NMC Health plc Another record year highest ever revenues, EBITDA and profit

NMC Health plc (LON:NMC), the leading private healthcare operator in the Gulf Cooperation Council (GCC) with international services across 19 countries, announces its results for the full year ended 31 December 2018.

Financial summary and operational highlights

Notes:

Adjusted Profit is same as shown in Note 17.

Adjusted Earnings per share equals Diluted adjusted earnings per share as shown in Note 17.

EBITDA equals Profit from operations before depreciation, amortization, transaction cost and impairment as shown in the Condensed Consolidated Income statement. This is the definition of EBITDA which is used throughout the document.

Weighted average shares outstanding in FY 2018 stood at 209.3m shares compared to 205.8m shares in FY 2017. The increase resulted from the issuance of 3.5m shares for partial payment of outstanding minorities in Fakih IVF and exercise of share options.

· FY 2018 proved to be another year of record revenues and profits for NMC on the back of continued efficiencies at existing facilities and successful integration of acquired assets

· Strong financial performance with continued growth (both organically and inorganically), with Group revenues growing by 28.3% to US$2,057.3m

· Organic revenue growth for FY 2018 ahead of guidance at 15.4% YoY.

· EBITDA growth (+37.9% YoY to US$487.4m) continued to outpace revenue growth, translating into 170bps improvement in EBITDA margin to 23.7%.

· Healthcare division continues to drive NMC’s growth with revenue and EBITDA up 34.4% and 37.3% respectively

· Net Profit increased 20.4% YoY to US$251.9m, the highest in Group’s history.

· Strategic initiatives in 2018 including; expansion into Saudi Arabia, integration of CosmeSurge and extension of the IVF platform, including in USA and Africa, further enhancing our platform for growth

· Healthy cash flow including improvement in the Group’s working capital position through strong collections to reduce days sales outstanding to 96

· Stable balance sheet to support future growth with year-end net debt / EBITDA at 3.1x.

· Strong start to current year reinforces confidence in operational performance and outlook for 2019 of +22-24% YoY revenue growth and +18-20% YoY EBITDA growth. The board remains committed to maintaining a 20-30% payout ratio, which it believes to be a progressive policy given our underlying growth rate in the business.

Mr Prasanth Manghat, NMC Health Chief Executive Officer, commented:

2018 was another year of records for NMC: highest ever revenues, EBITDA and profit for the Company. From an operational standpoint, several high-profile strategic initiatives were completed, which will further cement our position as the leading healthcare operator in the region. Be it the formation of a JV with GOSI/Hassana Investment Company, further expansion of the IVF platform, enhancement of cosmetics capabilities through the acquisition of CosmeSurge or substantial knowledge acquisition through Aspen Healthcare, all steps taken during the year fit well into the three key tenets of our strategy: Capacity building, Capability building and Geographic expansion.

Strong operational performance of our existing assets, combined with smooth integration of previous and new acquisitions continue to translate into stellar financial performance. Both 2018 revenues and EBITDA came in ahead of our guidance at US$2.1b and US$487.4m, respectively. Moreover, a strong start to the current year reinforces our confidence in the business and we remain confident that 2019 will prove to be another year of record top and bottom line.

Margin enhancement and improving cash flows remain the cornerstone of our financial performance. With nearly half of our operational beds in ramp-up phase, this trend is set to continue for the foreseeable future. As operations at our key assets, such as NMC Royal and our Saudi portfolio, move towards maturity, income and cash generation are expected to improve significantly in the short to medium term.

In addition to strong operational performance, NMC also continues to benefit from sustained economic expansion in its core markets. For example, our home market of UAE is projected to grow at 3.1% in 2019 by the Institute of International Finance, the fastest in the GCC. Saudi Arabia is similarly anticipated to maintain a positive economic trend, with the IMF projecting GDP growth of 1.8% and 2.1%, respectively. Moreover, the healthcare sector remains a key focus point for governments in all the main markets we operate in and promoting private participation is a common theme across all these countries. Given NMC’s philosophy of honing in on segments where governments are most keen to find private sector partners, the Company acts as an ideal and responsible corporate citizen in its target markets.

In summary, we continue to see the future with optimism and feel that NMC remains ideally positioned to capitalize on growth opportunities in its key markets. Our time-tested strategy serves as the appropriate framework to continue to drive our rapid growth. Moreover, I remain confident we have the right team in place to continue to build out what has proven to be the leading healthcare business out of the GCC.