Investor Presentaiton
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Médica Sur
2017 Annual Report
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INNOVATION AND RENOVATION OF THE FACILITIES
On the other hand, as center of our growth and infrastructure improvement strategy, during 2017
147.1 million pesos were invested, 92 million pesos were used for the Hospital remodeling, 20.6
million pesos were implemented in informatics improvements, 19.3 million pesos in renovation of
medical equipment, 10.2 million pesos in laboratory branches and 5 million pesos in minor assets.
In this sense, the remodeling of floor 5 & 6 was concluded and the remodeling of the 4th floor began,
whereby we incorporate the highest standards of quality and hygiene and create a warmer environment
for our patients and our families. Likewise, in November the first branch of our new generation of
Medica Sur Laboratories was inaugurated in Cuernavaca, Morelos, under a unique service concept
and exclusive ambiance, designed for the satisfaction of our patients. This new concept has a wide
variety of services and cutting-edge equipment that will have double reading on the imaging studies
and will be 100% digital.
During 2017, Médica Sur Group became bigger and stronger thanks to the efficient integration of
Laboratorio Médico Polanco and Laboratorios Clínicos de Puebla. This integration positioned us
as key player within the diagnosis sector in our country, reason why we will continue growing and
differentiating ourselves by being the only contestant in this sector with the medical backing of a
hospital as is Médica Sur. Likewise, it gives us the possibility of reaching out people of Mexico City
and the Metropolitan Area, State of Mexico, Morelos, Puebla, Querétaro, Quintana Roo and Tlaxcala,
with the most modern laboratories of the country, offering more clinical analysis and a wide variety of
diagnostic imaging services and other specialties.
Additionally, Médica Sur integrated new partners and advisors with a proven professional trajectory
thanks to the incorporation of the private investment fund "ProActive Capital". This will allow
continuing to strengthen the growth strategy with the commitment for the excellence in the health
service provision, both in the hospital sector as well as in the clinical diagnosis sector and boost the
corporate government by sharing the same values and ethical principles.
FINANCIAL PERFORMANCE
Regarding financial performance, 2017 was a year of moderate economic growth for Mexico, with
high volatility associated to the uncertainty regarding the future of the commercial relationship of our
country with the USA, paired to political uncertainty among others. With the previous being said, it is
important to highlight that in Medica Sur we achieved to increase our Income meaningfully by going
from 2,510.40 million pesos in 2016 to 3,431.4 million pesos in 2017, the Operative Profit increased
from 513.1 million pesos and there was an Operative Margin of 15.0%, the EBITDA was 733.5 million
pesos reaching an EBITDA Margin of 21.4% and the Net Profit increased 85.7 million pesos by going
from 146.2 million pesos in 2016 to 231.9 million pesos in 2017. The previous is due to the cost and
expenditure control plan, as well as the reengineering of the operative processes and the efficient
integration of the laboratories.
Regarding our assets, we have defined a plan for the maximization of the value of real estate assets
seeking to develop a medical complex, comparable to the highest-prestige medical destinations in
other parts of the world. Thus, based on this target, in November there was an allocation of the
adjacent land to the hospital campus to a Guarantee and Administration Trust Fund in order to,
subject to a series of conditions, Médica Sur transmitting a 24,000m² area in favor to Sordo Madaleno
Group, in which this group plans to build a mixed-use real estate development with commercial area.
Médica Sur preserved the ownership of the additional fraction of the real estate (26,704 m²), with a
construction potential equivalent to 225,000 m², meaning, Médica Sur keeps 73.2% of the density of
the construction, while Sordo Madaleno Group acquires the remaining 26.8%.
Finally, we would like to thank the confidence of our patients, the effort of our valuable group of
doctors, nurses, administrative and support staff, as well as the backing of who has trusted us with
their resources. Likewise, we would like to renew our commitment to continue striving to offer the
best alternative of ethical and high-specialty medicine in Mexico with fair profit for shareholders.
Kind Regards,
Dr. Misael Uribe Esquivel
Chairman of the Board of DirectorsView entire presentation