October 2018 PT Medikaloka Hermina Tbk 9M 2018 Presentation
Hermina Our Team #1 Indonesia Original Brand in Maternity Hospital (2016) - SWA dr. Hasmoro President Director & CEO 34 Years of Experience Yulisar Khiat Co-Founder and MD, Operational and General Affairs 34 Years of Experience dr. Binsar Parasian Simorangkir Co-Founder and MD, Medical and Compliance 32 Years of Experience Hospital Group with the Most Accredited Hospitals (2015) - KARS Aristo Setiawidjaja MD, Finance and Strategic Development 15 Years of Experience 1
1. Company Overview
Introduction to Hermina Hermina is one of the largest hospital groups in Indonesia with 33 years of experience in women and children care and a differentiated business model. Hermina is uniquely positioned to take advantage of low healthcare penetration and universal health coverage roll-out through the Jaminan Kesehatan Nasional ("JKN") scheme in Indonesia. Unique Business Model One of the Largest Private Hospital Groups - 30 hospitals and 3,294 beds as of September 30, 2018 - General hospital providing a wide range service offerings, with a strong heritage in women and children care Doctor Partnership Model - Top specialist doctors own a minority stake at each hospital - (i) Helps to attract and retain quality doctors, and (ii) supports growth plan going forward Patient Segment Positioning Fast growing middle class and rising affluence - Strength in women and children care provides a good entry point for Indonesians of productive age Early Mover Advantage in JKN Visits driven by JKN, as well as private pay, insurance, and corporate patients Proven Track Record Successfully developing new hospitals and optimizing capacity while maintaining profitability Alignment of Interest Doctor Partners + selfowned properties 1 + fully committed founders and credible institutional investors Key Statistics (FY17) 4.5M+ Annual Out-Patient Visits ~2,700 Doctors and Specialists ~35,000 240K+ Annual In-Patient Admissions Annual Babies Delivered 100% JKN Participation Across Hospitals 1. Except for RS Hermina Pandanaran whose land is owned by a non-profit organization 3
Service Offering Overview Hermina hospitals are a network of general hospitals with a significant strength and wide offering in women and children care Type C 24 hospitals 30 hospitals 1 Service Offerings Obstetrics & Gynaecology Service of Excellence Feto-maternal care Infertility Type B 6 hospitals 6 Type B general hospitals with fully advanced center of excellence & subspecialist care 24 Type C full service general hospitals with several sub-specialist care in Women and Children Care 2 Market Leader in Number of Sub-specialty Service Offerings 2 Specializes in women s health including Oncology and Urogynaecology Pediatrics Children's health including tertiary care such as Gastroenterology and Thalassemia Service of Excellence Perinatology Neonatal Intensive Care Units (NICU) Pediatric Intensive Care Units (PICU) Internal Medicine Diagnostics / Imaging Hermina Hospital Facility Pharmacy Accident & Emergency Haemodialysis, CAPD, Gastrointestinal Endoscopy, Geriatrics Clinic, Oncology - Chemotherapy General X-ray & Ultrasound, Mammography, BMD, MRI, CT Scan, C-Arm, ENT Endoscopy, Pathology-Clinic Radiology Outpatient Clinics & Homecare Laboratory Inpatient rooms Surgical Procedures Cardiovascular Orthopaedics and Traumatology, Oncology Chemotherapy, Neuro surgery, Plastic surgery, Vascular surgery, Digestive (Laparoscopy) and Urology (ESWL & TURP), Phacoemulsification A variety of health screening and treatment such as Cath Lab Medical Rehabilitation Service of Excellence Growth and Development Center which includes Children Bobath to treat Cerebral Palsy and care for Neuromuscular diseases, and Adult Bobath to treat Stroke and Brain Injury Dental Specialists Service of Excellence Orthodontics, Conservative Dentistry, Pediatric Dentistry, Prosthodontics, Periodontics and Oral Surgery Other Specialties Ophthalmology Acupuncture Pulmonology Neurology Psychiatry Dermatology & Venereology Pathology-Anatomic Psychology Otorhinolaryngology Anaesthesiology Radiology (ENT) 1. As of October 31, 2018 2. Based on Frost & Sullivan s analysis that within the top private multi-specialty hospital chains, Hermina has the broadest offerings in women & children segment 4
Corporate History Company Milestones Established the first maternity hospital in Jatinegara Made the first acquisition of a hospital (Podomoro) Changed the non-profit organization status into a corporation named Medikaloka Hermina (MH) Established 3 new hospitals and acquired 2 hospitals 2005: Pandanaran became the first Hermina Hospital to receive general hospital license 2017: Established 4 new hospitals Company restructured ownership to consolidate 28 hospitals under MH 1985 1989 1995 1997 1999 2000 02 2003 08 2009 14 2015 16 2017 2018 Jatinegara was upgraded to Women & Children hospital Established the third hospital in Bekasi Established hospitals in Depok, Daan Mogot, and Bogor Established 7 new hospitals and acquired 3 hospitals 2011: Opened first hospital outside Java in Palembang Established 2 new hospitals and acquired 1 hospital 2016: Hermina Tower was opened Opened 2 new hospitals (Samarinda & Jakabaring) Oct 2018: opened and operated Provita Hospital in Jayapura Evolution on Number of Hospitals # of hospitals 2017 30+1 19 Cities, 2016 11 Provinces 1985 2014 28 1997 2002 2008 1 24 # of beds 25 3 150 6 441 11 786 21 1,611 2,115 Now 2,780 3,294 5
Our Nationwide Hospital Network Our Nationwide Hospital Network Type B Hospitals Type C Hospitals Jatinegara Kemayoran Bekasi Pasteur Pandanaran Tangkubanprahu Sukabumi Tangerang Grand Wisata Arcamanik Galaxy Palembang Ciputat Mekarsari Serpong Banyumanik Solo Ciruas Yogya Bitung Makassar Balikpapan Medan Podomoro Purwokerto Samarinda Jakabaring Depok Daan Mogot Bogor Total Hospitals 30 Hospitals 1 across 18 Cities in 1. Excluding Provita Hospital in Jayapura which is owned by a local Papua organization but managed and operated by Hermina 6
2. Financial Update
Robust Growth in Revenue and Stable Margin Profile Total Revenue (IDR billions) Growth: 16.5% Gross Profit & Gross Margin (IDR billions, %) 1,963.7 2,288.3 1,200.0 43.2% 43.4% 992.7 847.5 50.0% 40.0% 30.0% 700.0 20.0% 10.0% 9M17 9M18 200.0 9M17 9M18 0.0% Gross Profit Gross Margin EBITDA & EBITDA Margin 1 (IDR billions, %) PAT & PATMI (IDR billions) 680.0 480.0 280.0 21.1% 20.7% 414.6 474.4 25.0% 200.0 20.0% 150.0 15.0% 100.0 10.0% 5.0% 50.0 147.7 85.6 162.0 110.2 80.0 9M17 EBITDA 9M18 EBITDA Margin 0.0% 0.0 9M17 PAT PATMI 9M18 1. EBITDA is calculated by operating income + depreciation and amortization + adjustment for non-operating items (disposal of fixed asset, impairment of fixed asset, and other income (expense)) and adjustment for non-cash items (allowance for impairment of account receivable and post-employment benefit expense) + professional expenses related to IPO (IDR1.9bn), which is recognized as part of general administrative expense 8
Key Balance Sheet Items Working Capital Turnover Days Trade Receivable Days 1 (Days) Net Working Capital (IDR billions) 33.7 36.8 53.6 66.8 361.6 481.0 76.6 205.4 Inventory Days (Days) 11.8 13.0 11.0 9.8 Cash Conversion Cycle Days (Days) Trade Payable Days (Days) 37.8 42.3 38.8 42.9 38.7 3.2 11.1 21.7 1. Trade receivable days in 2016 and 2017 are calculated based on average balance of trade receivables 9
Strong Growth in Patient Visits Inpatient Days Inpatient Admissions by Payor Type Growth: 25.9% 446K 561K Non- Non- JKN, JKN, JKN, 33% 43% 57% JKN, 67% 9M17 9M18 9M17 9M18 Outpatient Visit Growth: 19.7% Outpatient Visits by Payor Type 3.9M 3.2M Non- JKN, 56% JKN, 44% Non- JKN, 52% JKN, 48% 9M17 9M18 9M17 9M18 10
EBITDA Calculation Methodology (IDR billions) 9M17 9M18 Revenue 1,963.7 2,288.3 EBIT 289.5 304.5 % Margin 14.7% 13.3% Depreciation and Amortization (D&A) 113.1 142.4 Adjustment for back non-cash items 1 17.7 22.1 Post-employment benefits 16.7 20.0 Allowance for impairment losses 1.0 2.1 Adjustment for non-operational income / (expense) (5.7) 5.4 Loss disposal of fixed asset 0.6 3.5 Gain disposal of fixed asset - (0.7) Other income (expense) 2 (6.3) (0.1) IPO related expenses - 1.9 EBITDA (EBIT + D&A + Adjustments) 414.6 474.4 % Margin 21.1% 20.7% 1. Methodology is consistent with the EBITDA calculation methodology of the peer group of Siloam and Mitra Keluarga 2. Other income and expenses include items that are non-operational in nature such as sponsorship income, seminar income, patient overpayment, CSR and charitable donation expenses, and other miscellaneous income and expenses 11
Debt and Leverage Ratio Total Debt / Net Debt / Leverage Ratio (IDR billions, x) 1.9 2 Maturity Profile (September 2018) 2500 1.5 <1 yr maturity 19% 2000 1500 0.7 0.8 1,422.0 1,099.6 0.6 1 0.5 IDR 745.9 bn 1000 500 354.1 235.3 607.7 404.5 745.9 398.9 0-0.5 1-5 yr maturity 81% 0 Total Debt Net Debt Net Debt/EBITDA -1 Note: Debt is calculated by short-term bank loans + current portion of long-term liabilities + medium term notes + long-term liabilities net of current portion: bank loans + mandatory convertible notes 12
Cash Flow and Capital Expenditure Cash Flow (IDR billions) Cash and Cash Equivalents (IDR billions) 119.3 322.4 347.0 1,143.9 84.4 176.5 170.2 331.4 393.6 437.0 24.5 460.3 210.1 118.8 203.2 (526.7) (485.7) (25.2) (1,461.7) (645.9) Capital Expenditure 1 (IDR billions, %) 30.9% 23.5% 26.7% 26.2% 528.9 525.0 714.9 599.6 Cash Flow from Operations Cash Flow from Financing Activities Cash Flow from Investing Activities Capex % of Revenue 1. Includes acquisition of fixed assets + acquisition of other assets + advance purchase of fixed assets 13
3. Hospital Development
PROGRESS PLAN PROGRESS PLAN Hospitals Under Development Hermina Padang Ground Breaking Piled & Structure Finishing Architecture Opening Oct 2017 Nov 2017 - Jul 2018 Jul-Oct 2018 4Q18 100% 100% 90% Hermina Kendari Ground Breaking Piled & Structure Finishing Architecture Opening Oct 18 Sept 2018-Mar 2019 Apr-Jun 2019 3Q19 100% 10% 15
PT Medikaloka Hermina Tbk www.herminahospitals.com