Max India Limited Investor Presentation November 2018 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 2 Note: USD rate considered at 64
Max Group – Corporate Structure Max Group ‐ Sponsors 30.3% 41.0% 47.2% Companies Holding Life Insurance Health & Allied Manufacturing & Business* Business Other businesses 51% 50% 70.75% Operating Companies 100% 51% 100% 100% 100% Group CSR Arm Sponsors stake in Max Group holding companies 3
Max Group – Senior Management Rahul Khosla • Group President • Chairman, Max India Limited • Executive President, Max Financial Services • Chairman, Max Healthcare Institute Ltd Mohit Talwar Rajesh Sud • Managing Director, Max India Limited • Executive Vice Chairman & MD, Max Life Insurance • Managing Director, Max Financial Services (upto December 31, 2018) • Vice-Chairman, Max Ventures and Industries Ltd • Chairman, Max Bupa Health Insurance Co Ltd & • Chairman, Max Specialty Films Max Skill First ( upto March 31, 2019) Rajit Mehta Prashant Tripathy (with effect from Jan 1, 2019) • MD & CEO, Max Healthcare • MD & CEO, Max Life Insurance Tara Singh Vachani Sahil Vachani • MD & CEO, Antara Senior Living • MD & CEO, Max Ventures and Industries Limited • Director in Max India & Max Healthcare • Director in Max Financial & Max Life Insurance Ramneek Jain Ashish Mehrotra • CEO, Max Specialty Films • MD & CEO, Max Bupa Health Insurance Mohini Daljeet Singh Rajender Sud • Chief Executive, Max India Foundation • CEO, Max Skill First Limited 4
Max Group Overview 1 USD 3 billion+… 10 Mn Customers… 25,000 Employees… ~80,000 Agents… 3,000 Doctors… Strong growth trajectory even in challenging times; a resilient & diversified business model 2 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 Superior brand recall with a proven track record of service excellence 6 Strong history of entrepreneurship and nurturing successful business partnerships 7 5
Max Group : Continues to grow from strength to strength Group Revenue (USD Mn) 2,945 2,584 2,190 1,915 1,639 FY'14 FY'15 FY'16 FY'17 FY'18 Group EBITDA (USD Mn) 129 127 110 95 81 FY'13 FY'14 FY'15 FY'16 FY'17 6
Max India: High pedigree investor base Shareholding concentrated with Marquee Investors Shareholding Pattern as on Sep 30, 2018 Ward Ferry 0.0% 0.0% 0.0% 0.0% International Finance Corporation Target Asset management Others New York Life Insurance 13.6% Nomura Singapore Mutual Doric Capital Promoters Funds 41.0% Comgest 18.7% TVF Fund Government of Singapore IFC Reliance Mutual Fund FII/ FPI 3.1% 23.6% L&T Mutual Fund HDFC Standard Life Insurance UTI 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% to 45%, on fully ‐ diluted equity base will increase to 28.7 Cr shares post conversion 7
MAX INDIA LIMITED MAX HEALTHCARE www.maxhealthcare.in www.maxindia.com 8
Indian healthcare industry is expected to reach ~$470 billion fuelled by multiple demand drivers Indian healthcare sector * Estimated size, Bn USD CAGR 16.5% 450-470 CAGR 320-340 15.0% 280 160 79 60 2010 2012 2017 2020 2025 2025 Business As Usual Aspirational 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% ~$8 bn ~2 mn Insurance medical tourism beds required by penetration by 2020 market size by 2020 2025 * Includes hospitals, pharmaceuticals & medical technology / other companies 9 Sources: India Brand Equity Foundation – Healthcare report, July 2017, BofA Merrill Lynch Global Research
Hospitals constitute ~70% of Indian healthcare market with increasingly dominant role of private sector Indian healthcare Private players have established a dominating presence in tertiary / sector* quaternary care Market share % 20% 22% 30% 37% 40% 80% 78% 70% 63% 60% 10% Market Share Beds Inpatients Outpatients Doctors 20% Private sector Public sector Market size of private hospitals is expected to reach ~$ 120 bn by 2020 70% Private sector hospitals 120 Estimated size, Bn USD CAGR ~20% 81 CAGR ~24% Hospitals 36 22 Pharmaceuticals Medical technology / Others 2009 2012 2015 2020 * Includes hospitals, pharmaceuticals & medical technology / other companies 1 Sources: BofA Merrill Lynch Global Research, IBEF Mar'15 0
At current level of public sector spending the scenario is not likely to change India- public spend on Healthcare % of GDP Developed countries 8-10% USA ~8% WHO guidelines 5%+ BRICS- excluding India 3.5-4% 2.50% 1.40% 1.30% 1.20% 1.15% FY14 FY15 FY16 FY17 FY20-22 Hence, Government will keep shifting the burden of public health provision towards private sector Source: LiveMint research, World Bank database, Hindustan Times 11
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) ~3x 1,584 1,359 1,262 1,111 900 580 495 2010 2011 2012 2013 2014 2015 2016 No. of 35 29 65 60 54 50 86 deals Recent examples AMOUNT DATE AMOUNT DATE TARGET INVESTOR TARGET INVESTOR $221 mn Jan ‘16 $43 mn Jul ‘17 $68 mn May ‘16 $171 mn Aug ‘17 $63.5 mn Dec ‘16 $571 mn Jul ‘18 $200 mn Jul ‘17 Source: Crisil research, company websites and presentations, secondary sources 12
MHC vision To deliver international class healthcare with a total service focus, by creating an institution committed to the highest standards of medical & service excellence, patient care, scientific knowledge, research and medical education WHAT WILL WE BE KNOWN FOR KEY ENABLERS WHERE DO WE WANT TO BE • #1 in selected specialties in • Strong talent pool of • Integrated care 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 13
MHC is a dominant player in North India NCR OUTSIDE NCR ~2500 available beds across the network 280 Pitampura* Shalimar Bagh 224 293 410 Mohali 186 Vaishali Patparganj Bathinda Lajpat Nagar* Panchsheel* 172 519 Dehradun 250 72 Noida* Saket Max Smart 61 Gurgaon Greater Noida * Standalone Speciality Clinics with Outpatient and Day care facility 14
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 15
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 16
MHC has a robust service excellence & quality framework which has resulted in enhanced customer experience Top 2 Box Rating* 80% 73% 69% 57% FY`15 FY`16 FY`17 FY`18 • “ 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 USD 18 Mn * MHC is the only healthcare company who has deployed a third party (IMRB) to conduct Satisfaction survey 17
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