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Bumrungrad Hospital Public Company Limited Investor Presentation PG.1 Investor Presentation August 2011
Bumrungrad Hospital Public Company LimitedInvestor Presentation
PG.1
Investor Presentation
August 2011
DisclaimerThe information contained in this presentation is for information purposes only and does not constitute an offer or invitation to sell or theThe information contained in this presentation is for information purposes only and does not constitute an offer or invitation to sell or thesolicitation of an offer or invitation to purchase or subscribe for any securities of Bumrungrad Hospital Public Company Limited (the"Company") in any jurisdiction nor should it or any part of it form the basis of, or be relied upon in connection with, any contract orcommitment whatsoever.
This presentation is being communicated only to persons who have professional experience in matters relating to investments and/or toThis presentation is being communicated only to persons who have professional experience in matters relating to investments and/or topersons to whom it is lawful to communicate it under the laws of applicable jurisdictions. Other persons should not rely or act upon thispresentation or any of its contents.
Certain information and statements made in this presentation contain the Company's forward‐looking statements. All forward‐lookingh C ' i f f d bj b f f h ld l lstatements are the Company's current expectation of future events and are subject to a number of factors that could cause actual results
to differ materially from those described in the forward‐looking statements. Prospective investors should take care with respect to suchstatements and should not place undue reliance on any such forward‐looking statements.
This presentation has been prepared by the Company solely for the use at this presentation. The information in this presentation has notbeen independently verified. No representation, warranty, express or implied, is made as to, and no reliance should be placed on, thefairness, accuracy, completeness or correctness of the information and opinions in this presentation. None of the Company, any of itsaffiliates or any of their respective agents, advisors or representatives, shall have any liability (in negligence or otherwise) for any loss ordamage howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. Theinformation presented or contained in this presentation is current as of the date hereof and is subject to change without notice and itsinformation presented or contained in this presentation is current as of the date hereof and is subject to change without notice and itsaccuracy is not guaranteed. None of the Company, any of its affiliates or any of their respective agents, advisors or representatives,makes any undertaking to update any such information subsequent to the date hereof.
This presentation should not be construed as legal, tax, investment or other advice. No part of this presentation shall be relied upondirectly or indirectly for any investment decision‐making or for any other purposes Prospective investors should undertake their owndirectly or indirectly for any investment decision‐making or for any other purposes. Prospective investors should undertake their ownassessment with regard to any investment and should obtain independent advice on any such investment’s suitability, inherent risks andmerits and any tax, legal and accounting implications which it may have for them.
Certain data in this presentation were obtained from various external data sources, and none of the Company, any of its affiliates or anyof their respective agents advisors or representatives have verified such data with independent sources Accordingly the Company
PG.2
of their respective agents, advisors or representatives have verified such data with independent sources. Accordingly, the Companymakes no representation as to the accuracy or completeness of those data, and such data involve risks and uncertainties and are subjectto change based on various factors.
Agenda
Overview
Bumrungrad International Hospital, Bangkok
Bumrungrad International Limited
PG.3
Fact SheetWith 30 t k d BH i th l di h lth i id i S th E t A i i
•Established in 1980; listed on SET in 1989
•Major operations divided into Bangkok facility and international business
With a 30‐year track record, BH is now the leading healthcare service provider in South‐East Asian region
Bangkok Facility
Facilities
One of the largest and most sophisticated private hospitals in South‐East Asiain South East Asia
538 licensed inpatient beds and over 4,000 outpatient capacity per day
Thailand’s leading tertiary medical center
Accreditation
Shareholding Structure
Bangkok Bank Pcl., 1 08%
Sinsuptawee AM, 8 68%Accreditation
1st hospital in Asia to receive US JCI Accreditation
1st private hospital in Thailand with Thai Hospital Accreditation
Patients Thai NVDR 11 66%
1.08% 8.68%
Bangkok Insurance Pcl. , 14.46%
Patients
Over one million patients treated annually
International following with over 400,000 international patients from 190 countries
Services As of March 2011
Others, 44.69%
UOB Kay Hian (HK) - Client Account ,
8.29%
Bangkok Dusit Medical Services
Pcl., 11.14%
Thai NVDR, 11.66%
* 14 22% as disclosed in 2Q11
*
Services
34 specialist centers
International Presence
Asian Hospital Inc. in the Philippines with 217‐bed capacity
M f H it l bli h it l i Ab Dh bi ith 463 b d
* 14.22% as disclosed in 2Q11 reviewed financial statement
PG.4
Mafraq Hospital, a public hospital in Abu Dhabi with 463 beds (management contract)
Group Structure
Core business of BH is the renowned Bumrungrad International Hospital, Bangkok
Bumrungrad Hospital Public Company Limited (“BH”)
Operates Bumrungrad International Hospital, Bangkok
Vitallife Corporation Ltd.(“Vitallife”)
100.0% 31.5%
BumrungradInternational Ltd.*
100.0%
Asia Global Research Co., Ltd.(“AGR”)
Bangkok Chain Hospital PCL doing business as Kasemrad
Hospital Group
24.99%
Private HospitalsComprehensive wellness center specializing in preventive care
56.5%
ManagementContract
International business Clinical research
Asian Hospital Inc.(“AHI”)
* St t i t f B d I t ti l Li it d
Mafraq Hospital
* Strategic partners of Bumrungrad International Limited are:‐ Istithmar 19.5%‐ Temasek 19.5%‐ Asia Financial Holding 19.5%‐ Bangkok Bank 10.0%
PG.5
Note: As of August 2011
Management Team
BH’s management team comprises individuals with extensive experience in healthcare management
K. Linda LisahapanyaManaging Director
Dr. Sinn AnurasGroup Medical Director
Mr. Dennis BrownCorporate CEOp
Mr. Dennis BrownCEO
Bumrungrad International Ltd.
Mr. Mack BannerCEO
Bumrungrad International, Bangkok
Mr. Anthony TanCEO
Vitallife Corporation Ltd.
Dr. Suthipong TreeratanaCEO
Asia Global Research Co., Ltd.
PG.6
Agenda
Overview
Bumrungrad International Hospital, Bangkok
Bumrungrad International Limited
PG.7
BH’s Core Attributes
Bangkok Flagship Facility Quality Operational Competitiveness
•1st hospital in Asia to receive US JCI Accreditation (since 2002)•JCI ‘Disease‐Specific’ certifications:
•Efficient workflow with comprehensive hospital management system
•Over past two years, completed renovation of inpatient facilities and increased capacity with new
heart and stroke programs (2006), diabetes and kidney programs (2010)•1st private hospital in Thailand with Thai Hospital Accreditation (since 1999)•1st private hospital to receive Thailand
system •1st hospital in Asia to implement: − robotic pharmacy dispensing system − automated laboratory system
and increased capacity with new outpatient facilities•Emphasis on physician recruitment & program development
•1st private hospital to receive Thailand Quality Class standard (2008) ‐ based on US Baldrige Award
•Recognized as leading desired employer and innovative provider
•Ongoing marketing initiatives directed towards Thai and International patients
Medical Tourism Financial Strength Selective Growth
•More experience treating international patients with over 400,000 international patients from
•Proven long‐term revenue & profit growth•Stable margins and strong cash flow
•Opportunities for growth: − Operationalize recently expanded
capacity, p200 countries•Diverse international patient base, with 40% international volume •Established specialized international
g g•Strong financial metrics (as at June 2011);
−Net debt to EBITDA 1.05x−Net debt to equity 0.51x
p y− International investments ‐
Bumrungrad International Limited
− Complementary businesses, services to accommodate international patients
−ROA 13.5%−ROE 24.7%
wellness & anti‐aging through Vitallife & VitechPro
PG.8
Certifications and Awards
Thailand Tourism Award: “Award of Outstanding Performance in Medically‐Oriented Establishment” by The Tourism Authority of Thailand Best Practice Workplace Award on Labor Relations and Labor Welfare Award 2010 by the Ministry of LaborThailand’s Top 10 Most Innovative Companies 2010 By Chulalongkorn University’s school of business
2010:
Thailand s Top 10 Most Innovative Companies 2010 By Chulalongkorn University s school of business Prime Minister’s Export Award 2010 for Best Service Provider (Hospital Service)JCI ‘Disease‐Specific’ Certifications: Diabetes Mellitus and Chronic Kidney DiseaseWall Street Journal Award Recognition: top 10 most admired companies overall, quality and corporate reputation
2009:
nd Awards Best Practice Workplace Award on Labor Relations and Labor Welfare Award 2009 by the Ministry of
Labor“Growth Excellence Awards” by Frost & Sullivan “Growth Excellence Awards” by Frost & Sullivan 2009 “Thailand’s Top 10 Most Innovative Companies” award By Chulalongkorn University’s school of business
ications an
1st private hospital to receive Thailand Quality Class standard ‐ based on US Malcolm Baldrige Award1st hospital to win Award of Excellence, healthcare tourism category, 2008 Thailand Tourism Award Wall Street Journal Award Recognition Rank No.1 –Most Admired Thai CompaniesAward of Excellence, Outstanding Achievement and Special Recognition in Applied Medical Informatics2008
2008:
Certifi 2008
Best Website for International Medical Travel awarded at 2008 Consumer Health World Awards, USAThailand Most Innovative Company By Chulalongkorn University’s school of businessThailand’s “Best Small Cap Company” 2008 awarded by Hong Kong‐based Asiamoney magazineMost Desirable Companies to Work for in Thailand, Rank 7 for overall and Rank 1 in healthcare, by Business.com MagazineCompany with very good corporate governance scoring by Thai Institute of Directors Association
2007: Received ISO 15189 (Medical laboratory certification )2006: JCI ‘Disease‐Specific’ certifications: Heart and Stoke programs2002: 1st hospital in Asia to receive US JCI Accreditation
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p2001: Received ISO 14001 for environmental management and was 1st hospital in Asia to receive ISO 9001:20001999: 1st private hospital awarded Thailand Hospital Accreditation (HA) and received ISO 9002:1994
World Class Inpatient FacilitiesRenovation of all rooms completed in May 2010
Inpatient experience offers hotel‐like ambience and room design
i i i f−Priority on patient safety−Less “clinical” feeling−Warm and restful environment
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Expanded Outpatient FacilitiesNew OPD Tower with similar high quality ambience opened in June 2008
Clinic area design enhances privacy, in a pleasant and calming environment, with efficient workflows
Sky Lobby
Ground Floor LobbyWelcome Center
New Clinics
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Strategy
•Focus on physician recruitment and targeted specialties
•Domestic marketing efforts include advertisements, fairs, and packages
•International marketing through multiple channels•Proven growth with increasing penetration in
•Selectively pursuing overseas expansion –Bumrungrad International Limitedp g g p
referral markets •Extend success in wellness, anti‐aging and other complementary business lines
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Operating Performance 2006‐2010Total Revenue EBITDATotal Revenue EBITDA
1,946 2,070 2,155 2,2592,452
2 000
2,500
3,000
mn)
6% CAGR829
7,8968,559
8,882 9,33810,069
8,000
10,000
12,000
HB
mn)
6% CAGR9,388
,
500
1,000
1,500
2,000
EBIT
DA
(TH
B m
2,000
4,000
6,000
Rev
enue
s (T
H
02006 2007 2008 2009 2010
02006 2007 2008 2009 2010
BH reported a one-time gain on share of profit in investment in CDE Trading (previously GCS Thailand) in 2007 of THB 829 million, mainly from sale of GCS Thailand’s assets
Net Income
4581 096
1,191 1,24663
1,500
2,000
HB
mn)
4% CAGR
DILUTED EPS
1 37 1.440 56 0.071.5
2.0
B)
4% CAGR1,603 1.85
1.521,321
1,1451,096 1,258
500
1,000
Net
Inco
me
(TH
1.261.29
1.37 1.441.45
0.56 0.07
0.5
1.0
Dilu
ted
EPS
(TH
B
02006 2007* 2008 2009 2010** 0.0
2006 2007 2008 2009 2010*One-time profit of THB 458 million in 2007 was share of profit in investment in GCS Thailand, netted off with impairment of hospital software system** One-time loss of THB 63 million in 2010 was loss on the translation adjustment from the sale of Asia Renal Care (ARC) Group
PG.13
Margins & Trend
Net Profit Margin Trend
30%
EBITDA Margin Trend
24 4%30%
13.3% 12.5%13.3%
17.1%13.9%
10%
20%
24.2%24.7% 24.3% 24.2% 24.4%
20%
0%
10%
2006 2007* 2008 2009 20100%
10%
2006 2007 2008 2009 2010
M i h b t d l ti l t bl ti
*Net margin in 2007 includes the benefit of one‐time non‐operating items2006 2007 2008 2009 2010
Margins have been strong and relatively stable over time
PG.14
1H11 Update
3,000 40%
EBITDAEBITDA Margin
Total Revenue
5,6535,600
5,800
EBITDA
THB millionTHB million16%
1,5061,159
23.9%26.7%
1,000
1,500
2,000
2,500
10%
20%
30%
4,8594,800
5,000
5,200
5,40030%
0
500
1H10 1H110%
10%
4,400
4,600
4,800
1H10 1H11
Net Income
THB million
50810900 25%
Net Profit excl extra itemsNet Profit Net Profit Margin excl extra itemsNet Profit Margin
Higher growth of net profit compared to growth of total revenues was driven by a lower rate of increase in cost of hospital operations and
35%
63
50
600
14.3%12.3%400
500600700800
15%
20%
Net Profit Margin increase in cost of hospital operations and administrative expenses.42%760
537
11.0%13.4%
0100200300
1H10 1H115%
10%
PG.15
Dividend Payment
Dividend Payment
1.00Bt per share The board of directors announced the dividend
payment with details as follows:0 75 0.80 0.850.80
0.90
0.450.40 0.40 0.45 0.50
0.40
0.60
0.80
FinalInterim
• Dividend payment for the year 2010 of Bt 0.90 per share
• Interim Dividend payment for the year 2011 of Bt 0 45 per share
0.75
0.400.400.400.400.30
0.00
0.20
2006 2007 2008 2009 2010
Bt 0.45 per share
Payout Ratio
80%
49.0%50.0% 49.0% 49.8% 52.0%
40%
60%
0%
20%
2006 2007* 2008 2009 2010
* Net profit used to calculate the dividend payout ratio in 2007 is:2007 net profit Baht 1,605 million-share gain from GCS - Baht 829 million-+ dividend received from GCS + Baht 418 million= Net profit for dividend payment Baht 1,195 million
PG.16
Leverage
xInterest Coverage
35.940x
1 05
1.50
Net Debt to EBITDAx
18.820.6
24.8
17.7 18.720
30
0.690.55
0.37
1.05
0.590.450.50
1.00
0
10
2006 2007 2008 2009 2010 1H11*
0.00
2006 2007 2008 2009 2010 1H11
• Net debt to EBITDA and Net debt to Equity ratios were higher due to an increase in Bt 3,570 million short‐term loans from the purchase of common shares of Bangkok
Net Debt to Equityx
0.510.60
Chain Hospital PCL doing business as Kasemrad Hospital Group on 18 March 2011.
• Interest expense related to the purchase of common shares
0.31
0.23
0.15
0.27 0.28
0.20
0.40
of Kasemrad Hospital Group to calculate interest coverage ratio was Bt 36.2 million based on remaining days in the period after the transaction settled.
•
0.00
2006 2007 2008 2009 2010 1H11
PG.17
• If we assumed impact for the full period, interest expense from this transaction will be Bt 65.5 million and interest coverage ratio will be 10.9x
Overall Volume Trend
• Compared to Q2’10, total visits per day
increased by 24.4%, total admissions per day
i d b 25 7% lt f i
Total Visits per Day
Visits 1.6% 12.6% 8.8% 2.4%
2 8372 889
24.4%2.8%
increased by 25.7% as a result of surge in
international patients and political unrest
during Apr‐May’10.
2,313
2,7592,6942,6542,6452,715 2,8772,8372,7592,889
2,313
2,759
2,000
3,000
• ADC increased by 14.4% which is lower than
the growth rate of admission due to the shorter
length of stay.0
1,000
1Q 2Q 3Q 4Q 1Q 2Q2009 2010 20112009 2010 2011
10011.1% 2.0% 2.4%
Average Daily CensusADC
400
12.9% 5.3% 13.4% 1.1%Admissions
14.4%
Total Admission per Day
2.4%
8073
79 79 81
64
81
64
8877
83 80
100 2.0% 12.1%315
290317 318
355
305
355
305
359322
347 349
200
300
40025.7%
01Q 2Q 3Q 4Q 1Q 2Q
2009 2010 2011
0
100
1Q 2Q 3Q 4Q 1Q 2Q
2009 2010 2011
PG.18
2009 2010 0 2009 2010 2011
Revenue Intensity
• Revenue per visit growth resulted
from increased consumption in
outpatient ancillary services and
Revenue per Visit
5.9%Bt 6.3% 4.8% 2.8% 8.2%5.4%
5 304 5 4445,671 5,5385,671
5 538 5 465 5,596 5,976 5,9936,000 outpatient ancillary services and
annual price adjustment.
• For Q2’11, the drop in revenue per
5,304 5,209 5,217 5,444 5,5385,538 5,465
4,000
admission is due to the unusual 2Q10
• Basis of calculating Revenue per Visit
has been refined to include0
2,000
has been refined to include
consolidated results, rather than
hospital operations only, and
hi t i l d t i dj t d di l
Revenue per Admission
2011
3 4%
1Q 2Q 3Q 4Q 1Q 2Q2009 2010
historical data is adjusted accordinglyBt15.9% 22.0% 1.3%
166,326 174,619 169,899 175,699192,846
213,041192,846 213,041
172,043 181,527199,321 205,814
180,000
240,0003.3% 3.4% 3.4%
60,000
120,000
PG.19
01Q 2Q 3Q 4Q 1Q 2Q
2009 2010 2011
Revenue Breakdown
Inpatient vs. Outpatient (% of revenue) Method of Payment (% of revenue)
Corporate
Corporate Contracts -
OutpatientInpatient
Insurance13%
Corporate Contracts - Intl
8%
Domestic9%
50% 49% 50% 50% 51% 51%75%
100%
p
Self-pay70%
49%50% 51% 50% 50% 49%
0%
25%
50%
YTD Jun11
• Revenue contribution from outpatient service increased to 51% in 2Q11
70%0%1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
p Q
• Revenue breakdown in 2Q11: Outpatient revenue growth of 35% y‐o‐y
Inpatient revenue growth of 21% y‐o‐y
• Revenue by method of payment:
− Self‐pay remains the primary method of payment
− Increasing trend on international corporate contracts
PG.20
g p
International Breakdown
Revenue Contribution by Nationality• For Q2’11, International revenue was up 37.8%
from Q2’10, primarily from volume growth.45%46%44% 40% 39%39%80%
100%
•Top 5 revenue contribution countries (1H11)
55%54%61% 61%60%56%
45%46%44% 40% 39%39%
40%
60%
80%
% o
f Rev
enue
UAE 12%55%54%56%
0%
20%
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
%
International Thais
USA 6%
Myanmar 5%
Oman 4%
Volume Contribution by Nationality
100%
International Thais Oman 4%
Bangladesh 3%
57%58%61% 55% 55%55%
40%
60%
80%
f Vol
ume
43%42%45% 45%39% 45%
0%
20%
40%
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
% o
f
PG.21
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
International Thais
Strategy
BI Bangkok
• Master Plan
Thailand
• Invest into Mid‐Tier
International
• Seller’s market in • Physician Recruitment Market
• Expand BI Brandcountries with established private sector
• Reviewing small ginvestments in emerging markets
• Plan to open 5 clinic floors at Bumrungrad International Clinic in 2012Outpatient Service
• Plan to add about 28 ICU beds in Bumrungrad Hospital BuildingInpatient Service Bumrungrad Hospital Building
• Baht 1 1bn through mid‐2012CAPEX
PG.22
Baht 1.1bn through mid 2012CAPEX
Kasemrad Hospital Group (KH)
KH’s 2Q11 reported net profit was Baht 174 million, a 27% increase from Baht 137 million of 2Q10. For 1H11, Net profit was Baht 317 million, a 5% increase from Baht 302 million in 1H10.
BH recognized KH’s share of income in 2Q11 as the table below.
(‘000 THB)
KH’s net profit in 2011 174,233
BH % 24.99%
Share of income from KH 43,541
The Company did not recognize the share of income of Baht 3.6 million from Kasemrad Hospital Group in 1Q11
On 8 August 2011, KH declared interim dividend of Baht 0.10 per share. BH will receive cash dividend of Baht 49.9 million on 9 September 2011.
PG.23
Agenda
Overview
Bumrungrad International Hospital, Bangkok
Bumrungrad International Limited
PG.24
Asian Hospital, the Philippines (AHI)
Facts & Figures:Ownership (by Bumrungrad International Limited):from conversion of management fees into equity & and new capital injection
@ i iti 43 0%
•2002: Opened as a private hospital, one of the largest in the southern Luzon corridor of
t lit M il th Phili i
@ acquisition 43.0%@ present 56.5%
Amount and year invested: (by Bumrungrad International Limited)2005 USD 10 millionmetropolitan Manila, the Philippines
•Feb 2005: Acquired by Bumrungrad International Limited
•2011:
2005 USD 10 million2008 USD 7 million
Other shareholders: Dr. Garcia 8.2%
− A 217‐bed private hospital− Since the acquisition, the hospital has turned
around and became profitable in 2007
Insular Life 11.8%Filinvest 8.3%Others 15.3%
− With the hospital operating at near full utilization, AHI is undergoing expansion of
both inpatient and outpatient capacity, including an increase to a total of 300 350including an increase to a total of 300‐350 beds over time
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Mafraq Hospital, Abu Dhabi, U.A.E.
• Management contract signed with the Health
Authority of Abu Dhabi for 4 years, 2007 ‐
2011
• Inpatient capacity of 463 acute care beds, 33 critical care beds and 14 Neonatal intensivecritical care beds and 14 Neonatal intensive
care beds
• Patient volume of over 280,000 patients,
i l di th 17 000 i ti tincluding more than 17,000 inpatients
annually
• Simultaneously, a new modern hospital
building is being constructed on an adjacent
site that will replace the current facility
PG.26
Updates on Bumrungrad International Limited
• AHI’s profitability continues C t ti f 14 t h ll f th b ildi h b l t d• Construction of new 14‐story shell of the building has been completed;
funding by internal cash & debt• Construction of nursing floors will be completed in 3Q11
• Able to meet KPIs and is entitled to incentive fees
PG.27
