June 2018 PT Medikaloka Hermina Tbk Q1 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
Leading National Hospital Chain, with Robust Growth Trajectory One of the Largest Groups in a Highly Fragmented Indonesian Hospital Market 1 Top 5 Private Operators by Number of Hospitals 3.337 2.780 2.700 31 28 19 889 # of Hospitals # of Operational Beds 1.500 10 9 Other Selected Top Players, Beyond the Top 5 Name No. of Hospitals No. of Beds Type of Hospital Permata Group 7 699 Multi-Specialty Sari Asih 6 858 Multi-Specialty Ramsey 3 629 Multi-Specialty Pondok 3 455 Multi-Specialty 2 Permata Bunda Columbia Asia 3 416 Multi-Specialty Mayapada 2 485 Multi-Specialty Total Patient Consistent Growth Year over Year FY15-FY17 CAGR Inpatient Days: 26% / Outpatient: 27% 2x Growth - 14 New Hospitals in 7 Years 28 395K 2.8M 523K 3.6M 627K 4.5M 14 2 1 4 1 2 4 FY2015 FY2016 FY2017 2010 2011 2012 2013 2014 2015 2016 2017 Dec 2017 Source: Frost & Sullivan. 1. As of December 31, 2017. 2. Includes Kasih Group (521 beds, 7 hospitals), which Mitra Keluarga acquired in October, 2017. 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 23 hospitals 29 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 23 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 May 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 1 new hospital in Samarinda in April 2018 Evolution on Number of Hospitals # of hospitals 2017 29 18 Cities, 2016 10 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 3,192 5
Our Nationwide Hospital Network Our Nationwide Hospital Network Type B Hospitals Type C Hospitals Jatinegara Kemayoran Bekasi Pasteur Pandanaran Malang Sukabumi Tangerang Grand Wisata Arcamanik Galaxy Palembang Ciputat Cileungsi Serpong Banyumanik Solo Ciruas Yogya Bitung Makassar Balikpapan Medan Podomoro Purwokerto Samarinda Depok Daan Mogot Bogor Total Hospitals 29 Hospitals across 18 Cities in 6
2. Financial Update
Robust Growth in Revenue and Stable Margin Profile Total Revenue (IDR billions) Gross Profit & Gross Margin (IDR billions, %) 629,2 Growth: 18.6% 746,5 450,0 400,0 350,0 300,0 250,0 41,8% 41,6% 310,2 263,2 50,0% 40,0% 30,0% 20,0% 10,0% 1Q17 1Q18 200,0 1Q17 1Q18 0,0% Gross Profit Gross Margin EBITDA & EBITDA Margin 1 (IDR billions, %) PAT & PATMI (IDR billions) 180,0 130,0 21,4% 21,2% 158,3 134,7 20,0% 15,0% 10,0% 5,0% 173,6 97,5 54,9 39,8 80,0 1Q17 EBITDA 1Q18 EBITDA Margin 0,0% 2017 1Q18 PAT PATMI 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 (IDR1.5bn), which is recognized as part of general adminitrative 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 66,2 361,6 319,7 205,4 2015 2016 2017 1Q18 76,6 Inventory Days (Days) 11,8 13,0 11,0 9,2 2015 2016 2017 1Q18 2015 2016 2017 1Q18 Cash Conversion Cycle Days (Days) Trade Payable Days (Days) 42,3 38,8 42,9 51,2 11,1 21,7 24,2 3,2 2015 2016 2017 1Q18 2015 2016 2017 1Q18 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: 30.3% 140K 182K Non- Non- JKN; JKN; JKN; 34% 49% 51% JKN; 66% 1Q17 1Q18 1Q17 1Q18 Outpatient Visit Outpatient Visits by Payor Type Growth: 26.3% 1,1Mn 1,3Mn Non- JKN; 60% JKN; 40% Non- JKN; 52% JKN; 48% 1Q17 1Q18 1Q17 1Q18 10
EBITDA Calculation Methodology (IDR billions) 1Q17 1Q18 YoY Growth Revenue 629.2 746.5 18.6% EBIT 100.5 110.5 10.0% % Margin 16.0% 14.8% Depreciation and Amortization (D&A) 32.0 40.2 Adjustment for back non-cash items 1 3.4 4.8 Post-employment benefits 2.1 3.3 Allowance for impairment losses 1.4 1.4 Adjustment for non-operational income / (expense) (1.2) 2.7 Disposal of fixed asset 0.7 2.3 Other income (expense) 2 (1.9) (1.5) One-off incentive to employees 0.0 1.9 EBITDA (EBIT + D&A + Adjustments) 134.7 158.3 17.5% % Margin 21.4% 21.2% 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 2500 Total Debt / Net Debt / Leverage Ratio (IDR billions, x) 2,2 The increase of debt in 2017 and 1Q18 are mainly 2,5 attributable to purchase of minority interests and to finance working capital (as part of corporate restructuring i.e. share buyback) 1,9 2 2000 Maturity Profile (Mar 2018) 1500 1.422,0 1.626,5 1.375,0 1,5 1000 500 354,1 0,7 235,3 607,7 0,8 404,5 1.099,6 1 0,5 1-5 yr maturity 41% IDR 1,626.5 bn <1 yr maturity 59% 0 2015 2016 2017 1Q18 Total Debt Net Debt Net Debt/EBITDA 0 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
3. Hospital Development
PROGRESS PLAN PROGRESS PLAN Hospitals Under Development Hermina Jakabaring Ground Breaking Piled & Structure Finishing Architecture Opening Aug 2017 Sep-Dec 2017 Jan-Jun 2018 3Q18 100% 100% 88% Hermina Padang Ground Breaking Piled & Structure Finishing Architecture Opening Oct 2017 Nov 2017 - Jun 2018 Jul-Sep 2018 4Q18 100% 85% 14
PT Medikaloka Hermina Tbk www.herminahospitals.com