Max India Limited Investor Presentation November 2017 www.maxindia.com
Max Group Vision “To be the most admired corporate for service excellence” • Positive social impact • Culture of Service Sevabhav • Helpfulness • Mindfulness • Expertise • Entrepreneurship Excellence • Dependability • Business performance • Transparency • Respect Credibility • Integrity • Governance 1
Evolution of Max Group — Strong history of entrepreneurship and nurturing successful businesses Max India demerged into NYL exits and JV with Fund raising ~ USD 360 Mn 3 listed hold cos MSI in 2012 ● QIP- USD 156 Mn in 2007 Enters Telecom in JV ● MSI is world’s 7th largest with Hutchison ● Warburg Pincus - 53 Mn in 2005 general insurance group ● IFC- 47 Mn(2007) &23 Mn (2009) Hutchison ● MSI acquired 26% stake for USD 425 Mn ● Goldman Sachs 82 Mn in 2011 JV with Gist Brocades ● Max Life valued at USD 1.6 (Asia’s largest Drug bn manufacturer ) 2015 1985 1993 2000 2011 2012 2013 2014 2005 2007 2009 2016 Forays into LHC inducted as JV Landmark Acquisitions Penicillin Partner in MHC by MHC bulk pharma ● LHC is 2 nd largest hospital ● Acquired 79% stake for Shift from B2B to Enter Senior chain in South Africa USD 40 Mn in 340 bedded B2C businesses: Living business, Health Insurance, ● 2012 - Acquired 26% stake Pushpanjali hospital launch first expandable upto 540 beds for USD 81 Mn in MHC ● Life insurance JV with Bupa Plc community in ● Acquired 51% stake for ● 2014 - Equalize stake in ● Healthcare Dehradun with USD 100 Mn in 230 MHC invests USD 120 Mn 200 units bedded Saket City ● Clinical research hospital, expandable upto 1200 beds Note: Conversion rate assumed 1 USD = INR 64 2
Max Group – Corporate Structure Max Group - Sponsors 30.3% 41.1% 38.1% Companies Holding Health & Allied Manufacturing & Life Insurance Business Other businesses Business* 51% 50% 70% Operating Companies 100% 51% 100% 100% 100% Group CSR Arm Sponsors stake in Max Group holding companies 3
Max Group Overview USD 2.6 billion+… 9 Mn Customers… 23,000 Employees… ~68 ,000 Agents… 1 2,850 Doctors… 2 Strong growth trajectory even in challenging times; a resilient & diversified business model 3 Steady revenue growth and cost rationalization leads to strong financial performance Well established board governance….internationally acclaimed domain experts inducted 4 Diversified ownership…..marquee investor base 5 6 Superior brand recall with a proven track record of service excellence 7 Strong history of entrepreneurship and nurturing successful business partnerships 4
Max Group : Continues to grow from strength to strength Group Revenue (USD Mn) 2,625 2,225 1,944 1,664 1,465 FY'13 FY'14 FY'15 FY'16 FY'17 Group EBITDA (USD Mn) 160 112 97 82 69 FY'13 FY'14 FY'15 FY'16 FY'17 5
Max India: High pedigree investor base Shareholding concentrated with Marquee Investors Shareholding Pattern ▪ Ward Ferry as on Sep 30, 2017 0.0% 0.0% ▪ International Finance Corporation 0.0% 0.0% ▪ Government of Singapore Others ▪ Target Asset management 13.7% ▪ New York Life Insurance ▪ Comgest Promoters Mutual ▪ Nomura Singapore 41.0% Funds ▪ Goldman Sachs 22.9% ▪ Reliance Mutual Fund ▪ HDFC Standard Life Insurance IFC FII/ FPI ▪ DSP Black Rock Mutual Fund 3.1% 19.3% ▪ L&T Mutual Fund ▪ UTI Mutual Fund ▪ Mirae Mutual Fund Number of outstanding shares* : 26.84 Cr. * Max Group Sponsors hold warrants convertible into 4% equity stake, post conversion Sponsor’s stake will increase form 41% t o 45%, on fully-diluted equity base will increase to 28.7 Cr shares post conversion 6
MAX INDIA LIMITED MAX HEALTHCARE www.maxhealthcare.in www.maxindia.com 7
Indian healthcare industry is expected to reach ~$400 billion fuelled by multiple demand drivers Indian healthcare sector* Estimated size, Bn USD CAGR 14.6% 350 - 450 CAGR 11.2% 280 102 79 60 ^ 2010 2012 2015 2020 2025 ^ Depending upon public spending levels, insurance proliferation, and success of public-private partnerships by 2025 Demand drivers for growth ~134 mn ~320 mn ~500 mn additional middle population > 60 at risk of dying due class by 2025 years by 2020 to NCDs by 2020 ~45% ~$8 bn ~2 mn Insurance medical tourism beds required by penetration by 2020 market size by 2020 2025 * Healthcare sector includes hospitals, pharmaceuticals, and medical technology sub-sectors Sources: India Brand Equity Foundation – Healthcare report, 2012; BofA Merrill Lynch Global Research, IBEF Mar'15 8
Hospitals constitute ~70% of Indian healthcare market with increasingly dominant role of private sector Indian healthcare sector* Private players have established a dominating presence in tertiary / Market share % quaternary care 20% 22% 30% 37% 40% 80% 78% 70% 10% 63% 60% Market Share Beds Inpatients Outpatients Doctors 20% Private sector Public sector Market size of private hospitals is expected to reach ~$ 120 bn by 2020 70% Private sector hospitals 120 Estimated size, Bn USD CAGR ~19.2% CAGR Hospitals ~14.7% 50 36 Pharmaceuticals 22 Medical technology / Others 2009 2012 2015 2020 * Includes hospitals, pharmaceuticals & medical technology / other companies Sources: BofA Merrill Lynch Global Research, IBEF Mar'15 9
Competition is intensifying with scale-up of well funded incumbents & availability of capital for new players The surge of VC/ PE investments in recent years has eased funding constraints on growth Annual VC/ PE investment’s in India’s Healthcare ($ Million) 2x 1359 1262 835 580 485 2010 2011 2012 2013 2014 (H1) No. of deals 35 29 45 71 43 Scale up of well funded incumbents CURRENT SCALE FUNDING (RS. CR.) CURRENT SCALE FUNDING (RS. CR.) 8,600 550, (2013 - KKR) 6,500 290, (2014 - CDC) 4,800 820, (2013 - Stan Chart, IFC) 4,900 900, (2015 - TPG Capital) 700, (2015 - Temasek/Punj 1,300 2,500 (2012) 560, (2012 - Advent) Lloyd) Slide sourced from Bain and Company Note: Fortis and NH operational beds not split between owned and managed; Manipal’s # of managed beds assumed to be same for 2010 and 2013; assumed exchange rate of 1$=INR60 10 Source: Crisil research, company websites and presentations, secondary sources
MHC vision To become an admirable institution known for service excellence, medical excellence, scientific research, and medical education WHAT WILL WE BE KNOWN FOR KEY ENABLERS WHERE DO WE WANT TO BE • #1 in selected specialties in • Integrated care • Strong talent pool of chosen geographies clinicians, nurses and • Clinical excellence healthcare leaders • Focus on Tertiary and Quaternary care • Transparency • Technology and analytics enabled • Physical infrastructure in • Speed clinical outcomes and North India; however customer experience serving more than 300 • Tech enabled towns in India and 30+ continued care countries 11
MHC has a strong focus on North India NCR OUTSIDE NCR ~2500 available beds across the network 290 Pitampura* Shalimar Bagh 224 293 419 Mohali 186 Vaishali Patparganj Bathinda Lajpat Nagar* Panchsheel* 41 172 522 Dehradun 222 72 Noida Saket Max Smart 1 12 Gurgaon Greater Noida * Standalone Speciality Clinics with Outpatient and Day care facility 12
MHC has invested in state of the art equipment to achieve clinical excellence (1/2) Robotics Novalis LINAC Advanced robotics provides high precision, and High dose radiation with extreme minimum invasive surgery across multiple precision (~ 0.5 mm accuracy) specialities such as Oncology, Neurology PET-CT Brain suite Advanced image guided surgery - Provides precise correlation and facilitates provides real-time views and automated proper treatment for Oncology, surgical image processing planning and radiation therapy 13
MHC has invested in state of the art equipment to achieve clinical excellence (2/2) CyberKnife* SPIDER Robotic radio-surgery (non-invasive) system for Designed for revolutionary single incision both cancerous & non-cancerous systems laproscopic surgery through catheter-based, flexible instruments Picture Archiving & Communication System - PACS Economical digital storage and convenient access to medical images from multiple modalities * planned 14
MHC has a robust service excellence & quality framework which has resulted into enhanced customer experience Top 2 Box Rating* 13 % 73% 69% 57% FY`15 FY`16 FY`17 • “ Sevabhav ” trainings and Reward & Recognition platform has led to positive shift in mindset • Structural Interventions through Six Sigma and other methodologies has resulted into business impact of over 15 Mn USD * MHC is the only healthcare company who has deployed a third party (IMRB) to conduct Satisfaction survey 15
MHC strong Governance Model helps us bring alignment and improve accountability Governance Board & 7 committees Investment & Medical Scientific Corporate Nomination & Service Audit performance excellence & projects & social remuneration excellence review compliance technology responsibility Administration Managerial Clinical Group Medical Executive Committee Advisory Council (GMAC) Hospital Medical Unit Heads Executive Council (HMEC) Unit Management Doctor’s council Committee (MANCO) 16
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