Strictly Private and Confidential - Apollo Hospitals · PDF fileStrictly Private and...

I t P t tiInvestor PresentationAugust 2012

Strictly Private and Confidential

DisclaimerThis presentation has been prepared by Apollo Hospitals Enterprise Limited (“AHEL” or the “Company”) solely for your information and for your use and may not be taken away, distributed, reproduced, or redistributed or passed on, directly or indirectly, to any other person (whether within or outside your organization or firm) or published in whole or in part, for any purpose by recipients directly or indirectly to any other person. By accessing this presentation, you are agreeing to be bound by the trailing restrictions and to maintain absolute confidentiality regarding the information disclosed in these materials.

This presentation does not constitute an offer or invitation to purchase or subscribe for any securities of the Company by any person in any p p y p y y y p yjurisdiction, including India and the United States. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. Securities may not be offered or sold in the United States absent registration or an exemption from registration. This presentation is not intended to be a prospectus (as defined under the Companies Act, 1956) or offer document under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended.

No representation or warranty express or implied is made as to and no reliance should be placed on the fairness accuracy completeness orNo representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. Certain statements made in this presentation may not be based on historical information or facts and may be "forward looking statements" based on the currently held beliefs and assumptions of the management of the Company, which are expressed in good faith and in their opinion reasonable, including those relating to the Company’s general business plans and strategy, its future financial condition and growth prospects and future developments in its industry and its competitive and regulatory environment.

This presentation may contain statements that constitute forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance or achievements of the Company or industry results to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements, including future changes or developments in the Company’s business, its competitive environment and political, economic, legal and social conditions. Further, past performance is not necessarily indicative of future results. Given these risks, uncertainties and other factors, viewers , p p y , ,of this presentation are cautioned not to place undue reliance on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements to reflect future events or developments.

This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. The Company may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such change or changes This presentation may not be copied or disseminated in any manner

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notify any person of such change or changes. This presentation may not be copied or disseminated in any manner.

Key highlights

Leading Private Sector Healthcare Services Provider in India

Attractive Industry Opportunity

Clinical Excellence and Strong Brand Value

Strong Operating and Financial Track Record

Experienced Management Team

Well Planned Strategy to Deliver the Next Phase of Growth

2

Experienced Management Team

Business snapshot

Leading private sector healthcare services provider in India

Business Overview Consolidated Financials(1) (Rs. mn)

Leading private sector healthcare services provider in India

• Promoted by Dr. Prathap C. Reddy (Padma Vibhushan, 2010) FY09 FY10 FY11 FY12Gross Revenue 16 142 20 265 26 054 31 475• Key Businesses Includes :

– Healthcare Services: Operating one of the largest hospital networks in Asia with 5,908 owned and 2,038 managed beds across 36 owned and 13 managed hospitals as on June 30, 2012 Includes tertiary, super specialty and secondary care hospitals

Gross Revenue 16,142 20,265 26,054 31,475YoY Growth 32.7% 25.5% 28.6% 20.8%

EBITDA 2,274 3,013 4,190 5,131EBITDA Margin 14.1% 14.9% 16.1% 16.3%

Profit After Tax (PAT) 1,025 1,376 1,839 2,194

7 hospitals with Joint Commission International (JCI) accreditation Team of 5,034 doctors including employed and “fee for service” doctors,

8,075 nurses and 2,802 paramedical personnel as on June 30, 2012 – Standalone Pharmacies: Large network of pharmacies in India with 1,357

outlets across 20 states as of June 30, 2012

( )PAT Margin 6.3% 6.8% 7.1% 7.0%

Net Worth 14,954 16,776 19,238 25,194Total Loans 6,706 9,132 9,585 8,183Cash and Cash Equivalents 2,930 3,117 2,664 3,588

Cardiology26%

Standalone Pharmacy

Others3%

Segment Performance (Consolidated) (FY12)

Gross Revenue Specialty Mix

– Other Businesses:• Comprises of Clinics, Health Insurance (JV (10.45%) with European

Insurer Munich Health Holding AG), healthcare project and consultancy services, healthcare BPO, health education, skill development programs, telemedicine and research

• A Typical Day at Apollo consists of approximately 800 admissions 7 300

Oncology8%

Neurology12%

Orthopaedic

Transplants3%

General Surgery

4%

Others35%

Healthcare services

a acy27%• A Typical Day at Apollo consists of approximately 800 admissions, 7,300

outpatient volumes, 200 critical care cases, 140 key cardiac procedures, 60 neurosurgeries, 600 dialyses and 40,000 laboratory tests

• Shareholding(2): Promoters (32.8%), FIIs & FCBs (52.6%), MF/FI/IC (2.4%), Others (12.2%)

• Market capitalization of Rs 87 000 mn(3) Debt of 7 979 mn and Debt to Equity

3

Orthopaedic12%70%

(1) All financial are for fiscal year (FY) ended March 31.(2) As on 30th June 2012(3) As on 20th August 2012Source: Company audited financials and Q4FY12 Earnings Update.

• Market capitalization of Rs. 87,000 mn(3), Debt of 7,979 mn and Debt to Equity ratio of 0.24x

EvolutionBusiness Evolution

Imperial Hospital, Bangalore Plan to add 3,140 beds by FY15

Indraprastha Apollo Hospitals Delhi

2011–2015

Apollo Hospital, Chennai

2005–2010

Apollo Gleneagles, Kolkata

2001–20041989 –20001983–1988

Business Evolution

2 REACH Hospitals, and hospitals in Bhubaneswar, Secunderabad, Mauritius, Lavasa, Dhaka, Kakinada Apollo Munich Health InsuranceApollo Health Street

beds by FY15Hospitals, DelhiApollo Specialty Hospital, Chennai

Apollo Health City, Hyderabad

KolkataHospitals in Mysore, Ahmedabad, BilaspurApollo Standalone Pharmacy

Apollo Health Street

Pillars of success

Technological Excellence

Care, Compassion

and Commitment

Cost Benefit

7 JCI accredited hospitals Continue to bring world class Follows value of TLC ‘Tender Committed to world class care at

Clinical Excellence

7 JCI accredited hospitals 5 NABH accredited hospitals Outcomes benchmarked with world-

class hospitals globally Strong, long term relationship with

Doctors and medical professionals

Continue to bring world-class technology to our hospitals - 320 Slice CT scanner, G4 CyberKnife ® Robotic Radiosurgery system, Novalis TxTM Radiotherapy and Radiosurgery system, 64 slice PET-CT scan system, Digital mammography with tomosysnthesis

Follows value of TLC - Tender Loving Care’ for our patients

Commitment to our employees Commitment to medical education

and research

Committed to world-class care at costs significantly lower than international benchmarks

Continuous improvement in asset utilization and operating efficiencies

4

mammography with tomosysnthesis 3D system

Pan India presenceApollo is the leading player in the Indian hospitals segment by geographic presence as well as

Fortis (1)(2)

business span and breadth of services offered.

Leading Hospital Players in India Details of Beds under operationTotal Capacity Operational Beds No. of Hospitals

Category Wise

(8)

# of Beds: 6,881# of Hospitals: 51

Pan

Indi

a


CARE Hospitals

Fortis Hospitals

(1)

(3)

Owned 5,908 5,418 36Managed 2,038 N.A 13Grand Total 7,946 N.A 49Cluster Wise (Owned)Chennai 1,205 1,134 9Hyderabad 967 930 7Kolkata 510 510 2


hic

Pres

ence

e nM

ultip

le

Reg

ions

Manipal Hospitals (4)

Delhi 801 647 2Bangalore 297 268 1Ahmedabad 320 250 2Other India 1,608 1,479 12International 200 200 1Grand Total 5,908 5,418 36Maturity Wise (Owned)

# of Beds: 1,100


# of Beds: 1,027

Geo

grap

h

ngle

ta

teSi

ngl e

Reg

io

Sterling Hospitals

MAX Healthcare(6)

(5)

2 875 2 388

8,717 8,2767,984Bed Growth(7)

O d B d CAGR (FY05 12) 10 1%

>5 years 3,959 3,795 233–5 years 1,011 884 71–3 years 938 739 6Grand Total 5,908 5,418 36

Source: (1) Company Earnings Release. Figures as of June 30, 2012.(2) Fortis corporate presentation as of September 2011. Excludes hospitals and beds as part of ‘Projects’.

# of Hospitals: 8,

# of Hospitals: 6

Business Span and Breadth of Services

Narrow

Sin St

Wide1,500 3,000

5,376 5,842 5,8881,000

2,608 2,875 2,388

300 750 1,500

4,000

FY90 FY95 FY00 FY05 FY10 FY11 FY12Owned Managed

Owned Beds CAGR (FY05-12) : 10.1%

5

( ) p p p p p j(3) Care Hospitals website. Information retrieved on June 22, 2012.(4) Manipal Hospitals website. Information retrieved on June 22, 2012.(5) Sterling Hospitals website. Information retrieved on June 23, 2011.(6) Max India investor presentation as of August 2011, publicly available on Max India Ltd.’s website.(7) The number of beds for FY90, FY95, FY00 and FY05 are approximate figures.Note: Bubble size denotes no. of beds (owned + managed). The Company has not independently verified the data presented on this slide, except for data relating to the Company.

Owned Managed

(8) Beds as on 30th June 2012

Clinical excellence and quality healthcare servicesFocus on Excellence Strong Brand Value

JCI Accreditation for 7 hospitals- Bangalore, Chennai, Delhi, Dhaka, Hyderabad, Kolkata and Ludhiana

Best Multi-specialty Hospital In India (2011):

Strong, long standing relationship with doctors and medical professionals

Focus on Key Specializations & Centers of Excellence (CONECT) (1)

with an objective to set benchmark standards in clinical outcomes– Aim to gain significant market share in specialized acute and Best Multi-specialty Hospital In India (2011):

Apollo Hospitals Chennai.

“India’s Most Preferred Hospital” - Viewer’s

Ahmedabad, Delhi, Kolkata & Hyderabad hospitals ranked No. 1 Multi specialty hospital in their cities

– Aim to gain significant market share in specialized acute and tertiary healthcare services

– Benchmarking clinical outcomes against the world’s best centers

Implemented clinical governance tools such as Apollo Clinical Excellence 25 (“ACE @ 25”) and RACE 25.

D di t d t t it t h l i l i ti d di l choice award (2010)

Dr. Prathap C Reddy, Founder and Chairman, was awarded the “ Lifetime Achievement Award” at the FICCI healthcare Excellence Awards 2011. FICCI also conferred the Best Private Sector

Dedicated team to monitor technological innovation and medical advances to keep abreast of local innovations in global healthcare

Technological Excellence

Hospital award to Apollo Hospitals

Apollo Health City Hyderabad was recognized as the “ Best Medical Tourism Facility for 2009-2010 by the Ministry of Tourism – Government of I di

First to launch G4 Cyberknife® Robotic Radiosurgery System in India

First to launch 320 slice computed tomography (“CT”) scanner in India

First to install 64 slice positron emission tomography-computed tomography (“PET-CT”) scan system in India

Installed Novalis Tx™ Radiotherapy and Radiosurgery system at India Installed Novalis Tx Radiotherapy and Radiosurgery system at Hyderabad, New Delhi and Kolkata

Installed South Asia's first-of-its-kind, full-field digital mammography with tomosynthesis (3D) system

Da Vinci Si’ - the most advanced form of minimally-invasive robotic surgery that ensures greater precision and accuracy and leads to

Dun & Bradstreet has ranked Apollo Hospitals 231st as per income and 227th as per Net profits under India’s Top 500 Companies 2011.

6(1) Cardiology, Orthopedics, Neurosciences, Emergency, Cancer, Transplant.

faster recovery and reduced hospital stay.

Attractive industry opportunityDemand for healthcare services in India is expected to rise owing to favorable demographics. Private sector

Spending driven by out of pocket componentIndia is an under-penetrated healthcare market

Healthcare Expenditure (as % of GDP)(1) (2009) Healthcare Expenditure Composition(1) (%) (2009)

Per Capita expenditure

players are well-positioned to leverage this opportunity given low contribution of government spending.

59%

21%16%

30%

60%

10% 9% 9%

5% 4%

18%398,000 171,900 46,050 17,350 6,200(Rs.)

49,500

5%3% 6%

GovernmentSpending

Out of PocketExpense

Private PrepaidExpense

Others

Global India

4%

US UK Global Brazil China India

Beds per 10,000 People (2009)(1)

33 30 30

42

India lags behind other developed and emerging economies in healthcare infrastructure

Investment Requirements: Bed Density and Funds(2)

30

6 4

Large investments are required (Rs. 6.4 trillion) by FY13 to achieve global bed density benchmarks to meet the growing demand for healthcare services

24

9

China UK US Global Brazil India

9

156.4

1.7

2008 By 2013 By 2013

7

Source: (1) WHO – World Health Statistics 2012.(2) CRISIL Research hospitals Annual Review – November 2010.Exchange rate of 1 US$ = Rs. 50,

Approximate Bed Density Investment Requirement by 2013Beds / 10,000 people Rs. trillion

Attractive industry opportunity (cont’d)

In-patient market and incidence of lifestyle diseases are on the riseIn-patient market and incidence of lifestyle diseases are on the rise.

No of Hospitalized Cases (mn) and In-patient Market(1) (Rs. bn)

Increasing incidence of lifestyle diseases; estimated to contribute 48% of in-patient revenues by 2013E up from 13 8% in 2008

Patient volumes and spends are expected to grow rapidly, with the larger contribution coming from in-patients

In-patient / Out-patient Market Size(1) (Rs. bn)

In-patient Market sizeMarket size CAGR (2008-18)

48% of in patient revenues by 2013E, up from 13.8% in 2008

5.2

8.3

4 2

201 509 1,030 118 274 519 29 79 163

es

53% 61% 65%

In-patient CAGR (2008 - 18) – 14%Out-patient CAGR (2008 - 18) – 8%

with the larger contribution coming from in patients

1,690 2,977 4,95018% 16% 19%

2.92.0

1.2

3.12.3

4.23.4

Cardiac Oncology Diabetes2008 2013P 2018P

No.

of C

ase

(mm

)

47% 39% 35%

6 % 65%

2008 2013P 2018POut-patient In-patient

Increasing insurance premiums driven by increasing awareness of healthcare and rising income levels

Health Insurance Premiums(2) (Rs. bn) Medical Tourism (3)

115

Ailments (US$) US UK Thailand Singapore IndiaHeart Surgery 100,000 41,726 14,250 15,312 4,500Bone Marrow Transplant 250 000 292 470 62 500 150 000 30 000

Medical tourism is a burgeoning industry in India

2232

5166

83

115 Bone Marrow Transplant 250,000 292,470 62,500 150,000 30,000Liver Transplant 300,000 200,000 75,000 140,000 45,000Knee Replacement 48,000 50,109 8,000 25,000 6,000

India is competitive in healthcare costs as compared to the developed countries and other nations in Asia

By 2015, India likely to see 32 lakh medical tourists annually as

8

Source: (1) CRISIL Research hospitals Annual Review – August 2009.(2) IRDA Annual Report 2011.(3) Source: CRISIL Research. (4) Source: ASSOCHAM.

FY06 FY07 FY08 FY09 FY10 FY11compared to the current number of 8.5 lakh(4)

Robust financialsConsistent improvement in financial performance across hospitals (mature and new), as well as

Performance Highlights Total Consolidated Revenue (1) (Rs. mn)

Healthcare services: Improvement in operating t i

Strong growth in revenue across businesses driven by strong operating performance

across businesses (hospitals and standalone pharmacies).

3 3224,817

6,5838,575

12,16416,142

20,265

26,05431,475

metrics

– Strong continued revenue growth in mature clusters

– New Hospitals(3) – driving substantial revenue growth (77% in-patient and 65% out-patient) – through quick ramp up

p g p

Healthcare Services CAGR (FY08 – 12): 22%

Standalone Pharmacies CAGR (FY08 – 12): 44%

EBITDA Margin (%) and Net Profit (2) Margin (%)

10,058 12,673 15,193 19,081 22,2221,9963,322

FY08 FY09 FY10 FY11 FY12Healthcare Services Standalone Pharmacies Others

ramp up

Standalone Pharmacies: Revenue growth and margin improvement

– Standalone pharmacies reported a positive EBITDA for each of the last two years FY11 and FY12

15% 14% 15% 16% 16%

EBITDA Margin (%) and Net Profit (2) Margin (%)

EBITDA margin has consistently improved while Net Profit margin has stayed stable

– 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

6% 7% 7% 7% 6%

FY08 FY09 FY10 FY11 FY12(1) Revenue is net of doctor fees.(2) Net profit after minority interest and associates.

better ramp up and lower losses

9

EBITDA Margin Net Profit Margin( ) p y(3) New Hospitals include Bhubaneswar, Karaikudi, Karur and Karim NagarSource: Company audited financials.

Robust financials (cont’d)Apollo is one of the few companies in India across capital-intensive industries to generate healthy

Return on Capital Employed#—Healthcare Services (%)*Rapid Improvement in ROCE

17%19%

18%

1 2

returns on capital employed in the business.

14%15%

ProfitabilityEfficiency

(Asset Turnover)

ROCE = X1 2

Efficient use of capital1

13% 13%

Return on Capital Employed#—Consolidated (%)

FY08 FY09 FY10 FY11 FY12

Lower investment per bed

Strong project execution capabilities

Quick ramp up of new hospitals—increasing patient flow

9% 10% 10% Higher revenue and profitability

Reduced ALOS

Increasing ARPOB

2


Improving case mix

Strong financial position – Apollo has a healthy Balance Sheet with a Debt/ Equity ratio of 0.33x as on March 31, 2012

Note: *Healthcare services includes owned hospitals, hospital-based pharmacies and consulting projects

10

Source: Company audited financials.

and services.#ROCE = EBIT / Capital Employed (excludes CWIP and investments in liquid mutual funds).

Strong operating metrics

Continuous improvement in key operating metrics is helping drive revenues and profitability

Continued in-patient volumes growth Consistent bed utilization

In-patient Admissions (’000) (1) Bed Occupancy Rate (2) (%) Operational Highlights

Occupancy rates remain high

Continuous improvement in key operating metrics is helping drive revenues and profitability.

190211

235265

281

75.0% 76.0%73.0%

71.2%73.0%

Occupancy rates remain high– Growth of in-patient volumes in line

with addition of beds– New hospitals are ramping

up quickly

Average length of stay (ALOS) has

3,613 3,930 4,257 4,767(3)Operating Beds

5,153(3)


Average Length of Stay (Days) (4) Average Revenue per Occupied Bed (5)

(Rs / Day)


g g y ( )reduced across the portfolio– Reduced in mature hospitals due to

advancement in treatments– Increase in minimally-invasive

procedures

15 18416,620

18,47420,455

5.18 5.15

Reduction in ALOS Increased ARPOB

g g y ( y ) (Rs. / Day) Average revenue per occupied bed (ARPOB) has grown at a healthy CAGR of 9.3% over the last three years– Culmination of high occupancy, higher

tariffs, better case mix and decreasing ALOS

14,356 15,1844.84

4.79 4.78– FY08-12 CAGR in core therapeutic

areas: Transplants (29%), Orthopedics (16%), Neurosciences (16%), Oncology (24%) and Cardiology (10%)

11

FY08 FY09 FY10 FY11 FY12Note: All operating data for owned hospitals.(1) Inpatients are patients admitted in the facility for more than 23 hours.(2) Bed Occupancy Rate: Total Occupied Bed Days / Total Operating Bed Days. Represents % of

available hospital beds occupied by patients.


(3) Excludes our hospitals located outside India.(4) ALOS represents average number of days patients stay in our hospitals.(5) ARPOB: Total Hospital Revenue / Patient Days (Total Occupancy in Numbers (Average Daily

Census ) * No of days ) (Net of doctor fees).Source: Company MIS reports.

Cluster wise operational performanceApollo has consistently delivered improvement across various operational parameters over the past

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

AHEL Standalone

p y p p p pfew years, driving growth even in mature hospitals.

Particulars Q1 FY 12 Q1 FY 13 Growth yoy (%)

Q1 FY 12 Q1 FY 13 Growth yoy (%)




No. of Operating beds 5,006 5,218 1,162 1,130 930 930 1,164 1,299 1,750 1,859

Inpatient volume 66,357 74,819 12.8% 17,425 17,691 1.5% 10,642 11,804 10.9% 13,224 16,746 26.6% 25,066 28,578 14.0%

Outpatient volume (3) 230,463 260,905 13.2% 73,747 83,489 13.2% 31,278 34,291 9.6% 37,061 44,250 19.4% 88,377 98,875 11.9%

Inpatient ALOS (days) 4.87 4.70 4.65 4.63 4.78 4.44 5.66 5.14 4.64 4.59

Bed Occupancy Rate (%) 71% 74% 80% 80% 60% 62% 71% 73% 78% 77%

Inpatient revenue (Rs mio) NA NA 1,599 1,879 17.5% 687 809 17.8% 627 843 34.5% 2,149 2,551 18.7%

Outpatient revenue (Rs mio) NA NA 449 568 26.3% 166 168 0.8% 132 143 8.4% 432 477 10.4%

ARPOB (Rs /day) (4) 19,870 21,457 8.0% 25,301 29,852 18.0% 16,796 18,637 11.0% 10,083 11,447 13.5% 22,183 23,106 4.2%

Total Net Revenue (Rs mio) (4) NA NA 2,048 2,446 19.4% 853 976 14.5% 758 986 30.0% 2,581 3,028 17.3%

Chennai & Hyderabad clusters

Chennai cluster witnessed growth in revenues driven by OP volumes, improvement in case mix and pricing.

Revenue growth of 14 5% in Hyderabad Volume growth on focus COEs like Cardiology Neurosciences Gastroenterology and Oncology Revenue growth of 14.5% in Hyderabad .Volume growth on focus COEs like Cardiology, Neurosciences , Gastroenterology and Oncology.

Focus on Increasing ARPOB through reduced ALOS, pricing and case-mix improvement.

Others cluster - driving substantial growth ( 30.0%) – focus on Inpatient growth (34.5%). 8.4% growth in OP Revenues driven by Volumes in Bhubaneswar, Madurai, Karur , Karaikudi & Karimnagar.

Good traction in Bhubaneswar with average occupancy at 70% (174 beds) .

Significant Subsidiary / JVs & Associates hospitals’ continued improving performance - revenue growth of 17.4%. Over 17% yoy growth in Kolkata and Ahmedabad.Notes:

12

Notes:(1) Others include Madurai, Karur, Karaikudi, Mysore, Vizag, Pune, Karimnagar, Bilaspur and Bhubaneswar.(2) Significant Hospital JVs/Subs//Associates are – Ahmedabad, Bangalore, Kolkata, Kakinada and Delhi (full revenues shown in table above).(3) Outpatient volume represents New Registrations only. OP Volumes of Clinics have now been included in Chennai Cluster, Others and Significant Subs/JVs/Associates.(4) Net Revenue is net of doctor fees and ARPOB calculated above does not include revenues from 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.

Standalone Pharmacies: capturing the growth potential

India’s largest organized pharmacy retail chain with a network of 1 357 stores

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

Overview

India s largest organized pharmacy retail chain with a network of 1,357 stores.

Number of Standalone Pharmacies

8831,049

1,1991,364

617

consumables and over-the-counter products

• Asset light business model with an established track record

• Presence in affluent centers such as Hyderabad, Chennai, Bangalore, Pune, Ahmedabad and NCR regions


• Introduced generic and in-house brands (Private Labels)

• Consistent growth in standalone pharmacy revenue– Calibrated rollout: 165 stores opened in FY12, 150 in FY11

and 166 in FY10Increased penetration of pri ate label sales

Financial Performance– Increased penetration of private label sales– Integrate supply chain network and optimize inventory levels

Emphasis on margin improvement– Mature cohort of pre-2007 stores have achieved 5.7%

EBITDA margins in FY12 4 817

6,614

8,606

Revenue (Rs. mn)

g– Positive overall EBITDA margin FY 11 and FY 12 3,322

4,817

1,996


13

Source: Company audited financials and MIS reports.


Operational performance: Standalone PharmacyKey CommentsKey Financials (INR mn)

• Standalone pharmacies continues its EBITDA expansion trajectory on the back of buying efficiencies and operating leverage.

Batch Particulars Q1 FY12 Q1 FY13 YoY%Upto FY07 Batch No. of Stores 311 291

Revenue/Store 2.20 2.55 15.70%

EBITDA/Store 0.11 0.15 31.70%

• EBITDA of Rs. 61.4 mio in Q1FY13.

• Gross stores added 26 and stores closed 33. No. of stores as on 30th June 2012 is 1,357 .

EBITDA/Store 0.11 0.15 31.70%

EBITDA Margin % 5.1% 5.8% 71bps

FY08 Batch No. of Stores 196 177


EBITDA/Store 0.02 0.07

• LFL (Like-for-like) Revenue per store growth for the pre FY2007 batch of stores is 15.7% (yoy) and FY 2008 batch is 25.5% (yoy).



Total No. of Stores 1,220 1,357


EBITDA/Store 0 02 0 05• LFL EBITDA per store growth for the up to FY

2007 batch of stores is 31.7% (yoy) and EBITDA margin improved by 71 bps to 5.8%.and EBITDA margin for FY 2008 batch is 3.5% as compared to 1.1% in Q1FY13, an improvement of 238 bps.



Total Revenues 1,897.6 2,476.6 30.50%

EBITDA 22.6 61.4

EBITDA Margin % 1.2% 2.5% 129bpsEBITDA Margin % 1.2% 2.5% 129bps

Capital Employed (Rs. mn) 2,248.73 2,843.40

Capex (Rs. mn) 28.16 28.26

14

Q1 FY13: Financial Performance

Standalone Financials Consolidated Financials ( Unaudited estimates)

Q1 FY 12 Q1 FY 13 yoy (%)

Income from Operations 6,787 8,256 21.6%Add: Share of JVs 447 557 24.5%Total Revenues 7 234 8 813 21 8%

Standalone Financials Consolidated Financials ( Unaudited estimates)

Q1 FY 12 Q1 FY 13 yoy (%)

Revenue 6410 7774 21.3%

Operative Expenses 3381 3997 18.2%Total Revenues 7,234 8,813 21.8%

EBITDA 1,194 1,480 24.0%margin (%) 16.5% 16.8% 29 bps

Profit After Tax 545 787 44.2%

Employee Expenses 962 1257 30.7%Administrative & Other Expenses 1008 1215 20.6%Total Expenses 5352 6470 20.9%

EBITDA 1059 1304 23.2%margin (%) 16.5% 16.8% 26 bps

Total Debt 7,979 Cash & Cash equivalents (includes investment in liquid funds) 2,507

Depreciation 200 251EBIT 859 1053 22.6%margin (%) 13.4% 13.5% 14 bps

Financial Expenses 147 137Add Other Income 47 41

Profit Before Tax 759 957 26.1%

Profit After Tax 513 697 36.0%margin (%) 8.0% 9.0% 97 bps

ROCE (Annualized) 17.0% 17.6%(1) R th f 21 8% f R 7 234 i i Q1FY12 t R 8 813 i i Q1FY13Capital Employed 20210 23958(1)

Previous year figures have been reworked/regrouped /rearranged and reclassified wherever necessary to conform

• Revenue growth of 21.8% from Rs. 7,234 mio in Q1FY12 to Rs. 8,813 mio in Q1FY13

• Consolidated EBITDA grew by 24.0% (margin expansion by 29 bps) aided by expansion in Healthcare services EBITDA, improved EBITDA contribution by SAPs and reduction in negative EBITDA in Apollo Munich Health Insurance.

• Consolidated PAT grew 44.2% from Rs.545 mio in Q1FY12 to Rs. 787 mio in Q1FY13.

• Revenues of Rs. 7,774 mio, 21.3% yoy growth.

• EBITDA at Rs. 1,304 mio, 23.2% yoy growth.

• EBIT at Rs. 1,053 mio, 22.6% yoy growth.

• PAT at Rs. 697 mio, 36.0% yoy growth.

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(1) Capital employed for the calculation of ROCE does not include Capital Work in progress on new hospital expansion projects of Rs. 3,086 mio for Q1FY13 and Rs. 2,418 mio for Q1FY12 & investments in mutual funds and associates.

JVs include Ahmedabad-50%, Kolkata-50% ,PET CT - 50%, Apollo Munich – 10.45%,

Quintiles – 40%, Apollo Lavasa – 34.66% and Future Parking Pvt Ltd – 49%

to the requirement of revised Schedule VI of the Companies Act 1956.• RoCE at 17.6% as compared to 17.0% in spite of additional capital employed of Rs. 3,748 mio in new facilities in Hyderabad, Karaikudi and Karur.

Key strategies

Aim to ensure dominant bed share in key strategic markets – Chennai, Hyderabad, Delhi, Kolkata, Ahmedabad, Mumbai and Bangalore

Leverage brand strength to become the dominant healthcare provider by providing additional services in dominant clusters

Establish / strengthen presence in key strategic

markets

Plan to add 15 hospitals and 3,140 owned beds by FY15 Expansion in tier II and tier III cities through REACH hospitals, garnering first mover advantage and

leveraging strong brand Expansion through both Greenfield projects and acquisition of hospitals

Focus on owned hospitals for expansionand REACH initiative

Set benchmark standards in clinical outcomes in select acute and tertiary care services –Cardiology, Oncology, Neurosciences, Critical Care, Orthopedics and Transplants

Aim to gain significant market share in each of the key specialties

Focus on Centers of Excellence

Improving average revenue per bed day through richer case mix Higher operating efficiencies and asset utilizations Higher patient turnover by reducing average length of stay

Cost efficiencies and focus on improvingkey operating metrics

Focus on margin improvement in the standalone pharmacy business Leverage brand value through investment in clinics, etc

Improve performance in other businesses

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Planned expansionWell planned strategy to address growing demand for healthcare service delivery in existing markets,

Defined Expansion Plan for Owned Bed Capacity(1)

Focus on owned hospitals– Plans to add 15 hospitals from the current 36

Strategy for Expansion

new large markets and semi-urban markets.

AHEL’s Share

Total Estimated

Project – Plans to add 15 hospitals from the current 36– Plans to add 3,140 beds to the current 5,908

3 pronged approach towards expansion– Expansion of beds and facilities / units in existing clusters –

address increasing demand and focus on key specialties

of Cost(Rs. mn)

Mumbai Cluster

Navi Mumbai FY14 Super Specialty 350 3,500 3,500

Byculla, Mumbai FY14 Super Specialty 300 1,400 1,400

Thane(1) FY14 Super Specialty 250 2,200 550Sub Total 900 7 100 5 450

Location CoD(3) Type of Hospital No of Beds

Project Cost

(Rs. mn)

Become dominant healthcare provider in key locations– New hospitals in metros and large cities with no existing presence

– reaching to wider urban population– Expansion in tier II and tier III cities through REACH hospitals,

garnering first mover advantage and leveraging strong brand Operational REACH hospitals in Karimnagar Karur and

Sub Total 900 7,100 5,450

Chennai Cluster

Chennai-Main (Expansion) FY13 Super Specialty 30 100 100

Ayanambakkam FY13 REACH 200 700 700

MLCP FY13 – 337 83

Women and Child FY14 Super Specialty 60 740 740

Chennai (OMR) FY14 Super Specialty 45 310 310 Operational REACH hospitals in Karimnagar, Karur, and Karaikudi

Four REACH hospitals coming up in Ayanambakkam, Nellore, Trichy and Nashik

Funding Plans– Favorable leverage metrics provides significant headroom to

South Chennai FY15 Super Specialty 350 2,940 2,940Sub Total 685 5,127 4,873

REACH

Nashik FY14 REACH 125 520 520

Nellore FY14 REACH 200 667 667

Trichy FY13 REACH 200 655 655 g p graise capital Debt to Equity ratio of 0.24x and Debt to EBITDA of 1.35x(4)

– As at June 30, 2012 Apollo has already invested Rs.3,224 mn of the Rs. 18,151 mn, its share of total capex

(1) Held through JVs. AHEL share of costs is lower than total estimated project cost since it excludes share of JV t

Sub Total 525 1,842 1,842

Others

Patna Phase I FY15 Super Specialty 240 2,760 2,760

Vizag FY14 Super Specialty 300 1,150 1,150

Bangalore Ortho and Spine FY13 Super Specialty 125 558 558

North Bangalore FY14 Super Specialty 180 770 770

Bilaspur: Oncology Block(2) FY13 Super Specialty 80 80

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JV partner.(2) Refers to the expansion of the Oncology wing only.(3) Expected date of completion.(4) as on June 30, 2012.

Bilaspur: Oncology Block( ) FY13 Super Specialty – 80 80

Indore FY14 Super Specialty 185 668 668

Sub Total 1030 5,986 5,986

Total 3,140 20,055 18,151

Board of directors and key senior management teamBoard Members Key Senior Management Team

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 • Managing Director

K. Padmanabhan • Group President and has been with the company since 1996

• Responsible for business and strategic initiatives across the group

S. Premkumar • Group Chief Executive Officer – Healthcare Services and has joined the company this yearDr. Preetha Reddy Managing Director

• On the Board since the year 1989Suneeta Reddy • Joint Managing Director

• On the Board since the year 2000Sangita Reddy • Executive Director (Operations), on the Board since 2000

• Received “Young Manager of the year 1998” award from Hyderabad Management Association

j p y y• Responsible for business, strategy and operations 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 2002y g

• Was a member of the Prime Minister’s delegation to Malaysia organized by the CII

Shobana Kamineni

• Executive Director (Special Initiatives), on the Board since 2010

• Over 20 years of experience in the healthcare industryKhairil Anuar Abd ll h

• Independent Director

• 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 subsidiariesAbdullah • On the Board since 2005Michael Fernandes

• Alternate Director to Khairil Anuar Abdullah• Country head for India and also in charge of the healthcare

portfolio of KhazanahSandeep Naik • Nominee of Apax Mauritius FDI One Ltd.

• On the Board since 2009

V. Satyanarayana Reddy

• Chief Executive Officer – Chennai Division and has been with Company since 1989

• Responsible for hospital operations of the Chennai Region

Dr. K. Hariprasad • Chief Executive Officer – Central Division and has been with the Company since 1999

• R ibl f h it l ti f th C t l R iN. Vaghul • Independent Director, on the Board since 2000• Conferred the Padma Bhushan in 2009

T.K. Balaji • Independent Director, on the Board since 2001Deepak Vaidya • Independent Director, on the Board since 2000

• Chairman of the Audit committeeOther Independent Di t

• G Venkatraman, Habibullah Badsha, Rafeeque Ahamedd R jk M

• 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

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Directors and Rajkumar Menon Responsible for people initiatives over 12 years of experience

Arvind Sivaramakrishnan

• Chief Information Officer of the Company• Responsible for driving IT initiatives and projects

Thank you

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