Max India Limited Investor Presentation June 2016 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
Max Group Architecture (Multi-business corporate – focused on people and service) “ IN THE BUSINESS OF LIFE ” ~ * * Life Insurance business Health and Allied businesses Manufacturing & other businesses Life Insurance # - Protecting Life Manufacturing (Speciality Films) - Healthcare ** - Caring for Life Niche high barrier polymer films & Leather Finishing Foils Health Insurance^ - Enhancing Life Investments Real Estate Education Senior Living - Continuing care in Retirement community Corporate Social Responsibility - Focus on healthcare, children and the environment #74:26 JV with Mitsui Sumitomo; Largest non bank lead private life insurer ~ Max Financial services listed on Jan 27, 2016 ** Equal JV with Life Healthcare, SA; with 2,500 beds capacity * Max India listing expected by mid Jul’16 ^ 51:49 JV with BUPA Finance Plc, UK 2
Max Group Overview INR 142 billion+ Revenues*… 9 Mn Customers… 22,500 Employees… ~58 ,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 Electronic Mobile Communication Plating Medical Life Pharma Component Telephony Services Chemicals Transcription Insurance COMSAT Hutchison ATOTECH 3
Max Group : Continues to grow from strength to strength FY 2016 Summary: • Group Revenues: Rs 14,237 Cr up 12% • EBITDA: Rs 717 Cr up 16%. PBT at Rs 420 Cr up 27% • Asset Under Management: Rs 36,390 Cr up 15% • 9 Million Customers; 22,500 employees; 58,000 Agents; 240 offices FY 2016 Summary: FY 2016 Summary: FY 2016 Summary: • Revenue at Rs 10,875 Cr, up 14%, • PBT at Rs 28 Cr, up 46% • MHC network turn profitable. • Investment vertical kick started PBT at Rs 465 Cr, up 9% EBITDA grows 26% to Rs 215 Cr. • MCEV at Rs 5,617 Cr, up 17%; • 2 acquisitions give MHC a platform with proposed investment in • New Business Margin at 18.3% Azure Hospitality, which runs to double bed strength to over • Long term renewal of partnership pan-Asian restaurant chains 5,000 • New Bopp line being set-up to with Axis Bank • MAX Bupa GWP grows 28%. • #1 in claims settlement and expand capacity to 75,000 TPA Distribution alliance with Bank of Premium Conservation Baroda • Antara all set to commence Dehradun operations next quarter 4
Max India: High pedigree investor base Shareholding concentrated with Marquee Investors Shareholding Pattern as on Jan 28, 2016 Goldman Sachs International Finance Corporation Others 0.0% 0.0% 0.0% 0.0% 9.6% New York Life Insurance Mutual Funds Temasek Holdings 13.2% Promoters Fidelity 40.4% Reliance Mutual Fund FII (Others) ICICI Prudential Mutual Fund 18.3% Goldman HDFC Mutual Fund Sachs 15.5% IFC Motilal Oswal Mutual Fund 3.1% DSP Blackrock Mutual Fund Number of outstanding shares : 26.70 Cr. 5
MAX INDIA LIMITED MAX HEALTHCARE www.maxhealthcare.in www.maxindia.com 6
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% ~$8 bn ~2 mn Insurance medical tourism beds required by penetration by 2020 market size by 2020 2025 * Healthcare sector includes hospitals, pharmaceuticals, and medical technology sub-sectors Sources: India Brand Equity Foundation – Healthcare report, 2012; BofA Merrill Lynch Global Research, IBEF Mar'15 7
Hospitals constitute ~70% of Indian healthcare market with increasingly dominant role of private sector Indian healthcare sector* Private players have established a dominating presence in tertiary / Market share % quaternary care 20% 22% 30% 37% 40% 80% 78% 70% 10% 63% 60% Market Share Beds Inpatients Outpatients Doctors 20% Private sector Public sector Market size of private hospitals is expected to reach ~$ 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 8
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 9 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 10
MHC has a strong focus on North India NCR OUTSIDE NCR 2400+ available beds across the network 275 275 70 70 224 224 Shalimar limar Bagh Bagh 260 260 Pitampura ampura Mohali ali 402 402 186 186 Vaishali shali Patparganj parganj Bathinda hinda 215 215 46 46 535 535 168 168 Saket et City City Dehradun radun Noida da Saket et 64 64 Gurgaon gaon 11
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 12
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 13
MHC has a robust service excellence & quality framework which has resulted into enhanced customer experience Top 2 Box Rating* 11 % 68% 57% FY`15 FY`16 • “ 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 14
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) 15
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