Sonic Healthcare Limited · ASX:SHL
Sonic Healthcare — Shareholder Meeting (November 2004)
21 slides from Sonic Healthcare's shareholder meeting presentation, Nov 25, 2004
Slide 1: Annual General Meeting 25 November 2004
SONIC HEALTHCARE LIMITED Annual General Meeting 25 November 2004 Dr Colin Goldschmidt Managing Director | SONIC HEALTHCARE
Slide 2: Current Status
Sonic Healthcare Current Status ie Company in excellent shape e Record financial results FY 2004 _¢ On target to achieve FY 2005 guidance |e Larger entities showing strong earnings growth -e German acquisition outperforming _« Major new growth prospects in UK y 5 : y y : 5 5 7 : : i 5 5 7 y bf 5 5 &
Slide 3: FY 2004 Highlights
FY 2004 Highlights e Revenue growth 6.4% « Core NPAT growth 17.6% « Core EPS growth 14.8% e EBITA margin expansion 1.1% (110 basis points) e Full year dividend 30 cents per share (up 20%) e Five year funding agreements in place in Australia e Sonic enters German pathology market e Expanding UK patho
Slide 4: 2004 Guidance Delivered
2004 Guidance Delivered Revenue 1,020 - 1,035 1,037 EBITA 185-195 197 Sonic 2004 guidance unchanged since first released in August 2003 | | SONIC HEALTHCARE
Slide 5: FY 2005 Guidance Unchanged
FY 2005 Guidance Unchanged Revenue 1,037 1,290 - 1,330 26.3% EBITA 197 235 -245 21.8% SONIC HEALTHCARE
Slide 6: Trading Update Months to October, 2004
Trading Update 4 Months to 31 October, 2004 e Revenue and earnings in line with FY ‘O5 guidance 1 oh NAH OOANONNO ERNE e On target to achieve revenue and earnings forecasts ¢ German business tracking strongly since acquisition | SONIC HEALTHCARE
Slide 7: Revenue
Revenue Total Revenue e Acquisitions completed in FY 2004/5 - Omnilabs, SDSG Radiology, Schottdorf (29 June 2004) - IPN (August 2004) - Accord Diagnostics (completion pending) e Organic revenue growth (excluding acquisitions) ~ 6% - Australian pathology revenue growth in line with market - Australia
Slide 8: SHL Annual Revenue
SHL Annual Revenue 1,400 1,200 1,000 800 $M 600 400 200 9 | =_Za_ 1992 1993, 1994 1995, 1996 1997 2000 2004 2005(F) a Revenue ($M) 33 a AT 5B 89 387 628 4,310 SONIC HEALTHCARE
Slide 9: Strong Earnings Growth
Strong Earnings Growth EBITA ($M) 196.6 173.1 13.5% Core NPAT ($M) 117.0 99.5 17.6% Core EPS (cents) 43.4 37.8 14.8% Cash Generation ($M) 156.3 137.4 13.8% ive years of double-digit EPS growth! Core = Before Amortisation of Intangibles & SONIC HEALTHCARE
Slide 10: Earnings Margin Growth
Earnings Margin Growth EBITA Margin 18.9% 17.8% +110 bps EBITDA Margin 23.0% 21.9% +110 bps e Strong margin growth in FY 2004 e Local entity cost management Outstanding management teams throughout Sonic Stability and commitment of CEOs, managers, pathologists/radiologists e Central Sonic synergy ini
Slide 11: Sonic EBITA Margin Expansion
Sonic EBITA Margin Expansion 20% 19% 18% 17% 16% 15% 14% : T 2002 2004 FY 2005 margins will be diluted by Schottdorf and IPN | SONIC HEALTHCARE
Slide 12: Full-year Dividend
Full-year Dividend Full Year Dividend ¢ Growth in dividends continues to increase e Fully franked to 30% e Reflects ongoing strong cash flow in Sonic | SONIC HEALTHCARE
Slide 13: Full-year dividend Year History
Full-year dividend 10 Year History 35 30 25 Cents 20 per Share 15 10 1997 | 1998 1999 | 2000 | 2001 | 2002 | 2003] 2004 [a pividend (cents)|_ 3 | 4 [| 5 | 9 | 14 [ 15 | 17 [ 20 | 25 [ 30 SONIC HEALTHCARE
Slide 14: Debt Summary
Debt Summary Total Interest-bearing Debt Gearing (Net IB Debt / Equity) fo | 74 64 Net Interest-bearing debt / EBITDA | 2.62 2.50 Interest Cover (EBITDA / Net Interest) i oo 6.98 5.93 e New $700 million senior debt facility - Expected to be finalised by mid-December e Benefits of new facility - Redu
Slide 15: Australian Diagnostic Funding Agreements
Australian Diagnostic Funding Agreements e Pathology Funding Agreement - New agreement commenced 1 July 2004 - 5 year term - 5% compound industry growth rate 3% fee increase awarded in November 2003 e Radiology Funding - New agreement commenced 1 July 2003 - 5 year term - 5% average compound industr
Slide 16: IPN
SONIC HEALTHCARE IPN Sonic’s partial bid for IPN successful - Sonic equity now ~72% - Acquisition cost ~$43 million IPN to remain independent - Independently listed - Independently managed - Sonic Board representation (Chairman Colin Jackson) Pathology referrals - Potential to capture additional pat
Slide 17: Operating Companies
2/7 Operating Companies 14 Pathology Companies 9 Radiology Companies 1. Douglass Hanly Moir Pathology 1. Queensland X-Ray 2. Sullivan Nicolaides Pathology 2. SKG Radiology 3. Melbourne Pathology 3. Castlereagh Imaging 4. Diagnostic Medlab 4. Hunter Imaging Group 5. The Doctors Laboratory 5. Mercy Ra
Slide 18: U.K. Pathology
SONIC HEALTHCARE U.K. Pathology Three transactions to date - TDL acquisition - Omnilabs acquisition - TDL-UCLH joint venture TDL business stable and strong - Double digit revenue growth - Merger synergies from Omnilabs acquisition Relocation to new laboratory and UCLH merger - Completed successfully
Slide 19: Sonic Expands into Germany
SONIC HEALTHCARE Sonic Expands into Germany Sonic acquires 56% of The Schottdorf Group — 44% held by Dr Bernd Schottdorf (founding pathologist) Schottdorf Group — One of Germany’s largest pathology groups — Main lab near Munich, largest lab in Europe — Operations throughout Germany — Outstanding ser
Slide 20: Schottdorf Group Key Investment Features
Schottdorf Group Key Investment Features e Leading market position — One of four major national operators e Growth and profitability - Ongoing volume growth - Growth of new doctors - Revenue and earnings growth e Strong reputation e Long-standing customer relationships e Efficient workflow and logis
Slide 21: Future Growth
Future Growth e Australia - Market growth in diagnostics ~5% p.a. - Market share growth, especially pathology - Synergistic acquisitions - Marginal profit from revenue growth e New Zealand - Market growth - Market share growth e U.K. - TDL - Ongoing private pathology growth - Further joint ventures
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