PG.1
Building for the future
Bumrungrad Hospital Public Company LimitedAnalyst Meeting No.1/2014 – 4Q13 and 2013 Results Update
3 March 2014
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Disclaimer• The information contained in this presentation is for information purposes only and does not constitute an offer or invitation to sell or
the solicitation 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/orto persons to whom it is lawful to communicate it under the laws of applicable jurisdictions. Other persons should not rely or act uponthis presentation or any of its contents.
• Certain information and statements made in this presentation contain the Company's forward‐looking statements. All forward‐lookingstatements are the Company's current expectation of future events and are subject to a number of factors that could cause actualresults to differ materially from those described in the forward‐looking statements. Prospective investors should take care with respectto such statements 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 hasnot been independently verified. No representation, warranty, express or implied, is made as to, and no reliance should be placed on,the fairness, accuracy, completeness or correctness of the information and opinions in this presentation. None of the Company, any ofits affiliates or any of their respective agents, advisors or representatives, shall have any liability (in negligence or otherwise) for anyloss or damage howsoever arising from any use of this presentation or its contents or otherwise arising in connection with thispresentation. The information presented or contained in this presentation is current as of the date hereof and is subject to changewithout notice and its accuracy is not guaranteed. None of the Company, any of its affiliates or any of their respective agents, advisorsor 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 ownassessment with regard to any investment and should obtain independent advice on any such investment’s suitability, inherent risksand merits 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 orany 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 aresubject to change based on various factors.
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Overview
• 4Q13: Outpatient and inpatient volumes declined somewhat in 4Q13 compared with 4Q12 mainly from the Thai market. However, revenue intensity improved 4.8% for outpatient services and 5.8% for inpatient services on a patient‐day basis, or 5.1% in terms of admissions. As a result, both inpatient and outpatient service revenues grew by 12.6%.
• The Company’s Total revenues and results for 2012 included extraordinary items related to the sale of investments in Bangkok Chain Hospital PCL (doing business as “Kasemrad Hospital Group”), and the Share of loss from Bumrungrad International Limited mostly associated with the sale of the investment in Asian Hospital Inc. and certain wind‐down costs. Applicable amounts including and excluding these extraordinary items are presented below:
Operational Update
Financial Performance
• BI Bangkok license capacity increased to 563 beds• Thailand• International
Updates and Ongoing Focus
4Q13 growth 2013 growth
Total revenues 11.7% 4.3%
Total revenues excluding extraordinary items 11.7% 10.6%
EBITDA 39.3% 20.8%
Net profit 55.3% ‐1.4%
Net profit excluding extraordinary items 55.3% 25.4%
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Agenda
Strategy
Operational Update
Financial Performance
Associated Companies
PG.5
Strategy
• Campus expansion• Doctor recruitment in subspecialties• Advanced technology• Skilled work force
Bumrungrad International Hospital
• Development of the Bumrungrad Network• Expand into a new market segment – 2ndBrand
Thailand
• Development of the Bumrungrad Network• Review of selective opportunities in existing referral markets
International
PG.6
Master Plan Changes
Under the new city planning regulation, a bonus increase in the FAR of 20% can be obtained by adding capacity to the rain water retention capacity.
Build the maximum FAR of 78,727m2 or a total construction of 88,683m2 for the Petchburi Campus.
Sukhumvit Soi 1
Petchaburi Road
Sukhumvit Soi 3
Nana
Station
Sukhumvit Road
ExpresswayPhloenChitStation
Move the clinical functions planned for Soi 1 to the Petchburi campus or expand at the Soi 3 campus.
Land bank Soi 1, use it as a parking lot until it is needed.
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Campus Expansion• Moved off campus into leased office spaceBack office
• Opened 5 floors in Bumrungrad International Clinic on 23 May 2013
• Expand clinics in Bumrungrad International HospitalClinics
• Add 18 ICU beds and 58 ward beds in Bumrungrad International Hospital building
• Expand ancillary servicesInpatient
• Bought 8,200 sq. meters of land on Petchburi Road.• Able to receive a bonus FAR of 20%2nd Campus
• Bought 6,178 sq. meters of land on Sukhumvit Soi 1.• Used for parking until more space is needed.
Campus Expansionon Soi 1
• Renovation of Bumrungrad Tower for employee houses and back office functions
Acquire Additional Capacity
Est. Capital Investment(Million THB)
Y11 Y12 Y13 Y14 Y15 Y16 Y17 Y18 Total
643 1,873 1,248 1,177 1,609 3,342 2,262 1,680 13,834
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Campus Expansion – Electrophysiology lab
• Thailand’s first dedicated Electrophysiology lab within a Private Hospital setting incorporating the latest innovations in medical technologies by both Phillips Health care and Biosense Webster.
• The imaging system installed which incorporates Philips’ latest Allura Clarity platform is the first such installation in South‐East Asia and ensures that patients received the lowest radiation dose possible (up to a 50% reduction) when compared to conventional systems.
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Current Status – Petchburi Project
• With total land area 8,200 sq.m. and 20% bonus increase in the FAR (from adding capacity to the rain water retention capacity) allowed a total construction area of 88,683 sq.m.
• Design and Environmental Impact Assessment in progress
• Construction will start in the first half of 2014
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Bumrungrad Tower
• Bumrungrad Tower on Rama IV road• 23‐storey building in good condition• Land area 3,368 sq.m.• Total building area of 40,650 sq.m. will accommodate
‐ 300‐400 back office employees‐ Dorm rooms for 1,000 nurses
• Renovation cost 180 MB
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Strategy
Operational Update
Financial Performance
Associated Companies
Agenda
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3,030
2,460
3,0853,004 2,971 3,007
3,085 3,0043,069 3,0223,038 2,958
0
500
1,000
1,500
2,000
2,500
3,000
3,500
3Q 4Q 1Q 2Q 3Q 4Q2011 2012 2013
Outpatient Visits Volume Trend
4th Quarter: Outpatient volumes declined somewhat in 4Q13 compared with 4Q12 mainly from the Thai market, OB/GYN and Pediatrics.
YTD Dec: Outpatient volumes were mostly the same between 2013 and 2012, decreasing slightly in the Thai market, OB/GYN and Pediatrics, and the international market, Cosmetic surgery and Physiotherapy.
Visits
Average Visits per Day22.1%1.8% 3.3%
Visits
Average Visits per Day
7.7%
0.5%
0.1%
1.5% 1.5%
2,8013,017 3,017 3,021
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2011 2012 2013
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Admissions Volume Trend
Admissions
Average Admissions per Day
6.1%
8085 85 84
0
20
40
60
80
100
2011 2012 2013
1.0%
Admissions
Average Admissions per Day
1.6% 20.4%
88
70
8984
8780
89 848680
89 83
0
20
40
60
80
100
3Q 4Q 1Q 2Q 3Q 4Q2011 2012 2013
1.4% 0.6% 1.0% 2.0% 4th Quarter: Inpatient volumes declined somewhat in 4Q13 compared with 4Q12 mainly from the Thai market, OB/GYN and Pediatrics.
YTD Dec: Inpatient volumes reflected a small decline in 2013, mostly from the international market , Cosmetic surgery and OB/GYN, and the Thai market, OB/GYN and Pediatrics.
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Average Daily Census Volume Trend
ADC
Average Daily Census
3.2% 15.0%
377
329
389378 376 372
389378
381
356
374 368
280
300
320
340
360
380
400
3Q 4Q 1Q 2Q 3Q 4Q2011 2012 2013
1.4% 4.3% 3.9% 2.7%
ADC
Average Daily Census
8.1%
350
379 379370
320
340
360
380
400
2011 2012 2013
2.4%
4th Quarter and YTD Dec: ADC declined due to a decrease in admissions and a shorter average length of stay.
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6,471 6,534 6,550 6,693 5,9926,5607,192
7,411 7,459 7,6526,560
7,428
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
1Q 2Q 3Q 4Q 2012 2013
2011 2012 2013
217,246232,823
212,437218,808
206,353220,001233,385 246,372 234,988
251,356220,001 241,340
0
50,000
100,000
150,000
200,000
250,000
300,000
1Q 2Q 3Q 4Q 2012 20132011 2012 2013
Revenue per episode reflects the priceincrease for 2013 and the increase inrevenue intensity.
Revenue intensity change:
4th Quarter
• OPD revenue intensity increased 4.8%.
• IPD revenue intensity per admissionincreased 5.1%.
• IPD revenue intensity per patient dayincreased 5.8%.
YTD Dec
• OPD revenue intensity increased 4.4%.
• IPD revenue intensity per admissionslightly increased 0.9%.
• IPD revenue intensity per patient dayincreased 2.3%.
Revenue Intensity
Bt
Revenue per Visit
Bt
Revenue per Admission
11.1%
7.4%
13.4%
5.8%
14.1%
10.6%
14.3%
14.9%
9.5% 13.2%
6.6% 9.7%
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Volume Contribution by Nationality
Revenue Contribution by Nationality
International Breakdown
• Revenues by market segment also remained essentially the same in 4Q13 as in 4Q12, with international patients comprising 60.9% of the total in 4Q13 and Thai patients the remaining 39.1%.
• 2013 Top 5 revenue contribution by Non‐Thai Nationalities
UAE 8%
Myanmar 7%
Oman 5%
USA 5%
Qatar 3%
61% 63% 60% 60% 62% 61% 60% 61%
39% 37% 40% 40% 38% 39% 40% 39%
0%
20%
40%
60%
80%
100%
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13International Thai
47% 46% 45% 45% 47% 47% 46% 47%
53% 54% 55% 55% 53% 53% 54% 53%
0%
20%
40%
60%
80%
100%
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13International Thai
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Revenue Breakdown
Inpatient vs. Outpatient (% of revenue) Method of Payment (% of revenue)
Y2013
• 4Q13 Revenue growth:
Outpatient revenue increased by 12.6% y‐o‐y
Inpatient revenue increased by 12.6% y‐o‐y
• Self‐pay remains the primary method of payment
50% 49% 48% 48% 48% 47% 48% 48%
50% 51% 52% 52% 52% 53% 52% 52%
0%
20%
40%
60%
80%
100%
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13Inpatient Outpatient
Corporate Contracts ‐Domestic
9%
Corporate Contracts ‐
Intl7%
Self‐pay72%
Insurance12%
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Agenda
Strategy
Operational Update
Financial Performance
Associated Companies
PG.19
EBITDA and EBITDA Margin EBITDA (THB mm)
EBITDA Margin
4,016
726
3,326
1,011
0
900
1,800
2,700
3,600
4,500
4th Quarter YTD Dec
Y2012 Y2013
27.7%
25.3%
22.0%
27.4%
20.0%
22.0%
24.0%
26.0%
28.0%
30.0%
4th Quarter YTD Dec
Y2012 Y2013
39.3%
20.8%
• 4Q13 : Cost of hospital operations (including Depreciation and amortization) was Baht 2,253 million for 4Q13, or 5.4% more year‐over‐year from Baht 2,138 million in 4Q12, which compared favorably to the 12.5% growth in Revenues from hospital operations. Included in the year‐over‐year change was reduced expense of Baht 51 million related to the cost of gold and restructuring associated with the Company’s long‐term service award program, and a Baht 25 million decrease in the employee annual bonus award related to extraordinary items occurring in the prior year. These expense reductions were mostly offset by additional Depreciation and amortization of Baht 51 million associated with the campus expansion and revised estimated useful lives of certain assets. Administrative expenses (including Depreciation and amortization) were Baht 732 million in 4Q13, or 18.2% more than Baht 619 million in 4Q12. The change between periods includes Baht 72 million additional Depreciation and amortization costs, as noted above; Baht 12 million additional marketing related expenses, due to timing differences of expenditures between periods; Baht 9 million in employee medical benefits and inflationary increases in staff costs; and Baht 7 million more in training expenses, mostly due to timing differences of expenditures between periods. EBITDA grew 39.3% year‐over‐year from Baht 726 million in 4Q12 to Baht 1,011 million in 4Q13, with an EBITDA margin of 27.4% in 4Q13 compared to 22.0% in 4Q12.
• Y2013 : Cost of hospital operations (including Depreciation and amortization) was Baht 8,836 million for 2013, or 7.2% more than Baht 8,242 million in 2012, which was less than the 10.8% growth in Revenues from hospital operations. The change includes approximately Baht 158 million in merit, minimum wage, benefits, and inflationary increases associated with employee labor costs; Baht 105 million additional Depreciation and amortization costs associated with the campus expansion and revised estimated useful lives of certain assets; Baht 101 million in mostly inflationary increases related to cost of medicine and medical supplies; and Baht 16 million more in electricity cost. Administrative expenses (including Depreciation and amortization) were Baht 2,527 million in 2013, increasing 10.1% from Baht 2,295 million in 2012. This variance included Baht 68 million additional Depreciation and amortization costs, as described above; Baht 46 million in merit, minimum wage, benefits, and inflationary increases associated with employee labor costs; Baht 39 million additional marketing expenses mostly related to doctor campaigns, medical specialty programs, and international patient referrals; and Baht 19 million more in software support and maintenance costs. EBITDA grew 20.8% year‐over‐year from Baht 3,326 million in 2012 to Baht 4,016 million in 2013, with the EBITDA margin advancing to 27.7% in 2013 compared with 25.3% in 2012.
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Net Profit (THB mm)
Diluted EPS (THB)
Net Profit Margin
Net Profit, Net Profit Margin and Diluted EPS
2,010
403
2,558
626
2,521
0
500
1,000
1,500
2,000
2,500
3,000
4th Quarter YTD Dec
Y2012 Adjusted Y2012 Y201325.4% ‐1.4%
55.3%
2.32
0.46
2.95
0.72
2.91
0.000.501.001.502.002.503.003.50
4th Quarter YTD Dec
Y2012 Adjusted Y2012 Y2013 ‐1.4%25.4%
55.3%
• 4Q13 : Net profit for 4Q13 grew 55.3% to Baht 626 million from Baht 403 million in 4Q12. Diluted EPS increased at the same rate to Baht 0.72 from Baht 0.46 in 4Q12.
• Y2013 : The Company’s results for 2012 included extraordinary items related to the sale of investments in Bangkok Chain Hospital PCL (doing business as “Kasemrad Hospital Group”), and the Share of loss from Bumrungrad International Limited mostly associated with the sale of the investment in Asian Hospital Inc. and certain wind‐down costs. Excluding these extraordinary items, Adjusted Net profit in 2012 was Baht 2,010 million compared with Baht 2,521 million in 2013, producing an adjusted increase of 25.4%. Adjusted Diluted EPS grew at the same rate from Baht 2.32 in 2012 to Baht 2.91 in 2013.
15.1%12.1%
18.1%16.8% 17.2%
0%
5%
10%
15%
20%
25%
30%
4th Quarter YTD Dec
Y2012 Adjusted Y2012 Y2013
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One‐time Events
(Unit: Thousand Baht) 4Q13 4Q12 %Variance Y2013 Y2012 %Variance
Net Profit 626,424 403,240 55.3% 2,520,782 2,558,512 ‐1.5%
Adjustments:
Gain on sale of investment (KH) ‐ ‐ ‐ 789,826
Share gain from KH ‐ ‐ ‐ 107,059
Accelerated depreciation (101,000) ‐ (101,000) ‐
Capitalized interest expenses 96,763 ‐ 96,763 ‐
Long‐Yr service award adjustment 50,549 (22,396) 50,549 (22,396)
Total adjustments 46,312 (22,396) 46,312 874,489
Income tax related to adjustments (9,262) 5,151 (9,262) (217,607)
Total adjustments ‐net of tax 37,050 (17,245) 37,050 656,882
Income tax decreased due to 3% income tax rate reduction 23,572 ‐ 94,209 ‐
Net Profit excluding adjusments 565,802 420,484 34.6% 2,389,523 1,901,630 25.7%
PG.22
Leverage
xInterest Coveragex
Net Debt to EBITDAx
Net Debt to Equityx
*0.7
0.6 0.4
1.3
(0.3) (0.2)
(0.50)
0.00
0.50
1.00
1.50
2008 2009 2010 2011
2012 2013
0.3 0.2
0.2
0.6
(0.1) (0.1)
(0.25)
0.00
0.25
0.50
0.75
2008 2009 2010 20112012 2013
18.8
24.8
35.9
14.9 13.8 16.4
0
10
20
30
40
2008 2009 2010 2011 2012 2013
*Interest expense related to the purchase of common shares of Bangkok Chain Hospital PCL (doing business as "Kasemrad Hospital Group") to calculate interest coverage ratio was Baht 111 million based on remaining days after the transaction settled. Assuming this interest expense was incurred for the full year, interest expense from this transaction would be Baht 140 million and interest coverage ratio will be 12.9x
• Although Cash and cash equivalents decreased, the total debt as at 31 December 2013 remained significantly lower than the Cash and cash equivalents balance, leading to a net cash balance after considering outstanding debt.
• After adding back the 2013 capitalized interest expense related to the campus expansion of Baht 97 million, the Company’s Interest coverage ratio improved to 16.4x in 2013 from 13.8x in 2012, due to higher EBITDA in 2013 compared to 2012.
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Agenda
Strategy
Operational Update
Financial Performance
Associated Companies
PG.24
• KH Acquisition Date: 18 March 2011
• BH Investment % : 24.99%
• KH Divestment Date: 10 July 2012
• The Company did not recognize any Share of profit from KH in 2013, as a result of the sale of all shares in early July 2012
• The Share of profit from KH recognized by BH in 2012, following the investment in March 2011, is set out in the table below:
Kasemrad Hospital Group (“KH”) – Share of Profit
(Unit: Thousand Baht) 2013 2012
Share of profit from KH ‐ 111,286
Depreciation for fixed assets revaluation ‐ (4,227)
Share of profit from KH ‐net ‐ 107,059
Interest income* 121,014 ‐
Interest expense (165,719) (165,719)
Amortization of bond issuance cost (4,015) (3,956)
Decrease in corporate income tax 9,744 39,025
Net profit (loss) from KH transactions (38,976) (23,591)
* Represents interest income on net cash proceeds of 4,482MB from the sale of investment in KH.
PG.25
Q & A