HALF-YEAR 2021 REPORT

London | 2 September 2021

Integrated Diagnostics Holdings Plc

1H 2021 Results

Thursday, 2 September 2021

Integrated Diagnostics Holdings Plc delivers exceptional growth on the back of strong demand across its entire service portfolio

(London) Integrated Diagnostics Holdings ("IDH," "the Group," or "the Company"), a leading consumer healthcare company with operations in Egypt, Jordan, Sudan and Nigeria, released today its reviewed financial statements and operational performance for the first half of 2021, recording revenue of EGP 2,293 million, up 141% versus the comparable period of last year. Normalised EBITDA1 recorded EGP 1,203 million in 1H 2021, representing a 227% year- on-year increase, while net profit expanded 283% year-on-year to reach EGP 668 million for the period. In the second quarter of 2021, revenues reached a new record-high of EGP 1,164 million, up 3% from an already impressive first quarter of the year, with net profit recording EGP 327 million and an associated margin of 28%.

Financial Results

EGP mn

1H 2020

1H 2021

Change

Revenues

950

2,293

141%

Cost of Sales

(503)

(988)

96%

Gross Profit

446

1,305

193%

Gross Profit Margin

47%

57%

9.9 pts

Operating Profit2

277

1,094

291%

Normalised EBITDA

367

1,203

227%

EBITDA Margin

39%

52%

13.8 pts

Net Profit

175

668

283%

Net Profit Margin

18%

29%

10.8 pts

Cash Balance

719

1,587*

121%

*Cash balance prior to payment of US$ 29.1 million dividend for year ended 31 December 2020, distributed on 29 July 2021.

Key Operational Indicators

1H 2020

1H 2021

change

Branches

462

495

33

Patients ('000)

2,890

4,673

62%

Revenue per Patient (EGP)

329

491

49%

Tests ('000)

11,234

16,318

45%

Revenue per Test (EGP)

85

141

66%

Test per Patient

3.9

3.5

-10%

  1. Normalised EBITDA is calculated as operating profit plus depreciation and amortization and excluding one-off fees incurred in 1H 2021 (EGP 29.0 million) related to the Company's dual listing on the EGX completed in May 2021.
  2. Operating Profit excludes one-off fees incurred in 1H 2021 (EGP 29.0 million) related to the Company's dual listing on the EGX completed in May 2021.

Integrated Diagnostics Holdings plc 1

HALF-YEAR 2021 REPORT

London | 2 September 2021

Introduction

  1. Financial Highlights
  • Revenue recorded EGP 2,293 million in 1H 2021, up a remarkable 141% versus the comparable period of last year supported by both IDH's Covid-19-related3 tests and a sustained recovery in the Group's conventional test offering. Top-line growth for the first half of 2021 was dual-driven, as tests performed and average price per test posted year-on-year expansions of 45% and 66%, respectively. Covid-19-related tests contributed to 48% of IDH's top-line during the first six months of the year compared to the 9% contribution made during 1H 2020. Excluding Covid-19-related tests, the Group witnessed a 38% year-on-year expansion in revenue generated from its conventional test offering. The year-to-date performance was buoyed by an impressive second quarter, which saw IDH build on the strong momentum from the start of the year to record revenues of EGP 1,164 million for 2Q 2021, up 159% versus 2Q 2020 and 3% from 1Q 2021.
  • Consolidated revenues continued to be supported by the Group's house call service in Egypt and Jordan, which in 1H 2021 contributed to 23% of total revenue versus the 18% contribution made this time last year. Through its house call service, IDH served more than 646,000 patients in 1H 2021 (up 88% versus 1H 2020), performing more than 3.4 million tests (up 49% versus 1H 2020). Leveraging an expanded reach, IDH was able to carry out an average of 3,600 house call visits per day in 1H 2021, up significantly from the 1,900 visits per day performed in 1H 2020.
  • Gross Profit grew by 193% year-on-year in 1H 2021 to record EGP 1,305 million with an associated margin of 57% versus 47% in the same period last year. Improved gross profitability came on the back of strong top-line growth and the subsequent dilution of fixed costs for the period such as direct salaries and wages and other expenses. Gross profit for the second quarter of 2021 recorded EGP 667 million, up 4% from the previous quarter and with a gross margin of 57%.
  • Operating Profit recorded EGP 1,094 million, a 295% year-on-year expansion, with an associated margin of 48% versus 29% last year. The remarkable growth in operating profit was supported by strong gross profitability, the dilution of SG&A outlays for the period due to their relatively fixed nature, and a normalisation of provisions booked in 1H 2021, which recorded EGP 10 million versus EGP 28 million in 1H 2020 to account for expected credit losses in accordance with IFRS 9.
  • Normalised EBITDA4 reached EGP 1,203 million in 1H 2021, an increase of 227% from the comparable period of last year. EBITDA margin expanded to 52% for the period versus 39% in 1H 2020. Solid improvements in EBITDA profitability were driven by strong top-line growth in 1H 2021 and the subsequent dilution of IDH's fixed costs for the period. On a quarterly basis, normalised EBITDA recorded EGP 603 million, up 267% year- on-year and largely in line with last quarter's figure. Normalised EBITDA margin stood at 52% for the quarter, down from the 53% margin recorded in 1Q 2021 as IDH booked higher accounting fees (related to the EGX requirement to publish quarterly reviewed financial statements) and additional bonus payments to senior management during 2Q 2021.
  • Net Profit expanded 283% year-on-year to record EGP 668 million in 1H 2021, with a net profit margin of 29% versus 18% in 1H 2020. Net profit growth was supported by strong EBITDA level profitability and comes despite IDH booking EGP 29 million in one-off fees related to the Company's dual-listing in May 2021. In 2Q 2021, net profit stood at EGP 327 million with an associated margin of 28%.
  1. Covid-19-relatedtests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other Covid-19-related tests which include a bundle of routine inflammatory and clotting markers (which witnessed strong demand following the outbreak of Covid-19) such as Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), among others.
  2. Normalised EBITDA is calculated as operating profit plus depreciation and amortization and minus one-off fees incurred in 1H 2021 (EGP 29 million) related to the Company's EGX listing completed in May 2021.

Integrated Diagnostics Holdings plc 2

HALF-YEAR 2021 REPORT

London | 2 September 2021

  • A dividend of US$ 29.1 million (US$ 0.0485 per share) for the year ended 31 December 2020 was distributed to shareholders on 29 July 2021. This represents an increase of 4% compared to a final dividend of US$ 28 million in aggregate in the previous financial year.
  1. Operational Highlights
  • IDH's branch network stood at 495 branches as of 30 June 2021, up from 462 branches and 481 branches as of 30 June 2020 and 31 December 2020, respectively.
  • Total tests performed recorded 16.3 million in 1H 2021, up 45% year-on-year. Higher test volumes were supported by both IDH's Covid-19-related5 test offering as well as a sustained recovery in the Group's conventional test offering, with the latter up 29% versus the first six months of 2020. In 2Q 2021, IDH performed 8.3 million tests, up 2% from the previous quarter as IDH performed both more Covid-19-related and conventional tests during the second quarter of the year compared to the previous quarter. The quarter- on-quarter expansion is particularly noteworthy as the second quarter included the expected slowdown related to the holy month of Ramadan and Eid vacation.
  • Average revenue per test expanded 66% year-on-year to EGP 141 in 1H 2021. Controlling for the generally higher value Covid-19-related5 tests, average revenue per test would have increased 7% versus last year.
  • Total patients served reached 4.7 million in 1H 2021, a 62% year-on-year increase. Meanwhile, average test per patient declined to 3.5 in 1H 2021 from 3.9 last year as an increasing number of patients visit the Group's labs for single Covid-19 tests (PCR, Antigen and Antibody).
  • Revenue generated by IDH's Egyptian operations expanded 140% year-on-year on the back of solid growth across both test and patient volumes. On a service basis, top-line growth was supported by both Covid-19- related4 and conventional tests, and was further bolstered by the Group's house call service which in 1H 2021 made up 25% of Egypt's top-line versus 20% last year. Excluding Covid-19-related contributions in 1H 2021, conventional tests performed and revenue generated in Egypt expanded 29% and 38% year-on-year, respectively.
  • Al-BorgScan recorded revenue of EGP 20 million in 1H 2021, an increase of 124% compared to last year. The number of radiology tests performed during the first six months of 2021 reached 34,297, more than double the tests performed last year.
  • Wayak turned EBITDA positive during 2Q 2021 on the back of growing revenue and optimised overhead costs. On a year-to-date basis, Wayak's revenue nearly tripled versus last year to reach EGP 4.3 million in 1H2021 supported by a growing customer base.
  • In Jordan, revenue increased 176% year-on-year on the back of strong volume growth for the period. Top-line growth was supported by Biolab's Covid-19-related test offering coupled with solid growth in its conventional test offering, with the latter having made a full recovery from last year's slowdown. In fact, excluding Covid- 19-related tests, the number of tests performed and revenue generated would have increased 43% and 41%, respectively.
  • In August, Biolab was selected as the preferred bidder to operate testing stations in Amman's Queen Alia International Airport (QAIA). This landmark partnership will allow IDH to continue playing a frontline role in the fight against Covid-19, while helping to further expand Biolab's volumes and revenue in the coming period.
  • In Nigeria, revenues continued their steady expansion, growing 68% year-on-year (76% in NGN terms) in 1H 2021 supported by a 47% increase in tests performed versus last year.

5 Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other Covid-19-related tests which include a bundle of routine inflammatory and clotting markers (which witnessed strong demand following the outbreak of Covid-19) such as Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), among others.

Integrated Diagnostics Holdings plc 3

HALF-YEAR 2021 REPORT

London | 2 September 2021

  1. Management Commentary

Commenting on the Group's performance for the six-month period, IDH Chief Executive Officer Dr. Hend El-Sherbini said: "Halfway through 2021, I am delighted with the Group's operational and financial performance, which has seen us continue to build on an impressive start to the year to deliver another set of record-breakingresults. Our revenues expanded an impressive 141% versus last year on the back of growing patient and test volumes, improved pricing and an increasingly optimised service mix. While top-linegrowth continued to be bolstered by our Covid-19-related6 tests, I am happy to report that we have continued to witness robust growth in our conventional test offering for the second quarter in a row, signalling a sustained recovery which we expect to continue even as Covid-19-relatedvolumes begin to taper off. It is particularly important to highlight that the Group's conventional test volumes in 1H 2021 surpassed pre-Covid-19levels, coming in 4% higher than test volumes recorded in the same six months of 2019 after adjusting for the impact of the 100 Million Healthy Lives Campaign7. This is further evidence of the robust underlying demand for high quality diagnostic services present across our markets of operation, and of our continued ability to service this growing market."

"On a regional front, both our Egyptian and Jordanian operations continued to report strong revenue growth supported by our conventional and Covid-19-related service offering. Similar to the trend witnessed at the consolidated level, across both geographies we recorded robust growth in our conventional test portfolio supported by a widespread recovery of economic activity coupled with our multi-pronged efforts aimed at stimulating demand across the entirety of our service roster. Top-line growth in both countries was further buoyed by our home call services which continue to grow in popularity especially in our home market of Egypt, where tests performed directly in patient homes made up 25% of the country's top-line in the first half of 2021. Our ability to effectively ramp up the service in step with growing demand is enabling us to perform up to five thousand house visits per day, helping us to tap into new segments of the population while boosting our tests per patient as patients enjoy the added comfort of having the tests administered in their own homes. House call services represent an important driver of future growth for the Company well beyond the end of the Covid-19 crisis, and as such we are continuing our efforts to expand and further streamline the service. In parallel, we are also seeing growing contributions coming from our radiology venture, Al-Borg Scan, which recorded year-on-year revenue growth of 124% as tests performed more than doubled in the first half of the year. To capitalise on the attractive growth opportunities offered by the segment, we are currently aiming to launch at least three new Al-Borg Scan branches over the coming twelve months. Looking ahead, we expect to continue recording growing contributions to consolidated revenue and profitability as Al-Borg Scan's operations ramp up further."

"At our Nigerian operations, we witnessed sustained top-line growth of 68% for the first half of this year. This comes as our investments to revamp Echo-Lab's operations and strategic marketing efforts continue to bear fruit, attracting an increasing number of patients to our branches. This is a particularly noteworthy achievement in light of the multiple political and pandemic-related difficulties faced over the last year. Finally in Sudan, despite recording an impressive 217% year-on-year revenue expansion in local currency, the significant devaluation of the Sudanese Pound in February 2021 continued to weigh on the country's results. Despite this, we remain committed to the country in the long-term, with management hard at work to continue driving sustainable long-term growth beyond the current difficult operating environment."

"Further down the income statement, we reported impressive margin expansions at all levels of profitability supported by strong top-line and the subsequent dilution of IDH's fixed costs. Additionally, starting in the second

  1. Covid-19-relatedtests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other Covid-19-related tests which include a bundle of routine inflammatory and clotting markers (which witnessed strong demand following the outbreak of Covid-19) such as Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), among others.
  2. The 100 Million Healthy Lives Campaign which ran from November 2018 through June 2019. As part of the Campaign, the Group performed 2.4 million tests in 1H 2019.

Integrated Diagnostics Holdings plc 4

HALF-YEAR 2021 REPORT

London | 2 September 2021

quarter of this year we recorded a decline in raw material as percentage of revenues to 16.8% compared to 19.3% in the previous quarter. This was partially due to a decline in Jordan's Covid-19-positive cases requiring confirmatory retests, and is also directly attributable to our successful efforts to reduce PCR test kit costs. Overall, strong top-line growth combined with increased cost efficiencies, higher interest income, and lower provisions booked in the first half of 2021, helped drive a nearly fourfold increase in net profit for 1H 2021 which reached EGP 668 million with an associated margin of 29%."

"Heading into the second half of the year, our strategic priorities remain unchanged as we aim to capitalise on the positive momentum witnessed across both our operations and the wider macroeconomic context. In the short-term we will continue to assist governments in Egypt and Jordan in their fight against the Covid-19 pandemic providing our full roster of Covid-19-related services across both our branches and through our expanded house call service. On this front, I am very happy with our efforts to secure multiple new partnerships over the last few months to offer PCR testing to travellers in both Egypt and Jordan. Most importantly, I am pleased to note that Biolab, our Jordanian subsidiary, has been selected as the preferred bidder by Airport International Group (AIG), the operator of Amman's Queen Alia International Airport, to carry out PCR testing for passengers arriving in Jordan. As part of the agreement, Biolab will also offer rapid PCR testing for Covid-19 to departing passengers who were not able to do a PCR test prior to reaching the airport. Through this landmark partnership, we will be able to continue playing a frontline role in the fight against the Covid-19 virus in Jordan while further expanding our reach and patient base in the country. In parallel, we are looking to sign additional strategic deals with international air carriers to perform PCR tests for passengers similar to our existing agreements with National Air Services (NAS) and Pure Health UAE which see us conduct PCR testing for passengers flying from Egypt to Kuwait and the UAE. Our ability to secure such partnerships is proof positive of the strong reputation enjoyed by IDH both locally and internationally, and further strengthens our offering for international travellers which currently sees the Company offer internationally-accredited PCR tests to travellers within and outside the MENA region. Meanwhile, we are working tirelessly to deliver on our post-Covid-19 growth strategy which will see us leverage our expanded patient base, branch network, and service offering to drive new sustainable growth in the years to come. To this end, in the first six months of the year we successfully added 14 new branches in our home market of Egypt, keeping us on track to meet our goal of 30 to 35 new lab rollouts for 2021 and helping us to further cement our leadership position in the country's private sector diagnostics market. In parallel, we continue to assess potential growth opportunities across new African, Middle Eastern, and Asian markets, and have secured a USD 45 million loan from the International Finance Corporation (IFC) to finance our growth plans in the coming period."

"In light of our half-year results and the encouraging recovery witnessed across our markets, I am confident that the Group is on track to deliver a record-breaking performance in 2021, with year-on-year revenue growth surpassing the 70% mark and a normalised EBITDA8 margin of 47% to 49%. We expect our full-year performance to be supported by both our conventional test offering, which in 1H 2021 continued to witness a robust rebound, coupled with continued strong demand for our Covid-19-related portfolio. Moreover, with Egypt expected to record a new wave of infections later this year, we could see greater than forecasted demand for our Covid-19-related offering in the second half of 2021, with the segment potentially pushing consolidated top-line growth into the 80% range, with an EBITDA margin of around 50%."

- End -

8 Normalised EBITDA is calculated as operating profit plus depreciation and amortization and minus one-off fees incurred in 1H 2021 (EGP 29 million) related to the Company's EGX listing completed in May 2021.

Integrated Diagnostics Holdings plc 5

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IDH - Integrated Diagnostics Holdings plc published this content on 02 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 September 2021 08:01:08 UTC.