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  • August 2011

    Fortis HealthcareFortis HealthcareInvestor Investor Presentation Presentation –– Q1 FY2012Q1 FY2012

  • This presentation may not be copied, published, distributed or transmitted. The presentation has been prepared solely by the company.Any reference in this presentation to “Fortis Healthcare Limited” shall mean, collectively, the Company and its subsidiaries. Thispresentation has been prepared for informational purposes only. This presentation does not constitute a prospectus, offering circular oroffering memorandum and is not an offer or invitation to buy or sell any securities, nor shall part, or all, of this presentation form the basis of,or be relied on in connection with, any contract or investment decision in relation to any securities. Furthermore, this presentation is not andshould not be construed as an offer or a solicitation of an offer to buy securities of the company for sale in the United States, India or anyother jurisdiction.Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering in theUnited States may be made only by means of an offering document that may be obtained from the Company and that will contain detailedinformation about the Company and its management, as well as financial statements. Any offer or sale of securities in a given jurisdiction issubject to the applicable laws of that jurisdiction.

    Safe Harbor

    subject to the applicable laws of that jurisdiction.This presentation contains forward-looking statements based on the currently held beliefs and assumptions of the management of theCompany, which are expressed in good faith and, in their opinion, reasonable. Forward-looking statements involve known and unknownrisks, uncertainties and other factors, which may cause the actual results, financial condition, performance, or achievements of theCompany or industry results, to differ materially from the results, financial condition, performance or achievements expressed or implied bysuch forward-looking statements. Given these risks, uncertainties and other factors, recipients of this presentation are cautioned not toplace undue reliance on these forward-looking statements.The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of anysubsequent development, information or events, or otherwise. Unless otherwise stated in this presentation, the information containedherein is based on management information and estimates. The information contained herein is subject to change without notice and pastperformance is not indicative of future results. The Company may alter, modify or otherwise change in any manner the content of thispresentation, without obligation to notify any person of such revision or changes.By attending this presentation you acknowledge that you will be solely responsible for your own assessment of the market and the marketposition of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potentialfuture performance of the business of the Company.Neither the delivery of this presentation nor any further discussions of the Company with any of the recipients shall, under anycircumstances, create any implication that there has been no change in the affairs of the Company since that date.

    2

  • Discussion Points

    � Snapshot – Financial and Operational Performance

    � Highlights for the quarter

    3

    � Hospital wise performance

    � Update on projects

  • Highlights for the quarterHighlights for the quarter

    � Key Highlights :

    � Acquired strategic stake in Super Religare Laboratories (SRL) in line with our strategy to venture

    into new healthcare services verticals and integrate under one umbrella to drive synergies, improve

    quality and enhance reach

    � The Company completed a decade of providing high quality healthcare services and reaffirmed its

    commitment to creation of world class integrated healthcare delivery system , known for clinical

    excellence and distinctive patient care.excellence and distinctive patient care.

    � Network hospitals continue to register robust performance, overall growth at 6% over the trailing

    quarter and 24% over the corresponding quarter

    � 13th consecutive quarter of growth. 21 hospitals achieved highest ever quarterly revenue.

    � Mr Aditya Vij joined as the Chief Executive Officer of the Company. Mr. Vij brings along rich

    management experience spanning three decades in the corporate world

    � New Medical Programmes and Growth Initiatives:

    � Cardiac Programme was launched at S L Raheja hospital and a “Maternity and Child Care Center”

    was inaugurated during the quarter

    4

  • Highlights for the quarter… Highlights for the quarter…

    � Ground breaking ceremony for the Oncology Block at Fortis Mohali was held during the quarter.

    Once completed, the block would have 75 beds including ~30 ICU beds and 15 day-care beds

    � The Company launched an initiative christened ‘Medex Transformers’, in order to foster medical

    excellence through processes and people. Four focus areas under the initiative are Clinical

    Excellence, Process orientation, People emphasis and Customer satisfaction

    � Recently, the company consummated 5 deals thereby adding 950 beds to the capacity: Arcot� Recently, the company consummated 5 deals thereby adding 950 beds to the capacity: Arcot

    Road, Chennai, Kharadi, Pune and AB Road Indore.

    � Besides the above projects, the Company is also setting up a 450 bed tertiary care hospital in

    Hyderabad for which the land has already been allotted.

    � Operating bed capacity was ramped up by ~ 150 beds which includes Fortis Escorts Delhi (30

    beds), Fortis Mohali (28 beds), Fortis Noida (15 beds) and Fortis Mulund (40 beds)

    � Corporate Social Responsibility (CSR)

    � More than 125 free health camps were organized and ~ 33,000 people were scanned and free

    surgeries/procedures (costing ~ Rs 1.10 Cr) were performed during the quarter.

    5

  • Total CapacityOperational

    BedsNo. of Hospitals

    Category wise

    Owned 4,646 2,931 21

    Managed 1,796 1,010 28

    Projects 3,295 - 13

    Grand Total 9,737 3,941 62

    Region wise

    North 4,568 2,067 29

    South 2,219 663 13

    Presence across - 16 States- 34 Cities

    Deep pan India presenceDeep pan India presence

    Not included in above map are international hospitals,

    Owned Facility

    Managed Facility

    2,219 663 13

    West 1,870 725 8

    East 940 356 9

    International 140 130 3

    Grand Total 9.737 3,941 62

    Maturity wise

    More than 5 years

    766 600 4

    3 to 5 years 2,806 1,950 27

    1 to 3 years 851 616 8

    Less than 1 year 2,019 775 10

    Projects 3,295 - 13

    Grand Total 9,737 3,941 62

    Heart Command

    Centers (HCCs)

    Projects

    6

  • 338

    483

    413

    573

    400

    500

    600 � Q1FY 12 – Consolidated

    � Operating Revenue - Rs. 483 Cr ���� 43%

    � Operating EBITDA* - Rs. 62 Cr ���� 27%

    � Net Profit - Rs. 14 Cr ����

    Snapshot Snapshot –– Financial PerformanceFinancial Performance

    Rs. in Cr.

    Statutory Q1FY11 Q1FY12*

    Occupancy 76% 70%

    +43% +39%

    0

    100

    200

    300

    Consol Network

    Q1 FY11 Q1 FY12

    7

    � Q1FY12 – Network revenue

    � Overall (incl diagnostics) -Rs. 573 Cr ���� 39%

    � Network hospitals -Rs. 511 Cr ���� 24%

    � Hospital (Consol) -Rs. 421 Cr ���� 25%

    � Diagnostics (Consol) -Rs. 62 Cr

    Occupancy 76% 70%

    ARPOB (Annualized - Rs.

    Lacs) 83 87

    ALOS (Days) 4.1 3.9

    *Operating bed capacity up by 150 beds during the quarter

  • Financial Highlights of the quarterFinancial Highlights of the quarter

    � Hospital Business

    � Hospital network revenue at Rs 511 Cr. This includes revenue from International Patients - Rs 31.4 Cr (+51%

    q-o-q) (6.4% of hospital network revenue).

    � Newly commissioned hospitals performed well and clocked revenue of ~Rs 27 Cr which includes Fortis

    Shalimar Bagh, New Delhi and Fortis Anandpur, Kolkata

    � On a Network-wide basis, the revenue from Cardiac sciences Orthopaedics, Neurosciences, Renal sciences,

    Pulmonology, Gastroenterology and other multi-specialities grew by 15%, 42%, 24%, 41%, 16%, 56%, 46%

    and 32% respectively

    � A restructuring of group entities is underway whereby the holding structure is being rationalized/simplified to

    improve governance, make radiology and OPD as a separate business vertical and ensure that tax

    incentives offered by GOI are optimally utilized for the new hospitals.

    � Diagnostics Business

    � Operating revenue for the post-acquisition period (~7 weeks), stood at Rs 62.3 Cr. Overall quarterly revenues

    for the business were Rs 123 Cr

    � Operating EBITDA of SRL for the period under consideration stood at Rs 9 Cr, a margin of 14.3%. For the full

    quarter, operating EBITDA is reported at Rs 16.8 Cr

    � SRL reported net loss of Rs 1 Cr for the period under consideration, after an interest costs of Rs 6.0 Cr

    8

  • Hospital wise Revenue & Operating margins Hospital wise Revenue & Operating margins –– Q1FY12Q1FY12

    7579

    52

    62

    60

    70

    80

    90

    21%

    16%

    25%5%

    17%

    14%

    36%

    17%

    Rs Cr.

    16%

    9

    52

    38

    45

    31

    39

    31

    36

    2832

    19

    26

    19

    22

    15 17

    0

    10

    20

    30

    40

    50

    FEHI Mohali Noida Mulund B G Road Vasant Kunj Jaipur Malar Amritsar

    Q I FY11 Q I FY12

    17%

    18%

    24%

    22%

    22%

    26%

    26%

    24%

    21%

    26%

    13% 15% 14%

    The above chart depicts revenue of hospitals managed by Fortis healthcare and its subsidiaries.

    23% 27%

    20%

    22%

    22%

    22%

  • MaturityMaturity--wise Performance wise Performance –– Q1FY12: Main HospitalsQ1FY12: Main Hospitals

    MaturityRevenue

    Contribution EBITDA

    Contribution

    Average

    EBITDA margin *

    Average Occupancy

    Average ARPOB (Rs

    Cr)

    5 Years and Above (Four hospitals)

    24% 33% 21.7% 79% 1.14

    14% of operating beds aged 5

    years and above contributes

    24% to revenue

    50% of operating beds are 3

    to 5 years of age and 3 years to 5 Years (NineHospitals)

    55% 67% 19.5% 74% 0.78

    One to three Years (Eight Hospitals)

    12% 5% 6.3% 57% 0.73

    Upto one year (Three Hospitals)

    9% (4%) (7.5%) 38% 0.72

    * Average EBITDA margin has been calculated on Unit basis

    to 5 years of age and

    contributes 55% to revenue

    16% of operating beds are 1 to

    3 years of age and contributes

    12% to revenue

    20% of operating beds are up

    to 1 year of age and contributes

    just 9% to revenue

    10

  • Summary Summary –– Consolidated Profit and Loss Consolidated Profit and Loss –– Q1FY12Q1FY12

    Q1FY12 Q1FY11

    Particulars Hospital Diagnostics

    Total business(Rs Cr.)

    Total Business(Rs Cr.)

    Growth (%)

    (Rs Cr.) (Rs Cr.)

    Operating Revenue 421.2 62 483.2 337.9 43%

    Direct Costs 111.7 19.5 131.3 93.5 40%

    Employee Costs 78.9 13.0 91.9 62.7 47%

    11

    Employee Costs 78.9 13.0 91.9 62.7 47%

    Other Costs 177.7 20.8 198.5 134.1 48%

    Operating EBITDA* 52.9 8.9 61.8 47.6 30%

    Other Income 19.5 1.4 20.9 33.7

    Finance Costs 24.1 6.0 30.1 70.9

    Depreciation & Amortization 28.8 5.7 34.5 21.5 60%

    PAT after minority interest and share in associates

    15.1 (1.1) 14.0 (14.3)

  • Hospital Business: Base OperationsHospital Business: Base Operations

    Particulars Q1FY12

    (Rs Cr.)%

    Q1FY11

    (Rs Cr.)% Growth (%)

    Operating Revenue 421.2 100% 337.9 100% 25%

    Direct Costs 111.7 27% 93.5 28% 19%

    Employee Costs 78.9 19% 62.7 19% 26%

    Other Costs 177.7 42% 133.1 39% 34%

    Operating EBITDA* 52.9 13% 48.5 14% 9%

    Other Income 19.5 5% 10.7 3% 82%

    Finance Costs 24.1 6% 13.1 4% 84%

    Depreciation & Amortization 28.8 7% 21.5 6% 34%

    PAT after minority interest and share in associates

    15.1 4% 21.6 6% -30%

    12

    *EBITDA margin is after considering initial start-up losses of new hospitals and one-time restructuring costs (~7 Cr). On a like to

    like basis Operating EBIDTA stood at Rs 60 Cr (14.9% margin).

    Further, Net Profit on comparable basis stood at Rs 29 Cr

  • 1029 1374

    1630

    2047

    2,622 2,625

    2,314 2,937

    6,380 7,049

    909 1,377

    CTVS & Pediatrics PTCA CAG Others

    No. of Procedures No. of Procedures –– Q1FY2012Q1FY2012

    +14% +29%Cardiac Ortho

    12,22513,988

    3,421

    2,659

    0

    10000

    20000

    Q1FY2011 Q1FY2012

    15636

    23055

    Dialysis

    1000

    1100

    1200

    1300

    1400

    Q1FY2011 Q1FY2012

    1152

    1340

    Neuro

    Knee Replacements THR & OthersCTVS & Pediatrics PTCA CAG Others

    13

    +16% +47%

  • Revenue Split

    QIFY 11 QI FY12

    Cardiac

    Sciences

    40%

    OPD and

    Others 15%

    14

    40%

    Ortho 7%Neuro 5%

    Renal 3%

    Pulmo 1%

    Oncology 4%

    Gastro 2%

    Multi-

    Specialties

    23%

    Dependence on Cardiac Sciences has come down. At the same time, Orthopedics

    & Renal Sciences share has gone up at the back of Joint replacement and Kidney

    transplant programmes

  • Upcoming Greenfield Hospitals in IndiaUpcoming Greenfield Hospitals in India

    No. Location BedsArea & Land Ownership

    Date of Commencement

    Estimated Capex (INR Cr)

    Status

    1 Kangra 100 37,000 sq. ft., B. Lease Q2 FY12 24

    •Medical equipment is being installed

    •Facility will be launched in Q2FY12

    2 Dehradun 5027,000 sq..ft., Public Private Partnership

    Q2FY12 15•Civil construction work of the hospital building is complete

    •Interior work, installation of utility

    ** Only for Phase – 1, total size of the project is 1000 beds

    3 Gurgaon 450** 11 Acres, Owned Q4 FY12 325

    •Interior work, installation of utility equipment & external devlpt. underway.

    •Medical equipment under order

    •Rs 214 Cr has been spent till June’11.

    4Richmond Road, Bangalore

    100 52,000 sq.ft., B Lease Q1 FY 13 35•Cold Shell, under modification to suit

    to a hospital

    5 Ludhiana – 1 200 1,55,000 sq. ft., B. Lease Q2 FY13 50•Construction in full swing. Casting of columns in progress•Project on schedule

    6 Chennai 200 138,000 sq.ft., B Lease Q2FY13 92•Cold Shell, under modification to suit

    to a hospital

    7 Ludhiana – 2 75 60,000 sq ft. B. Lease Q3FY 13 20•Approval from govt. authorities received; design work underway

    15

  • Upcoming Greenfield Hospitals in India Upcoming Greenfield Hospitals in India

    No. Location Beds Area & Land OwnershipDate of Commencement

    Estimated Capex (INR Cr)

    Status

    8Peenya, Bangalore

    120 ~70,000 Sq ft; B. Lease FY13 18 •Construction work underway

    9 Pune 350 252,000 sq.ft., B Lease FY13 63•Cold Shell, being modified for a tertiary

    care facility9 Pune 350 252,000 sq.ft., B Lease FY13 63

    care facility

    10 Gwalior 200 2.5 Acres, L. Lease FY14 72•CLU permission received; building approval by the local authorities and high rise committee underway

    11 Ahmedabad 200 1,55,000 sq. ft., B. Lease FY14 50•Approval from govt. authorities for CLU underway

    12 Indore 250 175,000 sq.ft., B Lease FY14 50•Build to suit arrangement; CLU obtained

    and building plans being firmed up

    13 Hyderabad 450 300,000 sq.ft., Owned FY15 210•Greenfield hospital, possession of land

    being taken over, Architectural plans being

    firmed up

    Total 2,745 1,024

    16

  • Balance Sheet as at June 30, 2011Balance Sheet as at June 30, 2011

    Balance Sheet Rs Crore

    Shareholder’s Equity* 3,441

    Foreign Currency Convertible Bonds (FCCB’s) 454

    Debt 1,628

    Total Capital Employed 5,522

    Goodwill 1,906 Goodwill 1,906

    Net Fixed Assets (including CWIP of Rs 344 Crore) 2,291

    Investments

    - in Associates 8

    - Deposits (including Inter-Corporate Deposits) 662

    - Liquid and Mutual Funds 27

    Cash and Bank Balances 130

    Net Current Assets** 499

    Total Fixed Assets 5,522

    Net Debt ( 0.21 :1 ) 808

    * Shareholder’s Equity is inclusive of Revaluation Reserve and Minority Interest** Net Current Assets includes Deferred Tax Assets*** Net Cash Surplus excludes FCCB’s

    17

  • Thank You…Thank You…

    18

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