Investor Presentation
September 2018
2
Prasanth Manghat
CEO
Hani Buttikhi
CIO
Senior management presenting
Prashanth Shenoy
CFO
2
Asjad Yahya
Investor Relations
3
Agenda
3
1
2
Overview of the business
Understanding the Saudi opportunity better
3 Transformational partnership with GOSI to form a new KSA healthcare champion
4 M&A: A vital part of the story
5 Financial outlook
6 A closer look at key assets
7 Appendix
4
NMC at a glance
4
Over 108,000
distribution SKUs
100+ owned and managed facilities
2017 Group revenues:
USD 1.6bn
Operations across
17 countries
Over 5.7 mnpatients in 2017
1,919licensed beds
2017 Group EBITDA:
USD 353mn
20%
2017 RoAE
FTSE 100 company
c. £7bn market cap
c. 2,000 doctors
c. 18,000 staff
5
Est. 1975
c.109,000 SKU’s
Five verticals built around centres of excellence
5
CENTRE OF
EXCELLENCE
Est. 1975
1,259 beds
Est. 2015
106 beds & c.20k Cycles
Est. 2015
554 beds
Est. 2012
Over 1,000 beds
Card
iolo
gyL
ong-te
rm
Care
6
Future growth driven by a well-defined strategy
6
2015 Strategy Update 2017 Strategy Update
Capacity Build Capabilities Focus Geographic Expansion
Accelerate the establishment of Centres of Excellence in
key specialties within existing hospitalsAddition of new verticals focused on highly
underserved segments in the UAE and wider GCC and
further development of Centres of Excellence
Establish a strategic presence outside the UAE with
leading global medical institutions to enhance and
expand technological know-how and medical expertise
Increase participation in the growing UAE medical
tourism industry and establish NMC as a destination of
choice
Grow NMC’s medical speciality offering and clinic
network within the UAE and maximising operational
synergies
Increase NMC’s footprint in Saudi Arabia and the
broader GCC via organic initiatives and acquisitions
NMC Health’s strategy is built on three key tenets
Expanding the healthcare business’ target market
from the GCC to wider emerging markets
Fertility to be developed as a global business taking
advantage of substantial growth opportunities
Rapid adoption and deployment of technological
innovation via both organic initiatives and acquisitions
1 2 3
77
An expansive footprint: 100+ facilities across 17 countries
Own and O & M
Key to facilities
Own
O & M
Colombia
Brazil
Spain
UK
Sweden
Kenya
YemenOmanUnited Arab Emirates
Italy
Latvia
Slovakia
Egypt
Denmark
Kuwait
Saudi Arabia
Jordan
8
Agenda
8
2
1
Understanding the Saudi opportunity better
Overview of the business
3 Transformational partnership with GOSI to form a new KSA healthcare champion
4 M&A: A vital part of the story
5 Financial outlook
6 A closer look at key assets
7 Appendix
9
Attractive demographics working in NMC’s favour
9
33m pop’n
▪ 2% growth rate p.a., twice the global growth rate
▪ NMC has c. 1,200 licensed beds in UAE with a population base of 9-10mn. This implies
potential for 3,000-4,000 beds in KSA on simple comparison
▪ KSA faces an estimated shortage of 30,000 beds, requiring substantial investment
▪ Median age of 29 years
▪ Healthy outlook for various
medical segments NMC focuses
on:
▪ Obstetrics and
Gynaecology; Paediatrics;
Fertility (IVF) and
Cosmetics
30% of the
pop’n <19 yrs
▪ Beds shortage in KSA estimated
at 15,000
▪ 30% of existing, overall beds in
the system blocked by LT care
patients
▪ Geriatrics continues to expand
at a rapid 7-8% CAGR
Considerable
demand for LT
care beds
▪ As with most GCC countries,
lifestyle disease is a major
problem in KSA
▪ Almost 70% of the population is
obese
▪ 30% of the population is
diabetic, or pre-diabetic
Prominence
of lifestyle
disease
10
Continued roll-out of insurance coverage a significant potential
catalyst
10
Public sector 56%Private sector 44%
Stats Gov Est. Q2 2018*
population
33.4 m
Saudis
20.7
Expats
12.7
Saudis
5.0
Expats
10.2
Private Insurance Mandate
(Addressable Market)
15.2 m
Expats
8.2
Saudis
2.7Under insured
expats
1.2
Saudis
2.2
Public Coverage
18.2 m
Dependent of
expats & illegal
residents
0.9
Insured end Q2 ‘18
10.9 m
Under/Uninsured
4.3 m
Gov.
Employees
12.0
Retired
2.4Gov.
Employees
0.4Domestic
Helpers¹
2.1
Saudis
15.7 m
Expats
2.5 m
Unemployed
0.8
Others
0.5
Source: Stats.gov.sa, GOSI, Mol., CCHI, and Bupa Arabia estimates.
* Doesn’t include recent deportation of illegal expats
(1) Not under public coverage but also not under private insurance mandate
Saudis
15.7
Expats
2.5
11
Agenda
11
3
1
Transformational partnership with GOSI to form a new KSA healthcare champion
Overview of the business
2 Understanding the Saudi opportunity better
4 M&A: A vital part of the story
5 Financial outlook
6 A closer look at key assets
7 Appendix
12
NMC and GOSI have entered a strategic partnership to create a
new national healthcare champion in KSA
12
Formation of a new and unique
national champion
#2 private healthcare operator in KSA
by beds capacity
Strong platform with pan KSA
presence
Wide ranging yet well defined
investment mandate
Strong synergy potential to support
sustainable value creation
1
2
3
4
5
13
Formation of a new national champion
13
JV to be capitalized through:
▪ NMC to transfer its KSA assets
▪ GOSI/ Hassana to transfer their stake in CARE at
c.SAR70 per share
▪ NMC to fully consolidate the JV’s financials and retain
operational, Board and management control
▪ Transaction remains subject to regulatory approvals and
due-diligence
JV capitalization New structure
1
2
New JV
> 51% < 49%
38.9%majority
KSA Assets
New JV
38.9%
1
2At SAR70 /
share
KSA Assets
majority
14
Addition of CARE to the existing portfolio: substantial growth
opportunity
14
Significant milestones achieved since inception which now includes 2 flagship hospitals
1967
Year incorporated
USD46m
2017 EBITDA
+7%
2013-17 EBITDA
CAGR
2013
Year listed
+10%
2013-17 Rev.
CAGR
USD380m
Total assets
USD667m
Market cap.(1)
c. 3,000
Total staff
Note: company information, Facstet. SAR to USD exchange rate: 0.2666
(1) As of 7 June, 2018 (closing share price: SAR55.8)
USD228m
2017 Revenue
1967 1991 2015
20%
2017 EBITDA
margin
0.5x
Leverage (2017
Net Debt/EBITDA)
10%
2017 Net profit
margin
RCH 330, CNH
495
Number of beds
2
Hospitals
1
Polyclinic
1
Mobile unit
15
664
788
825
998
1,020
1,328
1,489
c.1,850
Newly formed JV platform will be the second largest Saudi operator
by bed capacity in KSA
15
Source: companies website, AlpenCapital GCC Healthcare industry report (March 2018)
Notes: Market cap as of 6 June 2018
(1) Best estimate for the number of beds from publicly available sources which include the under construction Al-Habib Medical City, Al-Khobar Hospital and two hospitals in Jeddah
(2) No of beds does not include announced Greenfield project in Al Khobar by NMC
(3) Includes the under construction Mouwasat Hospital Al Khobar (220 beds)
(4) Includes the expansion of Dallah Hospital Al-Nakheel by 150 beds and the development of Namar Hospital (400 beds)
KSA
KSA
(1)
(3)
(4)
A combination of NMC’s KSA assets and CARE would immediately create one of the largest private
healthcare providers by beds capacity
(2)
10(1)
7
3
6(2)
2(3)
5
5
2
# of beds capacity # of hospitals
Al Rashid
Hospital
Al Salam
Medical Group
Chronic Care
Al Qadhi
Specialty
As Salama
Hospital
National Care
Hospital
Riyadh Care
Hospital
Ha’il
Najran
JeddahRiyadh
Al Khobar
64 beds
330 beds
495 beds
140 beds
100 beds
140 beds
220 beds
NMC’s hospitals CARE’s hospitals
(2)
Beds capacity and number of hospitals Strategic geographic positioning across KSA
16
NMC is now in a position to replicate full continuum of care across
Saudi Arabia
16
Tertiary
Highly
specialised
Primary Care
Multi-specialty
UAE
Establishing an integrated
network across the full
continuum of care
UAE KSA
17
Agenda
17
4
1
M&A: A vital part of the story
Overview of the business
2 Understanding the Saudi opportunity better
3 Transformational partnership with GOSI to form a new KSA healthcare champion
5 Financial outlook
6 A closer look at key assets
7 Appendix
18
10.2x
7.6x
9.6x
12.6x
11.1x
8.5x
12.9x 12.4x
17.4x
19.9x 19.9x
23.2x22.2x
21.0x
22.5x
33.9x
Feb-15 Apr-15 Apr-15 Jun-15 Nov-15 Aug-16 Dec-16 Jan-18
Snapshot of key acquisitions
18
57%
14%
4%
36%
16%
30%
14%
Price performance post-acquisition (+4 months)
Significant medium-term returns to NMC
shareholders from integration of acquisitions
Price m
ovem
ent
(fro
m p
re-a
nnouncem
ent clo
sin
g p
rice)
NMC undisturbed LTM EV/EBITDA (pre-acquisition)
LTM EV/EBITDA multiples paid: recent acquisitions (>USD25mn)
Demonstrated discipline in identifying and executing
immediately accretive acquisitions
Source: NMC, S&P Capital IQ
+24% on average
19
90+30
+26
+140+17
+220 +5+26
Case study: Leveraging the long-term care acquisition
19
Evolution of long-term care beds
Source: NMC, S&P Capital IQ
▪ Fully acquired ProVita in June 2015
for a total consideration of US$ 161m
▪ 90 beds at time of acquisition
▪ Added 35 beds organically
▪ Cross-asset pollination:
▪ Added 52 and 17 LT care
beds in NMC Royal and Al
Zahra, respectively
▪ Dual benefit of enhancing
service offering and
improving margin profile
▪ Entered the Saudi market by
targeting the highly under-served LT-
care segment
▪ This route would not have
been possible without the
ProVita license and expertise
▪ Increase in number of beds from 90
to 554 done at an incremental cost of
only c. US$ 40m
No. of long-term care beds added to NMC network
90 120 146 286 303 523 528 554
No. of LT care
beds at
acquisition
Organic
expansion
H2 2015 H1 2016 H2 2017
Royal Hospital
additions
As-Salama
additions
Al Zahra
additions
Chronic Care
H1 2017
Total
beds
Organic
expansion
Royal
Hospital
additions
20
Agenda
20
5
1
Financial outlook
Overview of the business
2 Understanding the Saudi opportunity better
3 Transformational partnership with GOSI to form a new KSA healthcare champion
4 M&A: A vital part of the story
6 A closer look at key assets
7 Appendix
21
NMC’s strategy has delivered consistent long-term revenue and
EBITDA growth
21
Revenue (US$m)
339 387 444 490 551 644
881
1,221
2009 2010 2011 2012 2013 2014 2015 2016 2017
CAGR FY09-17: 21.4%
Growth
EBITDA (US$m)
42 56 71 80 93 103
150
246
2009 2010 2011 2012 2013 2014 2015 2016 2017
Growth
Margin
CAGR FY09-17: 30.5%
14.0% 14.8% 10.5% 12.4% 16.9% 36.8%
34.3% 25.0% 12.9% 16.7% 10.3% 46.7% 63.7%
12.4% 14.6% 15.9% 16.2% 16.9% 15.9% 17.1%
38.6%
20.2%
31.3%
44%
22.0%
353
1,603
22
Solid growth momentum seen in 2017 to continue in 2018
Key figures2017 results overview
22
880.9 1,220.8 1,603.4
36.8%
38.6%
31.3%
0%
10%
20%
30%
40%
50%
0
300
600
900
1,200
1,500
1,800
2015 2016 2017
Revenue US$m and annual growth
Revenue Growth
150.3 246.1 353.4
17.1%
20.2%
22.0%
0%
5%
10%
15%
20%
25%
0
100
200
300
400
2015 2016 2017
EBITDA US$m and margin
EBITDA Margin
2018 outlook
▪ 2018E guidance:
▪ 22% YoY revenue growth
▪ EBITDA of around US$ 465m
▪ Strong cash conversion cycle sustained
▪ 79% of EBITDA converted into cash flow from
operations in 2017
▪ Net debt-to-EBITDA projected at 2.7x at end-2018
▪ FY 2017 revenue reached US$ 1.6bn, up 31.3% YoY
▪ Healthcare business accounted for 70% of Group revenues
and 87% of Group EBITDA for the year
▪ EBITDA increased by 43.6% to US$ 353.4m
▪ EBITDA margin reached 22.0%, increase of 180bps YoY
▪ Adjusted net profit reached US$ 236.6m, up 43.2% YoY
23
Strong growth built within the system
Capex already incurred for upcoming beds*
23
Earnings uptrend to continue
25% EBITDA margin sustainable over long termBreakup of operational beds (2018E)
*: additional 210 beds under construction in KSA
537
679
1,365
1,675
2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 E
Operational beds
Mature beds, 53%
Beds in ramp-up
phase, 47%
22%
25%
2 0 1 7 2 0 2 0 / 2 0 2 1
Group EBITDA margin
1,221
1,603
1,956
246 353
465
2 0 1 6 2 0 1 7 2 0 1 8 E
Revenues (US$mn) EBITDA (US$mn)
24
Agenda
24
6
1
A closer look at key assets
Overview of the business
2 Understanding the Saudi opportunity better
3 Transformational partnership with GOSI to form a new KSA healthcare champion
4 M&A: A vital part of the story
5 Financial outlook
7 Appendix
25
Multispecialty Vertical:
The foundation of the healthcare business
25
Abu Dhabi Specialty: The original healthcare facility
US$575m
▪ Established in 1975 as a small pharmacy, with a clinic added in 1976
▪ 127-bed facility in the heart of Abu Dhabi island
▪ One of the largest top and bottom line contributors for NMC:
▪ 2017 revenues of over US$ 130m, serving over 1m patients p.a.
▪ Consistent EBITDA margin
▪ Sustaining 7-9% YoY revenue growth, despite maturity of the asset
▪ Increase in top line driven by:
▪ Annual price revisions
▪ Capacity expansions
▪ Introduction of more sophisticated specialisms
Al Ain Specialty: Key driver of intermediate growth
▪ Established in 2008, the facility is designed to cater to the greater
concentration of Emiratis within Al Ain’s population
▪ 125 licensed beds, 115 currently operational
▪ Al Ain Specialty has sustained over 20% revenue CAGR since its opening in
2008
▪ Al Ain Specialty’s top line growth is anticipated to moderate in the coming
years, but the facility will remain one of the key drivers of NMC’s revenue
and EBITDA growth over the near to medium term
26
Multispecialty Vertical:
Dubai assets primed to capitalize on mandatory insurance rollout
26
Dubai Specialty: Leveraging off mandatory insurance in Dubai
US$575m
▪ 116-bed facility established in 2004
▪ Positive impact of introduction of mandatory insurance in Dubai already
visible in the form of improving patient footfall
▪ Witnessing double digit revenue and patient growth in past 3 years
▪ Given that the final phase of the mandatory insurance roll-out was
completed in March 2017, a material improvement in operations is
anticipated from 2018 onwards
▪ NMC owns the plot of land adjacent to Dubai Specialty Hospital, allowing for
doubling of capacity if sufficient patient demand is generated
DIP Hospital: Catering to “New Dubai”
▪ Located in Dubai Investment Park, the 86-bed facility is the only hospital
catering to a catchment of over 300,000 patients
▪ Only hospital in Southern Dubai with inpatient facilities
▪ Services offered include sophisticated specialisms such as:
▪ Cardiology
▪ Critical care medicine
▪ Neurology and
▪ Neonatology
▪ Similar to the case for Dubai Specialty, the DIP Hospital is anticipated to be
a key beneficiary of the roll-out of mandatory insurance in Dubai
27
Multispecialty Vertical:
Major growth drivers of the future
27
Al Zahra Hospital: Completing the ‘hub & spoke’ model in Sharjah
US$575m
▪ NMC announced the US$ 560m acquisition of Al Zahra Hospital in
December 2016
▪ Widely recognized as the highest quality private sector hospital in Sharjah,
with over 35 years of operational experience
▪ Licensed capacity of 154 beds
▪ 17 long-term care beds introduced at the hospital; to be managed by
ProVita
▪ Ability to increase total number of beds to 200 without significant
capex
▪ Serves as a hub for NMC’s existing network of outpatient facilities in Sharjah
that cater to 800,000 patients per annum
▪ Focus on under-utilized specialities, such as cardiology, expected to
substantially improve revenue generation and margin profile
NMC Royal Hospital: Transformational impact on the healthcare portfolio
▪ Only private tertiary care hospital in UAE
▪ Licensed for 316 beds, with the potential to increase capacity to 400 beds
▪ Completed in late 2015, operational ramp-up progressing ahead of
expectations
▪ EBITDA breakeven achieved in less than 18 months versus original
guidance of 24 months
▪ A key beneficiary of the recent relaxation of regulations for Thiqa
cardholders, with Emiratis constituting over 40% of the patient base
▪ Expected to be primary top and bottom line growth driver for NMC from 2019
onwards and likely to become largest contributor by 2022
28
Multispecialty Vertical:
Establishing a foothold in the lucrative Saudi market
28
Al Qadhi Specialty Hospital: Only private tertiary care facility in Najran
US$575m
▪ Only tertiary care facility in Najran, serving a population of over 500k
▪ The transaction was sourced and completed by NMC’s own team
▪ Strong business relationship with the original owner translated into
an attractive deal for NMC Health
▪ The facility recently signed a contract with the Saudi Arabian Society of
Metabolic and Bariatric Surgery for referral of patients
▪ Bariatric surgery represents addition of a value-add service to the
facility
▪ NMC’s team played an instrumental role in the introduction of this
service, reflecting rapid integration with the acquired entity
▪ Land and building owned by previous owner
▪ Long-term lease signed
▪ Owner also owns adjacent land, allowing further expansion
Al Rashid Hospital: First private hospital in Ha’il
▪ Established in 1991, Al Rashid was the first private hospital in Ha’il
▪ Serving a population of over 500k
▪ Benefits from a strong reputation and better geographic positioning
than competitors
▪ Ha’il remains underserved in terms of healthcare services
▪ Al Rashid currently offers primary and secondary care services
▪ New specialities to be added following the acquisition
▪ Transaction completed at one of the lowest multiples paid by NMC to date
▪ Land and building acquired as part of the transaction, with empty
adjacent land allowing further expansion
29
Multispecialty Vertical:
Greater focus on specialisms in larger cities in KSA
29
Al Salam Medical Group: Entry into the largest healthcare market in KSA
US$575m
▪ Established in 1985, Al Salam Medical Group owns a 100-bed hospital and
2 polyclinics in Riyadh
▪ Served over 900k patients in 2016
▪ Transaction completed at less than 7x 2018E EV/EBITDA multiple
▪ Hospital and clinics offer a range of specialties, including cardiology and
paediatrics
▪ NMC to add a number of specialized services after the acquisition, including
long-term care, cosmetics and IVF
▪ Availability of vacant land adjacent to existing facility offers opportunity for
further growth
30
Multispecialty Vertical:
Building a leading position in the Omani private healthcare space
30
Atlas Healthcare: The first extension of vertical outside UAE
US$575m
▪ Private healthcare sector still at a nascent stage in Oman
▪ With 102 beds, NMC’s facilities account for a 20% market share in
the private healthcare space
▪ Mandatory healthcare insurance to be rolled out in Oman from 2018
▪ Two facilities acquired from Atlas Healthcare, located in Ruwi and Ghubra,
respectively
▪ Both facilities have been upgraded and rebranded
▪ Focus on expansion of medical staff (particularly doctors) and introduction of
specialities to support improvement of operational performance
31
Multispecialty Vertical:
Reinforcing the cosmetics and aesthetics business
31
CosmeSurge: A leader in a high growth market segment
US$575m
▪ Largest group of cosmetic surgeons, dermatologists and dentists in the GCC
▪ Enhances NMC’s cosmetic services portfolio
▪ Cosmetic and aesthetic services added to invasive cosmetic
procedures and complex surgeries already offered by NMC
▪ Transaction completed at an attractive 2018E EV/EBITDA multiple of 10.6x
▪ NMC managing CosmeSurge since September 2017 under O&M contract,
providing considerable insight into the business pre-acquisition
▪ Wide number of revenue and cost synergies identified prior to the
transaction
▪ Key areas in this regard include: cross-referral of patients, reduced
capex requirement from leveraging NMC’s existing capacity and cost
sharing of support services related to HR, IT and procurement
▪ CosmeSurge associated with attractive 31% EBITDA margin, with potential
for up to 400bps improvement on back of identified synergies
32
Maternity & Fertility Vertical:
Second largest IVF player in the world
32
▪ NMC acquired 86.4% stake in Clinica Eugin for EUR 143mn in February
2015
▪ Ranked among top 3 fertility providers in Europe in terms of number of
cycles
▪ Clinica Eugin is a leading IVF centre of excellence, with world leading
technology and expertise
▪ Subsequent bolt-on acquisitions have expanded geographical and
knowledge base of the company
▪ Operating in Spain, Brazil, Columbia, Italy, Denmark, Sweden, Latvia
& Kenya
▪ Substantial knowledge transfer from Clinica Eugin to UAE, which is
transforming the IVF landscape in the country
Clinica Eugin: The start of the capability focused stage of growth strategy
US$575m
Fakih IVF: The undisputed market leader in UAE
▪ Solidified foothold in UAE fertility market by acquiring 51% stake in Fakih
IVF for US$ 189m in November 2015
▪ Outstanding 49% minority acquired in 2018, with Fakih IVF now a
wholly owned subsidiary of NMC
▪ Over 40% market share in UAE with more than 4,000 IVF cycles performed
each year
▪ Aggressive expansion underway:
▪ First IVF clinic established in Oman in 2018
▪ KSA represents a major growth market. Entry planned during 2018
33
Maternity & Fertility Vertical:
Targeting a highly underserved segment of the market
33
▪ First private mother and child hospital in Abu Dhabi
▪ The 106-bed facility opened in July 2014 with only outpatient services
▪ Inpatient services introduced in July 2015, starting with 60
operational beds
▪ Brightpoint has consistently exceeded internal expectations and achieved
EBITDA breakeven earlier than original guidance provided by management
▪ Ability to cater to some of the most pronounced maternity-related
complications
▪ Premature births at as early as 24 weeks have been successfully
managed at NMC’s facilities
Brightpoint Royal Women’s Hospital: A first for the private sector in UAE
US$575m
34
Long-Term & Home Care Vertical:
A vital component of NMC’s integrated healthcare offering
34
▪ NMC fully acquired ProVita in June 2015 for a total consideration of US$
161m
▪ Only two long-term care providers currently operating in the UAE
▪ A highly underserved market, with the UAE government spending
substantial amounts on Emirati patients in long-term care abroad
▪ 30 patients shifted from abroad to ProVita facilities already
▪ Number of beds increased from 90 at time of acquisition to 194
▪ 52 LT care beds added at NMC Royal Hospital
▪ 17 LT care beds added at Al Zahra
▪ 86% bed occupancy as at end-2017
ProVita: Pioneer in UAE long-term care market
US$575m
Chronic Care : Foray into the attractive Saudi market
▪ NMC entered the Saudi healthcare market in August 2016 through 1)
acquisition of a 70% stake in Al Salama Hospital in Al Khobar and 2)
investment in a start-up long-term care provider in Jeddah (Chronic Care)
▪ Chronic Care addresses the acute shortage of LT care beds in KSA
▪ Beds are made available to other healthcare operators on a “lease
plus” model to de-clog their ICU beds
▪ Retention payments made for usage of beds in the Jeddah facility
effectively remove receivables risk
35
Aspen Healthcare: Adding value across multiple verticals
35
▪ Acquired 100% of Aspen Healthcare in 2018 at an Enterprise Value of GBP
10m, translating into 2018E EV/EBITDA of less than 2x
▪ Founded in 1998, Aspen Healthcare operates 9 facilities across the UK,
including 4 in the Greater London region.
▪ 7th largest player in the UK independent hospital market, accounting
for c. 2% market share
▪ With 223 beds, Aspen treats c. 350,000 patients per year
▪ Aspen offers strong expertise in Orthopaedics & Oncology, two of the most
underserved medical segments in the GCC
▪ Orthopaedics & Oncology account for c. 50% of Aspen’s revenues
▪ Aspen’s team has won several awards for deployment of innovative
medical treatments that can easily be adopted in the UAE
▪ Ideally positioned locations for introducing IVF services
▪ Significant opportunity for transferring knowledge across medical
procedures and diagnostics to UAE in particular and GCC in general
▪ Acquisition of Aspen will also allow NMC to capture outbound medical
tourists from the GCC, particularly for cases where adequate medical
procedures are not available in the region
▪ NMC can offer significant cost savings for governments and
individuals by offering pre and post care within its regional facilities
A key driver of NMC’s International Patient Centre
US$575m
3636
▪ Over 40 years of experience has helped transform NMC Trading into one of
the top 3 distribution companies in the UAE
▪ Around 109,000 SKUs across several segments
▪ Exclusive wholesaler of mainly globally established and branded
healthcare products and equipment
▪ Additional distribution agreements, addition of agencies, customer tie-ups
and cost efficient operations contribute to driving performance
▪ Slower growth in the Distribution division, relative to the Healthcare business
resulting in declining contribution to top and bottom line
▪ High single digit revenue growth expected to sustain
▪ EBITDA margin stable around 9-10% mark
A high RoE business
US$575m
Distribution:
Exclusive tie-ups drive growth
Segment contribution (2017)
Scientific 11.1%
Homecare0.2%
Pharma 34.2%
Education4.6%
Veterinary0.4%
FMCG 35.3%
Food14.2%
37
A snapshot of the business segments
1. Healthcare – Reported 2017 revenues up 41%, EBITDA up 31% to US$ 355.4m
2. Distribution – 2017 Revenues up 13%, SKU’s at 108.9k and EBITDA margin at 10.6%
3. Consolidated 2017 EBITDA at US$ 353.4m (+43.6% YoY), Net profit at US$ 209.2m (+38.2% YoY)1
37
880.9 1220.8 1,603.40
36.8%
38.6%31.3%
0%
10%
20%
30%
40%
50%
0
300
600
900
1,200
1,500
1,800
2015 2016 2017
Revenue Growth
Revenue US$m and annual growth
Source: NMC 2017 results presentation
1. 2015-2017 EBITDA corresponds to Profit from Operations before Depreciation, Amortisation, Impairment and Transaction Costs in the NMC annual reports
517.1 823.3 1,161.6
55.7%59.2%
41.1%
0%
20%
40%
60%
80%
0
500
1,000
1,500
2015 2016 2017
Revenue Growth
Healthcare revenue US$m and YoY growth
150.3
246.1
353.4
85.8
151.4
209.2
0
100
200
300
400
2015 2016 2017
EBITDA Net profit
EBITDA & Net profit US$m
393.4 431.9 486.8
16.1%
9.8%
12.7%
0%
5%
10%
15%
20%
0
200
400
600
2015 2016 2017
Revenue Growth
Distribution revenue US$m and YoY growth
43.5 47.1 51.5
11.1%10.9%
10.6%
8%
9%
10%
11%
0
10
20
30
40
50
60
2015 2016 2017
EBITDA EBITDA margin
Distribution EBITDA US$m and margin
3,211 4,320 5,767
34.3%34.5%
33.5%
33%
34%
35%
0
2,000
4,000
6,000
8,000
2015 2016 2017
Total patients Growth
Patients (‘000) and YoY Growth
137.0 241.1 355.4
26.5%29.3%
30.6%
0%
10%
20%
30%
40%
0
100
200
300
400
2015 2016 2017
EBITDA EBITDA margin
Healthcare EBITDA US$m and margin
33.3% 29.5% 30.6%
20%
25%
30%
35%
2015 2016 2017
Net working capital as % of sales
Scientific 11.1%
Homecare0.2%
Pharma 34.2%
Education4.6%
Veterinary0.4%
FMCG 35.3%
Food14.2%
Segment contribution 2017
38
Key healthcare segment statistics
38
1,919 licensed beds
Healthcare verticals dominate revenue stream
Revenue/patient rising as complexity increasesSharp increase in operating beds capacity
Healthcare verticals continue to grow faster than Distribution (2017)
NMC Royal largest hospital by bed capacity
137 176 190
20%
28%
8%
0%
5%
10%
15%
20%
25%
30%
0
50
100
150
200
2015 2016 2017
Rev per pat Growth
537 679 1,365
87%
26%
101%
0%
20%
40%
60%
80%
100%
120%
-
200
400
600
800
1,000
1,200
1,400
1,600
2015 2016 2017
Operational beds Growth
31
6
22
0
15
6
14
0
14
0
12
7
12
5
12
5
11
6
10
6
10
2
10
0
86
60
833.6 486.8 205.8 113.8 8.4
50.6%
29.5%
12.5%
6.9%0.5%
0%
10%
20%
30%
40%
50%
60%
0
200
400
600
800
1,000
Multispecialty Distribution Maternity &Fertility
LT &Homecare
O&M
Vertical revenues (US$mn) Share of revenues
39
Agenda
39
7
1
Appendix
Overview of the business
2 Understanding the Saudi opportunity better
3 Transformational partnership with GOSI to form a new KSA healthcare champion
4 M&A: A vital part of the story
5 Financial outlook
6 A closer look at key assets
40
0
1
2
3
4
5
6
7
0 10 20 30 40 50 60
4.2%
3.5%
2.4%
1.5% 1.0%
0.8% 0.3%
UAE GCC Africa Oceania Asia Americas Europe
50%
95%
2006 - Pre 2014 - Post
Attractive dynamics in the UAE healthcare market
40
1. Strong Macro Indicators – ratings agencies estimate UAE GDP growth in 2017e of ~2.3%
High historic population growth1 High GDP per Capita2 (US$ ‘000)
2. Growing demand, spending and lagging capacity
3. Mandatory healthcare insurance: Abu Dhabi in 2007, Dubai started in 2014 and Sharjah is expected to be next
Abu Dhabi Est. % of population covered AD insurance categories7
Healthcare expenditure per capita4 (US$) Beds/GDP per capita5 ('000)
Source: (1) IHS Connect data, 2008-15 population growth CAGR. (2) As at 2016, Oxford Economics, GDP per capital, real US$, constant prices (3) Latest statistics based on Dubai Statistics Center Dubai Statistics Center, Dubai Courts
Department, Dubai Health Authority and Global Media Insight
Source: (4) WHO, BMI as at 2016. (5) As at 2015, GDP per capita sourced from government offices of statistics or central banks; (6) Latest statistics from WHO, BMI HAAD
Source: EIU, Booz & Co, IMF, HAAD, DHA, MOH, UAE Stats; (7) Abu Dhabi insurance categories based on 2016 HAAD payer members split
Medical staff/1,000 population6
66
52 46 42 41
36
21 17
Qatar US UK UAE Kuwait KSA OmanGermany
World Average: 1.2%
10,203
4,722
3,312
1,956 1,737 1,388 1,066
US UK Qatar UAE Kuwait KSAGermany
France Germany
USUK
UAE
Kuwait
BahrainKSA
Oman
Lebanon
Egypt
UAE est. population by Emirate3 (‘m)
4.10 3.33
1.53 0.95
0.67 0.38 0.19
AD Dubai Sharjah RAK Ajman Fujairah UAQ
NMC focus
UAE population
4.1m3.3m
2.5m
Abu Dhabi Dubai NorthernEmirates
Mostly
insured
Mostly
insuredMostly
uninsured
3.3
1.5 1.9
1.4 0.9
8.9
3.0 3.6
2.9 2.3
OECD UAE Dubai AD NE
Physicians Nurses
OECD Avg.
45%
36%
19%Basic
Enhanced
Thiqa
41
Life-style diseases a major problem in UAE
▪ Non-communicable diseases responsible for largest
number of deaths among individuals below the age of 70
years in UAE
▪ Key concerns include cardiovascular, diabetes,
cancer and obesity
▪ WHO estimates 20% of UAE population has diabetes and
another 18% is at risk
▪ High genetic disorder incidence in UAE due to interfamily
marriages
▪ WHO estimates that, in 2012, average neo-natal
mortality rate was 5, while average mortality rate of
babies under 5 years of age was 8
High incidence of life-style related diseases
41
Over 70% deaths due to non-communicable disease*
Source: WHO
*: for population under 70 years of age
High prevalence of physical inactivity*
Source: WHO
*: for population under 70 years of age
42
UAE has a weight problem
42
Over 60% of UAE male population is overweight
Over 20% of UAE male population is obese… … while over 30% of female population is obese
… as is the case for female population
Source: WHO
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