MLP CARE in Brief
MLP Care leads the Turkish healthcare sector with its hospital facilities, affiliates and over 12 thousand permanent employees.
MLP Care is Turkey’s largest multidisciplinary hospital group.
Originally founded in 1993 as Medical Park, MLP Sağlık Hizmetleri A.Ş. (MLP Care) continues to move forward with Liv Hospital brand and VM Medical Park concept. As the largest healthcare group in the industry, MLP Care currently operates 31 hospitals in 17 cities across the country – from Bursa and Elazığ to Trabzon and Antalya. MLP Care leads the Turkish healthcare sector with its hospital facilities, affiliates and over 12 thousand permanent employees.
Boasting a powerful brand and a broad portfolio of services aimed at diversified customer segments, MLP Care is Turkey’s largest multidisciplinary hospital group. The Company’s highly centralized business model supports hospital field operations and central management. MLP Care has a nationwide network that spans the most populated cities in Turkey.
Maintaining strong and profitable growth, MLP Care’s business model is supported by a balanced payer profile. The Company’s senior management team consists of senior professionals who have extensive industry knowledge and experience gained at Turkey’s leading healthcare institutions and enterprises.
2 Brands and 1 Concept Targeting Different Segments
MIDDLE-UPPER MASS
PREMIUM MASS
PREMIUM
Balanced Revenue Sources
MLP Care provides its services under 2 brands and 1 concept with 3 pricing strategies in Turkey. This approach enables the Company to target diverse segments in the population. These are respectively; Medical Park and Liv Hospital brands and VM Medical Park concept.
Message from the Chairman and CEO
I believe that we were able to leverage the strength we derived from the public offering in many processes. We managed to do this by focusing more strongly on our strategic priorities in daily operations and taking our business methods a step further with innovative practices.
Esteemed Shareholders,
Our financial statements show that last year we achieved strong growth, as promised. In 2018, both domestic and medical tourism revenues increased. Our successful IPO marked a milestone in the history of our Group.
Being a significant source of funding, the IPO not only helped us strengthen our balance sheet, but it also accelerated our efforts to improve the corporate governance. During the year, we also opened two new hospitals, the first one in Pendik, Istanbul, and the second one in Mersin, which was another source of pride for us. All of our branches serve thousands of people every day.
I believe that we were able to leverage the strength we derived from the public offering in many processes. We managed to do this by focusing more strongly on our strategic priorities in daily operations and taking our business methods a step further with innovative practices.
In 2018, we accelerated process improvements and built cross-functional teams to analyze the key trends in the healthcare industry and the changing expectations of our patients, in line with the dynamic hospital management model, which is widely known as agile working in the business world. We created a more functional model that is open to change by introducing many innovative service and appointment practices, such as flexible work schedules to meet guest expectations. We focused on optimizing the number of appointments and achieving a high level of patient satisfaction by implementing the Demand-Driven Appointment Scheduling (DDAS) model.
I’m glad to say that as a result of these efforts, we achieved major improvements in our focus areas during the last year. By the end of the year, our patient satisfaction rates reached record high levels while our Net Promoter Score increased by 12 points between August and November. These successful results suggest that we are on the right track.
Another indicator of our success is the international awards that we received in 2018. We won Brandon Hall Group Excellence Award in the category of “Best Learning Program Supporting a Change Transformation Business Strategy”. Our call center team, who are committed to patient satisfaction, received the “Customer Service Department of the Year” and “Customer Service Team of the Year” awards at the International Business Stevie Awards.
We will continue our efforts to strengthen our organization further in the coming year. We will continue to create value for our country and nation with innovative projects.
I should mention that one of these areas will be artificial intelligence. The use of artificial intelligence has become a hot topic globally due to the rapid advancements in healthcare technology, and we are preparing to lead the way in introducing AI applications in the Turkish healthcare sector. In 2019, we will ramp up efforts in this area and we will continue to support advancements in medicine and science with new projects.
Like all powerful organizations, we owe our success to the hard work and commitment of our employees... Therefore, I would like to extend my gratitude firstly to our large family of 20 thousand people, and also to our valuable shareholders for their continued support of our journey.
Respectfully yours,
DR. MUHARREM USTA
Chairman of the Board of Directors and CEO
Highlights
MLP Care, strengthened its capital structure by initial public offering in February, completed 2018 more strongly and performed above expectations.
IPO Bolstered the Capital Structure
Completing the initial public offering in February 2018, MLP Care;
- Reinforced its corporate identity,
- Strengthened its brand recognition,
- Implemented the principles of transparency and accountability more effectively,
- Accelerated fund raising through capital injection.
Smart Use of IPO Proceeds
- MLP Care, used the TL 600 million of funds generated from the IPO to pay back part of the FX denominated syndication loans in order to reduce the financial debt.
- Together with this, it is aimed to reduce the financial expenses and FX losses arising from financial debt.
- As a result of capital injection, financial structure and income generation capacity of the Company were strengthened.
2 New Hospitals Opened in 2018
Following the admitting patients of VM Medical Park Pendik Hospital in March, with the opening of VM Medical Park Mersin Hospital, the Company introduced its 31st hospital to the public at the 25th year of its establishment.
Amendments made in Healthcare Applications Communique of the Social Security Institution (SUT) Prices
As a result of the amendment of the SUT prices on July 5, 2018, prices of the complex inpatient procedures were increased whereas the prices of some outpatient procedures were reduced.
FX Exposure Mitigated by Hedging
MLP Care, has hedged 36% portion of the total EUR 161 million principal and interest payments of the EUR denominated syndicated loan for the 2019-2020 period, using cross currency swap transactions.
All Lease Agreements Converted to Turkish Lira
As of September 12, 2018, the conversion of foreign currencies of securities and real estate purchase and sale and leasing contracts into Turkish Lira in the next 30 days was enacted by the amendment of the decree on the Protection of the Value of Turkish Currency published in the Official Gazette. With this decree, All of the FX denominated hospital building lease agreements converted to TL as of October 2018.
Key Indicators
In 2018, MLP Care’s EBITDA increased by 23.5% to TL 505 million vs. last year.
MLP Care completed 2018 with operational success above its targets and fulfilling its promises to investors during the initial public offering.
REVENUE TL MILLION
* CAGR: Compound Annual Growth Rate
EBITDA* TL MILLION
* Adjusted
EBITDAR* TL MILLION
* Adjusted
Main Income Statement Items
| 2017 | 2018 | Change | |
|---|---|---|---|
| Revenue (TL million) | 2,576 | 3,132 | 22% |
| Operating Income (TL million) | 213 | 301 | 42% |
| Operating Income Margin | 8.3% | 9.6% | 138 bps |
| Net Profit/(Loss) (TL million) | (133) | (104) | (22%) |
| EBITDA (TL million) | 379 | 471 | 24% |
| EBITDA Margin | 14.7% | 15.0% | 34 bps |
| Adjusted EBITDA (TL million) | 409 | 505 | 23% |
| Adjusted EBITDA Margin | 15.9% | 16.1% | 25 bps |
| Adjusted EBITDAR (TL million) | 598 | 748 | 25% |
| Adjusted EBITDAR Margin | 23.2% | 23.9% | 68 bps |
| Free Cash Flow (TL million) | 299 | 50 | (83%) |
Main Balance Sheet Items
| 2017 | 2018 | Change | |
|---|---|---|---|
| Cash and Cash Equivalents (TL million) | 218 | 223 | 3% |
| Total Assets (TL million) | 2,721 | 3,239 | 19% |
| Equity Attributable to the Owner of the Company (TL million) | 16 | 474 | n.m. |
| Net Financial Debt (TL million) | 1,381 | 1,243 | (10%) |
| Net Financial Debt/Adjusted EBITDA | 3.4 | 2.5 | (27%) |
Our Business Model
Maintaining strong and profitable growth, MLP Care’s business model is supported by a balanced payer profile.
We progress on our journey and put our 26 years of experience to provide high quality healthcare services at affordable prices. We continue to grow with our superior medical staff and technologic infrastructure to ensure a healthy future for Turkey.
Strong affiliations with universities and medical schools
- 673 academicians working as physicians at Group hospitals (30% of total physicians)
World-renowned for operational and surgical excellence
- Da Vinci Robotic Surgery System
- Gamma Knife Treatment
Best-in-class medical quality across the portfolio
- JCI Accreditation
- Global SRC* Standards in surgical procedures and “Centers of Excellence” awards in three centers
*SRC: Surgical Review Corporation
State-of-the-art infrastructure and advanced technology facilities
- 17 cities, 31 hospitals
- Over 20 thousand employees including over 12 thousand permanent employees and over 2,200 physicians
Sustainable financial growth performance
- Business growth through Top-up Health Insurance System
- Business growth through revenue diversification and medical tourism
MLP Care Activity Map
Boasting a powerful brand and a broad portfolio of services aimed at diversified customer segments, MLP Care is Turkey’s largest multidisciplinary hospital group.
Over
12 thousand
permanent employee
2.200+
Physicians in Group hospitals
HOSPITALS OPENED IN 2018
VM Medical Park Pendik Hospital
Opening: March 2018
Location: Istanbul
VM Medical Park Mersin Hospital
Opening: May 2018
Location: Mersin
Vision, Mission and Values
Since the opening of our first hospital, our Company has been constantly growing and improving; and the broad vision is the underlying reason behind this approach.
Values
We value people – reliability is our core indispensable principle
We make a difference with our services.
We are committed to scientific methods and continuous improvement.
We are an agile, goal- and success-oriented team.
We serve as a model institution with our ethical principles and professional ethics.
Vision and Mission
MLP CARE’S VISION
We aim to become a reference institution in abroad and the most preferred private healthcare service provider in Turkey.
MLP CARE’S MISSION
We work to ensure that all people live healthy lives.
Certifications and Awards
JCI (Joint Commission International) Accreditation Standards
Ministry of Health Quality Standards
SRC Center of Excellence Certification
Surgical Review Corporation Center of Excellence Award
Bond and Loans 2019 “IPO/Equity Capital Markets Deal of the Year” Award
Runner-up Award in the Healthcare Services category in Turkey’s Top 500 Service Exporters Survey organized by Turkish Exporters Assembly (TIM)
