Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — Macquarie Emerging Leaders Conference (May 2005)
22 slides from Ramsay Health Care's conference presentation, May 6, 2005
Slide 1: Macquarie Emerging Leaders Conference
dl Ya TH CARE |! Macquarie Emerging Leaders Conference
Slide 2: Ramsay's growth strategy
> Ramsay’s growth strategy > Affinity acquisition > The New Ramsay - Strategic positioning in a growth industry > Funding
Slide 3: Ramsay's Growth Strategy
reaver Ramsay's Growth Strategy
Slide 4: Ramsay's Growth Strategy
Ramsay’s Growth Strategy Focus on core hospital management business Invest in existing facilities Grow through acquisitions in the hospital sector >» Affinity acquisition in line with Ramsay’s growth strategy Pursue opportunities outside hospitals, close to core competencies - aged care
Slide 5: Our strategy has delivered profitable growth
= Our strategy has delivered profitable Affinity Acquired April'05 | 1,200 5 Benchmark Group Acquired Jul‘04__ r 9.00 Hollywood Veteran Hospital _ privatised. Acquired Jan'94__ ___ Greenslopes Major L 8.00 4.000 4 : : - | Expansion Opened May'03 ’ _ Greenslopes Veteran Hospital : _ privatised. Acqui
Slide 6: Favourable Industry Dynamics
vy Favourable Industry Dynamics Australian private hospital industry is a growth industry Ramsay well positioned to capitalise on continuing strong demand for private hospital services. Growth underpinned by: Favourable demographic trends (eg ageing population) Bipartisan support for policies that p
Slide 7: Affinity Acquisition
reaver Affinity Acquisition
Slide 8: Strategic Rationale
Strategic Rationale » Opportunity to bring together two companies with the best portfolios of quality hospitals » Staff, doctors, infrastructure » Strong referral base » Significant upside due to: » Integration synergies » Ongoing improved micro-management » Enhance Ramsay’s positioning in a growing
Slide 9: Unique opportunity to significantly increase Ramsay's presence in core business
Unique opportunity to significantly increase Ramsay’s presence in core business, creating nation’s largest private hospital operator Enhances Ramsay’s ability to take advantage of continuing demand for private hospital services Upside through application of key elements of its successful business mo
Slide 10: Overview of Affinity Acquisition
1y Overview of Affinity Acquisition Total acquisition outlay $1,428m plus $71m transaction costs Acquired on CY04 EBITDA multiple of 9.7x vs Ramsay CY04 multiple of 10.7x (pre synergies/post divestment) Funding combination of equity, debt and hybrid Agreement to divest certain hospitals for net $406
Slide 11: Profile of Affinity
Profile of Affinity s» Largest Australian private hospital operator >» 21% of private hospital beds >» 25% of all patients admitted to private hospitals » Facilities provide comprehensive array of acute services Affinity Existing Portfolio Australia Indonesia Total Hospital Facilities 48 3 51 Beds!
Slide 12: Synergies from Affinity
Synergies from Affinity Integration of corporate functions More efficient and cost effective labour management Scale advantages Pre-tax cost synergies of $35m per annum targeted by end-FY08 — 45% by FY07 Pre-tax revenue synergies of $15m per annum targeted by end-FY08 —- 50% by FY07 One-off capex re
Slide 13: Integration Plan
Integration Plan Ramsay has a strong track record of making value-added acquisitions and integrating them well » Integration of Affinity to be substantially complete over next 24 months Operations Corporate functions » Strategic review of hospitals Divestment of 14 hospitals for $406m in net proceed
Slide 14: The New Ramsay - Strategic positioning in a growth industry
The New Ramsay - Strategic positioning ina growth industry
Slide 15: The New Ramsay
The New Ramsay » Acquisition and restructure creates premier private hospital portfolio in Australia with quality hospitals in growth areas and annual revenue in excess of $2 billion # New portfolio to have 27% market share (number of beds) » 74 hospitals > 8,117 beds » More than 20,000 employees #
Slide 16: New Ramsay Portfolio
New Ramsay Portfolio Operating Division Facilities Licensed Beds? Medical Surgical 61 7,205 Psychiatric 9 648 Rehabilitation 4 264 Total 74 8,117 1Post planned divestment. 16
Slide 17: Pro Forma Revenue by Division and State
Pro Forma Revenue by Division Pro Forma Revenue by State (FY04) (FY04) Rehab SA 1, e! Psychiatric io Bh Aged Care 4% ‘Oo Veteran 14% Med/Surg Other 60% 17
Slide 18: Funding
reaver Funding
Slide 19: Funding
Funding Uses of Funds ($m) Sources of Funds ($m) 711 1,499 200 1,428 ' PC 260 406 633 Acquisition Transaction Costs Ordinary Equity Hybrid (CARES) Asset Sales Bank Debt? Consideration 1 Consists of fees and stamp duty. 2 Senior bank debt of $1,039m, of which $406m will be paid down using proceeds of
Slide 20: De-leverage Strategy
De-leverage Strategy Divestments to reduce debt by $406m, bringing senior debt post divestment to ~$950m (including existing debt) High cash flow business and Ramsay has strong history of converting EBITDA to operating cash flow Strong cash flow generation capacity underpins ability to de- lever » A
Slide 21: Enhanced growth potential
Enhanced growth potential Affinity acquisition enhances Ramsay’s long-term growth potential # Acquisition synergies » Integration » Economies of Scale « Upside through value-added management, margin improvement « Brownfield capacity expansion > Future industry capacity shortage 21
Slide 22: _TH CARE
Bs _TH CARE
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