourced from Bain and Company 11
KEY ENABLERS WHERE DO WE WANT TO BE WHAT WILL WE BE KNOWN FOR
clinicians, nurses and healthcare leaders
analytics enabled clinical outcomes and customer experience
continued care
chosen geographies
Quaternary care
North India; however serving more than 300 towns in India and 30+ countries
To become an admirable institution known for service excellence, medical excellence, scientific research, and medical education
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Saket Noida Gurgaon Vaishali Shalimar Bagh Saket City Pitampura
OUTSIDE NCR NCR
Patparganj
Mohali Bathinda Dehradun
2400+ available beds across the network
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Advanced robotics provides high precision, and minimum invasive surgery across multiple specialities such as Oncology, Neurology High dose radiation with extreme precision (~ 0.5 mm accuracy) Advanced image guided surgery - provides real-time views and automated image processing Provides precise correlation and facilitates proper treatment for Oncology, surgical planning and radiation therapy
Robotics Brain suite Novalis LINAC PET-CT
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Robotic radio-surgery (non-invasive) system for both cancerous & non-cancerous systems Designed for revolutionary single incision laproscopic surgery through catheter-based, flexible instruments Economical digital storage and convenient access to medical images from multiple modalities
CyberKnife* Picture Archiving & Communication System - PACS SPIDER
* planned
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Recognition platform has led to positive shift in mindset
Sigma and other methodologies has resulted into business impact of over 15 Mn USD 57% 68% FY`15 FY`16
11%
Top 2 Box Rating*
* MHC is the only healthcare company who has deployed a third party (IMRB) to conduct Satisfaction survey
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Executive Committee Unit Heads Unit Management Committee (MANCO) Group Medical Advisory Council (GMAC) Hospital Medical Executive Council (HMEC) Doctor’s council Managerial Clinical Administration Nomination & remuneration Audit Investment & performance review Medical excellence & compliance Service excellence Scientific projects & technology Corporate social responsibility Board & 7 committees
Governance
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NABL/ NABH accredited ISO 9001:2000 & ISO 14001: 2004 certified DL Shah National Award on ‘Economics
FICCI Excellence Awards - Operational Excellence Leadership positions in NatHealth and CII - healthcare
First MHC hospital started in 2002 MHC is one of the top 3 healthcare chains in India
Strengthened capabilities to provide comprehensive tertiary & quaternary care Network of highly qualified doctors, nurses and medical personnel Organic growth through expansion of hospital network JV with Life Healthcare, South Africa, extending expertise and global reach Business World Healthcare Award in Patient Experience & Safety
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Clinical Safety (5) Operational Excellence (7) Service Quality (3) Others (4)
in Healthcare
Asia Team Excellence Award (Mission Pride)
Healthcare
(reducing carbon foot print of tertiary care hospital)
initiative (prevention of patient fall)
(BCMA medication process improvement )
and Practices (1st runner up)
brand
and development
686 810 1,002 1,095 1,283 1,423 147 312 461 759 2,181 FY14 FY13 1,149 1,744 FY12 823 14 FY15 1,407 FY16 686 FY11 26% New Units, < 5 Years Mature Units, > 5 Years
MHC Annual Gross Revenues by hospital age
CAGR, FY13-16 Mature Units
12%
New Units
73%
Total, MHC 24%
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52 166 190 50 115 125 (43) (37) 31 FY11 52 12 FY12 7 112 71 221 FY14
FY13 34% 173 FY16 FY15 < 5 Years > 5 Years
MHC EBITDA by hospital age
% EBITDA Margin, < 5 Yrs.
xx
% EBITDA Margin, MHC
xx
7.7 1.5 6.4 8.2 10.1 10.5
% EBITDA Margin, > 5 Yrs.
xx
7.7 6.2 11.8 12.0 13.4 14.0 n/a
1.5 4.1
ROCE for mature units at 17.3% (FY16) vs. -1.5% for new units (FY16)
NOTE: FY16 EBITDA excludes Rs. 6 Cr. of one time expenses towards the Pushpanjali and Saket City acquisitions; FY15 excludes Rs 3 Cr of one off expenses
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Maintained healthy occupancy levels despite strong bed addition momentum Steady growth in Revenue per occupied bed Sharper focus on key tertiary tower specialities Consistent improvement in Average Length of Patient Stay
Figures in Rs. Thousands Per OBD
908 1,094 1,235 1,283 394 445 502 680 312 992 1,680 1,472 378 1,302 FY14 FY13 FY12 FY16 1,785 +16% FY15
+7% 42 39 FY14 35 35 FY15 FY13 FY12 FY16 32 +3% 3.3 FY15 3.4 FY14 3.6 FY13 FY16 3.5 FY12 3.5
Figures in Number of days
Number of available beds
xx
NOTE: FY16 excluding Vaishali and Saket City Hospital 55% FY15 14% 6% 13% FY16 13% 10% 2% 56% 13% 10% 4% 4% 14% 3% 10% 3% 15% FY12 14% 9% 9% 6% 48% 7% 4% 5% 51% 7% 3% 53% 10% 12% 10% 8% FY13 FY14 11% 10% MAMBS Onco Renal Neuro Cardiac Ortho
74% 72% 74% 70% 69%
beds
beds Occupancy (%)
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All figures for 9MFY17 Max Healthcare Fortis Apollo* Narayana Health
Operational Beds (No.) +2,300 +3,400 +6,900 +4,800 Capital Employed (Rs. Cr.) 2,197 8,606 5,884 # 1,141 Net Revenue (Rs. Cr.) 1,850 Cr, +21% 2,799 Cr, +10% 4,113 Cr, +13% 1,395 Cr, +18% International Rev./ Qtr. 175 Cr, +28%, 9.0% of revenue 295 Cr,+17.5% 10.5% of revenue N.A 107 Cr, 8% of revenue Operating EBITDA (Rs. Cr.) 203 Cr, +34% 435**/127, +15.7%**/309.5% 494 Cr, +4% 169 Cr, +33% EBITDA Margin (%) 11.0% 15.5%**/4.5% 12.0% 12.1% ROCE (%) 6.8% (Mature units 19.2%) 3.9% 9.2% # 14.2% EBITDAR per OBD (Rs. lacs) 18.5 (excl New Acq 20.4) 22.3 18.8 9.5 ALOS (days) 3.24 3.56 4.04 3.90 ARPOB/p.a (Rs. Cr.) 1.50 Cr 1.44 Cr 1.16 Cr 0.77 Cr
*Apollo Revenues excludes standalone pharmacy revenue and grossed up by 25% adjusted for doctor consult fees and depreciation ** Before Net BT Costs; # Capital employed and ROCE based on FY16 numbers 23
patient care model driven by our belief that patients are increasingly seeking access to personalized treatment
attractive alternate business opportunity
strengths while looking
2500+ beds to reach 5000+ beds in end state
new beds to be maintained over next 5 years of growth
hospitals through improvements in specialty/channel mix and cost structures
current network
additional bed capacity
Oncology Day care centres
Pathology business
hospitals
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A Increasing share of preferred channels to improve profitability
As the new units in the network mature, the share of preferred channels will increase in the revenue mix and tend to mirror the share in current mature units Action plan in place to further increase the share of preferred channels in the mature units 19.4% 20.6% 16.9% 25.6% 19.4% 16.2% 18.9% 15.6% 37.0% 36.3% 36.6% 100.0% 14.0% 12.9% MHC 100.0% 1.6% Mature Units 9.1% International New Units 100.0% Institutional/PSU TPA Walk-In MAC
Preferred Channels Non-preferred Channels
Healthcare revenue channel share*, FY16 Percent
* Does not include Max Smart
Walk-in Inter- national
delivery on new positioning
TPA
prevention/ wellness space
at new customer segments
digital footprint in select markets
MAC Institutional
business via upcountry channel
improvement through focus on collections, material cost, and ALOS
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TRANS- PLANT
Share of preferred tertiary/surgical specialties to increase in the revenue mix, in line with the historic trends Action plan in place to grow focused specialties Healthcare revenue specialty share*, FY16 Percent
in all DMGs
ONCOLOGY
NEURO SCIENCES CARDIO SCIENCES
center in Saket complex; launch LTP
selected locations
institutions – people & best practices
35% 32% 31% 65% 68% 69% FY-14 FY-15 FY-16 Secondary Tertiary
A
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targeted for FY17 Focus on structural improvements
formulary driven substitutions
modelling
benchmarks Build strength in procurement
supplier/vendor eco-system Invest in technology / digital
productivity (Smart Kiosks, e-ICU etc.)
provide health services
Re-engineer/simplify processes
elimination of wasteful steps MATERIAL COST CLINICIAN COST PERSONNEL COST OTHER INDIRECT COST
A
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2,471 5,075
84
184 650
FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 & beyond Total
Smart : 44 Vaishali: 40 S.Bagh: 104 Mohali: 80 Smart: 650 Mullanpur: 400
Smart: 350 Saket: 250 PPG: 200
1346 1430 737 675 859 1509 1024 2520 1125 1125 1818 1986 1986 1986 2471 2555
FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 and beyond
> 5 years < 5 years
B
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2,471 2,555 2,555 2,661 2,845 3,495 3,495 5,075
Vaishali : 106
Max PPG - Potential to dominate the E. Delhi and Western UP
Builtup
Rechristened MHC Vaishali Post acquisition
The Acquisition Financial Turnaround Q2FY16 H2FY16 H1FY17 12.2 0.6 5% 67% 15.5 2.6 17% 64% 17.0 2.4 14% 70% Revenue* (cr) EBITDA* (cr) EBITDA (%)* Occupancy * Figures are monthly average Higher EBITDA in H2FY16 is due to exceptional items in Mar16
B
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Q3FY17 18.0 2.6 15% 68%
State-of-the-art transplant centre – for all transplants incl. heart, liver, kidney, bone marrow Asia’s premier quaternary care with 7 centres of excellence India's first international patient centre Largest private facility in India Dec 15 H1FY17 13.6
69% 16.2 1.45 9% 75% Revenue* (cr) EBITDA* (cr) EBITDA (%)* Occupancy
specialties
developed to offer complementary, allied healthcare services such as Rehab, assisted living etc. by GMHRC
Enterprise Value of Rs. 1,025 Cr. (Equity Value Rs. 325 Cr. for 51% stake and debt of Rs. 325 Cr;
13.8
66% Q4FY16
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B
* Figures are monthly average
Q3FY17 18.2 2.09 13% 77%
low-capex by leveraging existing infrastructure
incremental revenues for MHC expected to be higher (> 35%)
Why will MHC succeed?
Physician Clinic Hospital tie-ups Govt hospital/PPP Hospital lab Home sample collection POC Collection center
MAX LABS 24X7
Consumer Clinicians/ Institutions
IPD/OPD Pathology services (FY16)
C
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Q1FY17 0.8 0.3 41% 1.1 0.3 23% Revenue* (cr) EBITDA* (cr) EBITDA (%)* 1.5 0.5 35% 3.4 1.1 32% Q2FY17 Q3FY17 9MFY17 * Figures are monthly average
Financial Performance
Actual design images
Our belief Our differentiators Patients are increasingly seeking access to a more personalized treatment (vis-à-vis at a hospital) along with a unique adjunctive ambience/experience and a high focus on efficiency 1. Led by a stalwart Med. Oncologist 2. End to end design partnership with GE 3. Staff expertise and iron clad processes 4. Comforting ambience D
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Q1FY17 0.1
2.1
Revenue* (cr) EBITDA* (cr) EBITDA (%)* 1.5
3.7
Q2FY17 Q3FY17
Financial Performance
9MFY17 * Figures are monthly average
www.maxbupa.com www.maxindia.com
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Leveraging the strengths of both partners to build a robust and profitable enterprise with focus on service excellence
building market leading businesses
health insurance & healthcare businesses
142 billion
Indian market
value and sharing it with its strategic partners
expertise and local knowledge of Healthcare and Insurance
controlled with Bupa contributing it’s global expertise in Health Risk Management & product development and Max contribution on other aspects such as people, policies, regulatory etc.
insurance provider in UK
insurance and healthcare
billion
countries
for international healthcare coverage –11,500 hospitals –750,000 medical professionals
health care provider globally
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Health insurance market (including PA, Travel & contribution by life insurers)
FY 15-16 2,800 Travel & LI contribution 2 PA FY10-11 Retail 50,000 1,600 Government sponsored 9,100 Corporate FY19-20 (Estimated) 23,600 17,500 4,500
GWP in Rs cr
27,362
Low penetration and coverage
~0.2%
insurance Increasing affluence and awareness
capita
population by 2025 (from 5% in 2005)1 Rise in health care costs
US/UK & ~30% in China) Rise in incidence of chronic diseases (viz. Cancer, heart diseases) & lifestyle related diseases (diabetes) Regulatory & policy level interventions
Key drivers of growth Indian health insurance market is likely to grow by 20-25% CAGR in next 5 years
1 Mckinsey report ‘Tracking the growth of India’s middle class’ in 2007 2 Growth rates for Travel & LI contribution of HI not available (Assumed at 16% same as 5 year CAGR of PA)
SAHIs are the fastest growing section in the industry… …led by distribution expansion as well as product launches
capacity in agency channel over last 2 years – branches as well as frontline sales force
capacity to their network
Maternity specific, Health savings product etc.
ICICI Lombard, Aditya Birla Health)
focus on motor and health retail segment)
Chola MS, Fairfax Holdings – ICICI Lombard, Cigna – Cigna TTK)
L&T General Insurance for Rs 551 cr Source: GI council; Market intelligence, team analysis Overall HI industry
Key recent trends
97 325 343 579 1302 150 401 472 744 1815 +23% +55% +28% +38% Religare Apollo MBHI Star +39% Cigna +24% 24516 19748 2646 5099 12002 3615 5827 15074 SAHI’s Pvt GI PSU’s +26% +14% +37%
Apr-Dec’15-16 Apr-Dec’16-17 Apr-Dec’15-16 Apr-Dec’16-17
GWP in Rs cr GWP in Rs cr
37
FY10-11 FY11-12 FY12-13 FY14-15 FY15-16 GWP, Rs cr FY13-14 99 207 308 373 Channel Service model
processing
First RSBY scheme won
business
Health’, annual brand property
partnership (Deutsche bank)
network providers
settlement (92% cases)
more banca partnerships
296%
108% 53% 18%
47 215 454 681 799 Lives, ‘0001
xx%
Y-o-y growth 80% CAGR 476 1,010
went national touching 33 MM lives
partners (Sarv UP, Muthoot, Coverfox, Bank Bazaar)
26 Segment Apr-Dec’16-17
Baroda serving more than 5,400 branches
Instruction for auto renewal,
product launched at Federal 28%
401 1,217
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inception
B2C book (linear customer acquisition vs. lumpy demand
grown faster than market (market growth ~16% CAGR)
model choices and some execution challenges have resulted in higher upfront
80% Year 2 Year 4 Year 3 Year 5 Year 1 Year 6
(2015-16) (2010-11) (2015-16) (2010-11)
Combined Ratio* (%) Gross written premium (Rs cr)
* Combined ratio = Claim ratio (Net claim incurred / Net Earned premium) + Opex ratio (Opex / GWP) + Commission ratio (Net commissions / GWP)
25 77 162 245 354 466 22 38 56 17 6
8 1 4 B2C B2B B2G
25 99 207 308 373 476
553% 212% 151% 142% 127% 115%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
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Heartbeat
Hospitalization costs including:
dialysis
linked to current ailment 30 days prior and 60 days post hospitalization.
transplant
Features
3Lacs, 5Lacs, 7.5Lacs & 10Lacs
twice sum insured
network hospitals
3Lacs, 5Lacs & 10Lacs
Health Companion
Hospitalization costs including:
dialysis
linked to current ailment 30 days prior and 60 days post hospitalization.
transplant
Features
3Lacs, 5Lacs & 10Lacs (optional)
Health Assurance
Accident Care:
100% of allocated coverage
Disability benefit of 125% of allocated coverage
Disability benefit
Disability & Accident Hospitalization benefit Critical Illness:
staggered pay-out for 5 years Hospital Cash:
1000/2000/3000/4000
daily cash benefit
Group Business
Group Health Insurance:
Group Personal Accident:
Reimbursement
children
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leading industry player)
Brand
IT
Customer Service
Product
Leaders
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For the period ended Sept 30, 2016
In a large, fast growing market Max Bupa delivers 1.1m customers, a vast distribution network and leading brand
1,450 employees 6 banca partners with 7,400 branches accessing 70m customers 15,000 agents 98% B2C business 3,600 providers in network 33m lives touched through Walk for Health (2015-2016) 1.1m retail customers 2.1m total customers GWP Rs. 476 cr (2015-2016) 80% 5 year CAGR
Focus on B2C segment from inception Investments in direct channels to support the “pull” model; Premium infrastructure (office locations and size) in line with overall positioning Launched first to industry innovations - Highest Sum Insured options, No age restriction for enrolment, No claim loading, Guaranteed renewability, No 2 year waiting period Max Bupa is the only insurance company with an annual brand property - Walk for Health initiative Customer service is a key focus area – ~80% of customers rate claims experience with Max Bupa as very good
Since inception, we started offering in- house claims in a primarily TPA serviced market
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Portfolio management approach to renewals & profitable growth Compelling product proposition Build Digital Enable the workforce 1 2 3 4 5 6 Optimize expenses & robust claims management Strengthen processes & technology
Digitally enable end to end customer journey Build a Customer centric, Compliant & Cost conscious Culture Broad base the franchise with partnerships & alliances Provider of choice in the Affluent segment in urban India
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This presentation has been prepared by Max India Limited (the “Company”). No representation or warranty, express or implied, is made and no reliance should be placed on the accuracy, fairness or completeness of the information presented or contained in the presentation. The past performance is not indicative of future results. Neither the Company nor any of its affiliates, advisers or representatives accepts liability whatsoever for any loss howsoever arising from any information presented or contained in the presentation. The information presented or contained in these materials is subject to change without notice and its accuracy is not guaranteed. The presentation may also contain statements that are forward looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from our expectations and assumptions. We do not undertake any responsibility to update any forward looking statements nor should this be constituted as a guidance of future performance. This presentation does not constitute a prospectus or offering memorandum or an offer to acquire any securities and is not intended to provide the basis for evaluation of the securities. Neither this presentation nor any other documentation or information (or any part thereof) delivered or supplied under or in relation to the securities shall be deemed to constitute an offer of or an invitation. No person is authorised to give any information or to make any representation not contained in and not consistent with this presentation and, if given or made, such information or representation must not be relied upon as having been authorised by or on behalf of the Company any of its affiliates, advisers or representatives. The Company’s Securities have not been and are not intended to be registered under the United States Securities Act of 1993, as amended (the “Securities Act”), or any State Securities Law and unless so registered may not be offered or sold within the United States or to, or for the benefit of, U.S. Persons (as defined in Regulations S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the applicable State Securities Laws. This presentation is highly confidential, and is solely for your information and may not be copied, reproduced or distributed to any other person in any manner. Unauthorized copying, reproduction, or distribution of any of the presentation into the U.S. or to any “U.S. persons” (as defined in Regulation S under the Securities Act) or other third parties ( including journalists) could prejudice, any potential future
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President – Max Group Over 30 years of global experience in Banking and Financial markets.
Managing Director at Max India Ltd. & Max Financial Services Ltd., Over 30 years of experience in Corporate Finance and Investment Banking.
Economist and Leading Academic Serves on Board of many Indian MNCs as Dr Reddy’s, Infosys, IDFC, Crompton Greaves, Cairn India Ltd. etc
Independent Director; Leading Finance professional associated with the development of Cost & Management Information Systems for over 150 firms
Managing Director & CEO- Max Healthcare Over 20 years of experience in financial services. Previously Chief Operating Officer at Max Life Insurance.
Partner at Artiman Ventures, focusing on early- stage technology & life science investments PhD in Computer Science from Columbia University
Director of Max Institute of Minimal Access, Metabolic and Bariatric Surgery. More than 35 yrs
major Lap procedures
Chief Executive Officer, Life Healthcare Group Extensive experience at executive level in employee benefits and healthcare sectors
Founder of Agora Partners PVt Ltd Previously Head of Singapore office at Greater Pacific Capital and was also the CEO of ICICI Securities.
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Non Executive Director and Group Executive, Strategy and Investor relations, Life Healthcare Group Commerce and Law graduate and currently responsible at LHC for driving the international (Poland, India and other territories) strategy, South Africa strategy and managing Investor relationship
Non Executive Director and Chief Financial Officer, Life Healthcare Part of the LHC group for last 17 years and has fulfilled various financial roles
Managing Director & CEO- Max Healthcare Over 20 years of experience in financial services. Previously Chief Operating Officer at Max Life Insurance.
Senior Director & Chief Financial Officer Over 20 years of experience in across all facets of finance; previously CFO of Fortis Healthcare.
Senior Director & Chief Growth Officer 18 years of diverse experience across industry and management consulting with McKinsey & Company
Director- Human Resources & Chief People Officer Over 17 years of experience in HR across FMCG, Financial Services and Health Care sectors. Previously global head of HR at Glenmark Pharmaceuticals
Director & Zonal Head – NCR 1 Over 23 years of experience in Business Management and Sales & Marketing; previously with Amex
Director- Sales & Marketing More than 17 years of experience in diverse fields such as advertising, retail , healthcare and media. Previously Head, Sales and Marketing at Fortis Healthcare
Director- Clinical Directorate & Institute of Internal Med. Over 23 years of experience in the field of Internal Medicine
Director - Legal, Compliance and Regulatory Affairs Over 19 years of experience in diverse sectors such as Trading, IT, Export and Manufacturing; previously with Carrefour and NIIT
Senior Vice President & Head of Service Excellence More than 19 years of in-depth experience across the Financial Services sector; previously with Max Life Insurance
Chief Information Officer Over 21 years of experience in varied industries such as Health/ Life Insurance, IT/ITES, and Consulting; previously CIO of Prudential Life Assurance
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Chairman – Cancer Care, Director & Chief Consultant - Surgical Oncology Over 25 years of experience in Surgical Oncology.
Director - Clinical Directorate & Institute of Internal Med. Over 23 years of experience in the field of Internal Medicine
Strong consultant bench strength of 350+ across specialities :
Director- Paediatrics & Paediatrics Surgery Over 20 years of experience in Paediatric surgery - complex congenital malformations
Director – Max Institute of Neurosciences, Dehradun Renowned Neurosurgeon having 40 years experience Recipient of the BC Roy award
Director of Max Institute of Minimal Access, Metabolic and Bariatric Surgery. More than 35 yrs of experience in Lap Surgery, completed 70K+ major Lap procedures
Chairman - Cardiology, Max Healthcare Clinical experience of more than 39 years Former Head, Department of Cardiology, AIIMS
Chairman – Urology,Renal Transplant, Robotics(Max Saket Complex) and Uro-Oncology Max Saket 2200 Kidney Transplantations in the last 25 years and over 1500 lap donors nephrectomy
Chairman - Liver Transplant & Biliary Sciences 2,200+ liver transplant surgeries & over 30 year experience in Liver Transplants Recipient of the BC Roy award
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Rs Cr
*The above results are for MHC Network of hospitals and includes results for Max Super Specialty Hospital, Saket, unit of Devki Devi Foundation, Max Super Speciality Hospital, Patparganj, unit of Balaji Medical and Diagnostic Research Centre & Saket City Hospital unit of Gujarmal Modi Hospital & Research Centre; ^ on the basis of net revenue
Dec-16 Dec-15 Mar-16 Mar-15
a) Financial Performance Revenue (Gross) 1,939 1,581 23% 2,181 1,744 25% Revenue (Net) 1,850 1,523 21% 2,098 1,688 24% Direct Costs Material Cost 466 410 14% 558 468 19% Clincian Payout 149 123 21% 169 137 23% Contribution 1,235 990 25% 1,372 1,083 27% Contribution Margin^ 66.8% 65.0% 177 bps 65.4% 64.1% 130 bps Indirect Costs Personnel Cost 611 491 24% 678 536 26% Other Indirect overheads 330 266 24% 364 292 25% HO Costs 91 81 13% 115 85 34% EBITDA 203 152 34% 215 170 26% EBITDA Margin^ 11.0% 10.0% 103 bps 10.2% 10.1% 10 bps Finance Cost 103 68 52% 100 85 17% Cash Profit 100 84 20% 115 86 35% Depreciation 92 76 20% 105 92 15% Profit /(loss) before tax 9 7 16% 10 (6) 264% b) Financial Position Net Worth 1,106 1,071 3% 1,071 749 43% Net Debt 1,091 1,048 4% 1,056 563 88% Tangible Fixed Assets - Gross Block 2,014 1,918 5% 1,944 1,421 37%
Key Business Drivers Nine months Ended Y-o-Y Growth Year Ended Y-o-Y Growth
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*The above results are for MHC Network of hospitals and includes results for Max Super Specialty Hospital, Saket, unit of Devki Devi Foundation, Max Super Speciality Hospital, Patparganj, unit of Balaji Medical and Diagnostic Research Centre & Saket City Hospital unit of Gujarmal Modi Hospital & Research Centre; ^ on the basis of net revenue
Dec-16 Dec-15 Mar-16 Mar-15
a) Patient Transactions (Nos in lacs) Inpatient Discharges 1.44 1.21 20% 1.64 1.32 24% Day care Procedures 0.36 0.23 58% 0.35 0.26 35% Outpatient Footfalls 48.56 40.23 21% 55.38 44.48 25% Total 50.37 41.67 21% 57.37 46.06 25% b) Average Inpatient Operational Beds 2,342 2,272 3% 2,279 1,680 36% c) Average Inpatient Occupancy 72.7% 71.7% 105 bps 71.1% 73.5%
d) Average Length of Stay (days) 3.24 3.21
3.26 3.42 5% e) Average Revenue/Occupied Bed Day (Rs) 41,370 40,805 1% 40,902 38,594 6% f) Other Operational Data Physicians 2,677 2,643 1% 2,858 2,224 29% Employees 8,467 7,331 15% 8,159 6,373 28% Customer Base (in lacs) 34.2 28.3 21% 29.7 24.7 21%
Key Business Drivers Nine months Ended Y-o-Y Growth Year Ended Y-o-Y Growth
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*The above results are for MHC Network (Saket West, Panchsheel, Gurgaon, Noida, Pitampura) and includes results for Max Super Specialty Hospital, Saket, unit of Devki Devi Foundation and Max Super Speciality Hospital, Patparganj, unit of Balaji Medical and Diagnostic Research Centre ^ The above results are for Shalimar Bagh, Mohali, Dehradun, Bathinda, Vaishali & Saket City hospital unit of Gujarmal Modi Hospital & Research Centre
Unit Dec-16 Dec-15 Mar-16 Mar-15
Mature Hospitals* a) Financial Performance Revenue(Net)
1,068 1,013 5% 1,358 1,235 10% EBITDA
147 139 6% 190 166 14% EBITDA Margin % 13.8% 13.7% 7 bps 14.0% 13.4% 60 bps b) Average Inpatient Operational Beds No. 1,117 1,095 2% 1,095 1,084 1% c) Average Inpatient Occupancy % 75.1% 75.2%
74.8% 75.5% 220 bps d) Average Revenue/Occupied Bed Day Rs. 48,467 46,316 5% 47,010 42,481 11% e) Return on Capital Employed (Annualised) % 19.2% 16.8% 239 bps 17.3% 16.0% 130 bps New Hospitals^ a) Financial Performance Revenue(Net) 765 500 53% 727 449 62% EBITDA
57 17 3.4x 31 7 4x EBITDA Margin % 7.5% 3.4% 409 bps 4.2% 1.5% 270 bps b) Average Inpatient Operational Beds No. 1,225 1,177 4% 1,184 596 99% c) Average Inpatient Occupancy % 70.5% 67.2% 337 bps 66.9% 69.8% (297 bps) d) Avg. Revenue/Occupied Bed Day Rs. 33,800 32,399 4% 32,474 30,058 8% e) Return on Capital Employed (Annualised) % 1.1%
407 bps
330 bps
Key Business Drivers Nine months Ended Y-o-Y Growth Year Ended Y-o-Y Growth
Rajesh Sud
Chairman & Director
Rahul Khosla
Co-Vice Chairman & Director
Ashish Mehrotra
MD & CEO
Mohit Talwar
Director
Finance and Investment Banking.
extensive banking experience with exposure to consumer, commercial and private client
Director of Max India group. He is a seasoned business leader with 30 years of experience in India & globally.
Managing Director of Max Life Insurance, one of the first three private life insurers to start operations in 2001
K Narasimha Murthy
Director
Profession of Cost & Management Accountancy in
development of Cost & MIS for more than 150 companies.
Joy Linton
Director
has over 25 years’ experience in financial and strategic roles in Australia and the UK.
David Fletcher
Co-Vice Chairman & Director
Chief Internal Auditor in March 2014 and has been Managing Director of Bupa International Development Markets (IDM) since Sep 2014
Pradeep Pant
Director
experienced senior business leader, now involved in business consulting and education
John Howard Lorimer
Director
Non-Executive Director in July
Bupa's Audit Committee and a member of Bupa's Risk Committee and UK Regulated Entities Board.
Marielle Theron
Director
Erlen Street Corporation, Switzerland, a company that specialises in strategic investment and management consulting solutions
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Ashish Mehrotra
MD & CEO
Rahul Ahuja
Chief Financial Officer
Anurag Gupta
Head – Agency
Aseem Gupta
Head – Portfolio Management & Affinity Channels
distribution and has worked across channels - Agency, Banca, Special markets & Direct Sales
Max Life, where he has held a number of senior roles across distribution and product management over a decade
expertise built over 19 years mainly in corporate banking, financial services and telecom
extensive banking experience with exposure to consumer, commercial and private client banking
Polly Doak
CSO & Director of Products
in finance, strategy, acquisitions, program management and business transformation.
Priya Gilbile
Head – Health Risk Management
professional with more than 16 years of experience in healthcare & health insurance industry.
Anika Agarwal
Head – Marketing & Direct Sales
commerce verticals at Max Bupa & responsible for brand planning, digital media, communications, consumer insights, direct sales and E-commerce
Joydeep Saha
Appointed Actuary
experience in Health & Property & Casualty Insurance. He has earlier worked with other insurers like Religare, L&T General, Raheja QBE & Iffco-Tokio.
Atul Bhandari
Head – Banca and Alliances
product/process management & sales/distribution, he joined us from CITIBANK, prior to which he worked in Standard Charted bank.
Vikas Gujral
Chief Operating Officer
Vikas joins us from joins us from Max Life Insurance, prior to Max Life, he has worked with Bharti Airtel and GE Capital.
A Achar
Chief Human Resources Officer
IT / ITES and health insurance. He joined us from Apollo Munich Health Insurance
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^ Higher Net Earned premium and PBT due to change in Unearned premium accounting from 1/365 method to 50% of net written premium
*Net Loss before one off items Rs 66 Cr **Adjusted for abnormal past claims for the previous year amounting to Rs. 7 Cr., settled in the current year
Rs Cr
Dec-16 Dec-15 Mar-16 Mar-15
a) Gross written premium income First year premium 142 123 15% 180 145 24% Renewal premium 259 202 28% 296 228 30% Total 401 325 23% 476 373 28% b) Net Earned Premium^ 381 286 33% 393 315 24% c) Net Loss^ 9 (48) 118% (68)* (93) 30% d) Claim Ratio(B2C Segment, normalized) 56% 59% 5% 56%** 50%
e) Avg. premium realization per life (B2C) 6,977 6,794 3% 6,800 6,364 7% f) Conservation ratio (B2C Segment) 85% 82% 4% 83% 81% 200 bps g) Lives In force in millions (including RSBY) 2.3 2.0 13% 2.1 1.8 11% h) Number of agents 15,821 11,975 32% 12,581 8,909 41% i) Paid up Capital 926 876 6% 898 791 14%
Key Business Drivers Nine months Ended
Y-o-Y Growth
Year Ended
Y-o-Y Growth
MAX INDIA LTD.
Max House, Okhla, New Delhi – 110 020 Phone: +91 11 26933601-10 Fax: +91 11 26933619 Website: www.maxindia.com