Sonic Healthcare Limited · ASX:SHL
Sonic Healthcare — Citigroup Investment Conference 2004
24 slides from Sonic Healthcare's conference presentation, Mar 12, 2004
Slide 1: Citigroup Investment Conference
Citigroup Investment Conference London 11 March 2004 Dr Colin Goldschmidt Managing Director/CEO
Slide 2: Sonic Healthcare
Sonic Healthcare @ SONEC HEALTHCARE Q Medical Diagnostic Services a Pathology m Radiology ASX100 Company m Listed in 1987 = Market Cap ~$2 billion = Largest pathology company in Australia and New Zealand Growth » Acquisitions # Organic growth Margin Expansion a Marginal profit mw Synergies of scale
Slide 3: Revenue/EBIT Contribution by Division (FY2003)
Sonic Healthcare Revenue/EBIT Contribution by Division (FY2003) Revenue EBIT eeeyieg HEALTHCARE
Slide 4: Operating Subsidiaries: Pathology and Radiology Companies
25 Operating Subsidiaries 13 Pathology Companies 9 Radiology Companies Queensland X-Ray SKG Radiology Castlereagh Imaging Hunter Imaging Group Mercy Radiology Illawarra Radiology Group Palmerston North X-Ray Castlereagh Hong Kong Canterbury Medical Imaging i Douglass Hanly Moir Pathology/ Barratt &
Slide 5: Margin Expansion
Margin Expansion m Revenue growth and marginal profit « High fixed costs « Incremental volume at low unit cost « Acquisitional and organic growth m Synergy capture « Centralisation © Benchmarking w IT is Purchasing « Others SONEC HEALTHCARE
Slide 6: Scale Benefits and Marginal Profit in Pathology
Scale Benefits and Marginal Profit in Pathology @ Cost ($) SONEC HEALTHCARE Volume (Tests) 9 10 = Manual Tests —® Automated Tests
Slide 7: Margin Expansion through Rationalisation
Margin Expansion through Rationalisation Douglass Hanly Moir Pathology - Sydney 1987 2004 1,000 patients/day ; ; ; 14,000 patients/day eeeyieg HEALTHCARE
Slide 8: 2004 Guidance
2004 Guidance 2004 Guidance * — Growth* calculated using mid-point of 2004 guidance * Includes Omnilabs acquisition (loss in first half} # Intangibles amortisation $59-60 million * Assumes no new acquisitions « Second half seasonally stronger than first half SONEC HEALTHCARE
Slide 9: Sonic Healthcare Year History
Sonic Healthcare 10 Year History Annual Revenue ($M) EBITA ($M) 1400 4.200 1035) 975 1,800 FO 800 ™ 800 ad ow 387, 400 147 200 + cu se eg he 2 e's gy 9 ¢ 3 8 8 8 8 8 8 § § BE @ @ @ @ @ @ § & & & § § Core EPS Dividends 400 4 Be 38.0 oe 306 ae 26.0 Cents Cents a5¢ pershare 20.0 7 5 per 1804 Share 136+
Slide 10: Half Year Summary
Sonic Half Year Summary (1 July - 31 Dee 2003) o Excellent first half performance w EBITA up 13.6% w Core Net Profit up 14.1% (net profit up 35%) w Core EPS up 12.4% # EBITA margin 18.3% (up from 17.0%) ci Solid start to second half w January EBITA strong © Full-year guidance unchanged w# Revenue, E
Slide 11: Margin Expansion: EBITA Margin H1 vs Full-year
Sonic Margin Expansion EBITA Margin H1 vs Full-year @ SONEC HEALTHCARE 20.0% 19.0% 18.0% 417.0% 16.0% 15.0% 14.0% 13.0% 12.0% 18.8% 17.8% 17.1% mH Full Year 2002 2003 2004 = Full-year 2004 EBITA margin forecast derived from upper range of Sonic revenue and EBITA guidance
Slide 12: Growth
Sonic Growth a Earnings growth in H1, 2004 w EBITA growth------------- 13.6% w Core NPAT growth-------- 14.1% w Core EPS growth---------- 12.4% a Consistent EPS growth w Organic growth with marginal profit w Local cost management mw Sonic-wide integration synergies m Growth drivers in medical diagno
Slide 13: U.K. Pathology
Sonic U.K. Pathology a Three Transactions since April 2002 w Acquisition of TDL » Acquisition of Omnilabs « Joint venture with NHS mt UK pathology market ~£2 Billion SONEC HEALTHCARE
Slide 14: The Doctors Laboratory (TDL)
The Doctors Laboratory (TDL) @ SONEC HEALTHCARE Sonic acquired TDL in April 2002 Largest private pathology company in UK Based in London’s “Harley Street” district Co-founded by Dr Ray Prudo (Executive Chairman) in 1987 David Byrne (CEO) leads strong management team Strong revenue / EBIT growth rate
Slide 15: Omnilabs Acquisition
Omanilabs Acquisition a} Omnilabs acquisition from MIA completed in July 2003 a TDL/Omnilabs merger « Successfully completed in late 2003 o Losses until merger complete » Incorporated into 2004 guidance a} EBIT contribution from Omnilabs post- merger ~£1M p.a. « Commences after relocation to Whitfie
Slide 16: TDL-UCLH Joint Venture
TDL-UCLH Joint Venture a Major strategic move for Sonic/TDL a A significant Public Private Partnership in the NHS a Joint venture agreement for automated pathology m First of its kind in the UK © JV structured as a cost sharing arrangement w Cost savings from scale, automation, lab design, workflow
Slide 17: Whitfield St Laboratory
Whitfield St Laboratory @ SONEC HEALTHCARE Floor space 3,400 m? in total w Autolab ~700m2 w Balance split between TDL and UCLH operations Consolidation of 5 existing TDL/Omnilabs sites Fitout of Whitfield St facility essentially complete « State-of-the-art facility and equipment Significant excess c
Slide 18: UK/European Strategy
Sonic UK/European Strategy a To partner with established players in suitable markets ca TDL platform an ideal base for expansion in UK mw Private Pathology Market w NHS Market w Omnilabs and UCLH transactions provide evidence of incremental growth opportunities o European pathology markets w Fragmen
Slide 19: Sonic Healthcare Today
Sonic Healthcare Today eo Large and growing business w ~$1 Billion annual revenue « > 11,000 employed staff m Efficiency and productivity gains continuous o Excellent pathology and radiology services ® >16 million patients serviced in 2003 » >40 million tests performed in 2003 a Operational manageme
Slide 20: Core Values
Sonic Core Values Commit to service excellence Treat each other with respect and honesty Demonstrate responsibility and accountability Strive for continuous improvement Maintain confidentiality 2 82 82 82 2 eeeyieg HEALTHCARE
Slide 21: Successful Outcomes
Sonic Healthcare Successful Outcomes... o x o ‘kj 7 é ‘ o $ 2 z Good Values Good Leadership Good Image eeeyieg HEALTHCARE
Slide 22: Good To Great
“Csood To Great” Financial The Best in Success the World SONEC HEALTHCARE
Slide 23: Future Growth Strategy
Future Growth Strategy a Australia and New Zealand w Organic growth and marginal profit w Efficiency gains from existing operations w Synergistic “bolt-on” acquisitions mc UK pathology w TDL organic growth and marginal profit w TDL/Omnilabs/UCLH merger benefits w NHS and Private market expansion m E
Slide 24: Thank you
Thank you
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