Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — Shareholder Meeting (November 2006)
27 slides from Ramsay Health Care's shareholder meeting presentation, Nov 22, 2006
Slide 1: Annual General Meeting 22 November 2006
i OS a): SE eee ; z aS : oo : ail: , 7 7 ce : 3 iG. 7 L Mei ee - 8. ANNUAL ENERAL MEETING 22 November 2006
Slide 2: Chairman's Address: Building on our Assets
as CHAIRMAN’S AMSA Building on our Ass ¢ A year of strong earnings growth and beginning the significant Affinity integration ¢ Repositioning of portfolio ¢ Preserving best of Ramsay and Affinity cultures ¢ Strong FY06 result underscores strength of Ramsay management expertise in an industry with str
Slide 3: Ramsay Profile
RAMS Ay RAMSAY PRO HEALTH CARE LENOIR OSDIR PISO II IDS IsEOS ¢ Australia’s largest private hospital operator >» 65 Australian facilities, 3 Indonesian facilities > More than 7,200 beds > More than 20,000 employees > 25% of private hospital beds > 28% of private hospital admissions >» Over 750,000 p
Slide 4: Strategic Position
ramsay STRATEGIC HEALTH CARE ¢ Size and strategic position of portfolio brings market strengths and growth prospects >» Economies of scale > Operating and financial leverage > Portfolio rationalisation and maximisation > Relationships with stakeholders > Strong influence in growing market > Margin u
Slide 5: Operating Environment
Ramsay OPERATING BE HEALTH CARE ¢ Environment and demographics support continuing strong demand for private hospital services > Balanced health care system > Private health insurance membership remains at historically high levels >» Ramsay in strong position to manage industry challenges including c
Slide 6: Financial Highlights
ramsay FINANCIAL HI HEALTH CARE * Strategic review maximises strength and positioning of Australia’s best hospital portfolio * Core EPS growth ahead of initial FY2006 guidance and half year upgrade * Revenue from continuing operations up 73% to $2.0 billion * Total Core Net Profit (including profit
Slide 7: EBIT up 79% for the year
EBIT up 79% for the year
Slide 8: Ramsay Core NPAT Growth
RAMSAY CORE NPAT GROWT HEALTH CARE ees FY 2001 FY 2002 Fy 2003 FY 2004 FY 2005 FY 2006 Core NPAT from continuing operations up 82% for the year
Slide 9: Core EPS Growth
HEAL TH CARE Cents/share FY 2001 Fy 2002 FY 2003 FY 2004 FY 2005 FY 2006 = Core EPS from continuing operations up 24% for the year = Average annual compound growth rate for continuing operations over 5 years of 25% (base year FY 2001)
Slide 10: Ramsay Dividend Growth
Pd ay Ramsay DIVIDEND GROWTH HEALTH CARE ees Cents/Share FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 * Interim Dividend * Final Dividend * Dividend fully franked 2006 full year dividend up 20% 10
Slide 11: Ramsay Revenue Growth Timeline
RAMSAY REVENUE GROWTH TIMELINE. HEALTH CARE $m 2,400 5 Affinity Acquired 2,200 4 Apr’05 2,000 + Hollywood Veteran Benchmark Group Perth acquired & Acquired Jul’04 1,800 + privatised Jan’94 Greenslopes Major 1,600 + Expansion Opened May‘03 Greenslopes Veteran 1,400 + Brisbane acquired & ; privatised
Slide 12: Ramsay Share Price Growth
ts iT Me a aan aw : as RAMSAY SHARE PRICE GR' oie O HEALTH CARE we é ne WwW ies ee $12.00 2 ae — $10.00 : : 2 i / f ete _ | $3.00 La oe on poo - - ao oo oe a i a . o 2 $6.00 _ _ Share Price $ _ (o00'$) papeaL eumMpop, $4.00 Lo ay a ct $2.00 TU Vee ray | ee A ae re i i Vini He Ale mi el Hil i| All Wi
Slide 13: Share Price Performance vs ASX 200 Indices
ATS ean aa as ‘RREI RAMSAY — HEALTH CARE : 140% i 120%4 0 i ay _ . - 2 _ = = 100% a iz ee a 80% a 60% % Change 40% : — oo 5 | / 20% 4 7 ce . — ' . >. 0% -20% |—Ramsay ewe ASX 200 Acc Index “ASX 200 Healthcare Acc Index 1 July 2004 RHC - $5.35 RHC - $9.61 ASX 200 ~ 3536.9 ASX 200 — 5419.7 Healthcare
Slide 14: Ramsay Balance Sheet
Ramsay BALANCE SHE HEALTH CARE RII Os ROSIE RO PISO DIL IO IY CSR ¢ Strong cash flow generation and cash conversion ¢ Faster than expected debt reduction creates significant capacity to fund further growth 14
Slide 15: Ramsay Strong Operating Cash Flow
ae | as . RAMSAY STRONG OPERA HEALTH CARE $m 280 4 240 + 200 160 120 80 4 40 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 # EBITDA Gross Operating Cash low * Continuing effective cash flow management = Gross operating cash flow of $260m exceeds EBITDA of $252m 15
Slide 16: Ramsay De-leveraging
Ba ais RAMSAY DE-LEVERAG|! HEALTH CARE $m 1,500 4 1,200 900 Benchmark 600 4 _ Acquisition. 300 =—@Net Debt (D) =< Shareholder Equity (E) Jun'04 Dec'o4 Jun'05 Dec'05 Jun'06 Gearing: (D/D+E) Ratios: « Long term target Leverage Ratio (Net Debt/EBITDA) in range of 3.0 x to 3.5 x (currently 2.8 x) 44% 48
Slide 17: Ramsay FY06 Objectives
RAMSAY FY06 OBJECTI\ HEALTH CARE ¢ Focus on core hospital management — delivered strong organic growth at Ramsay and Affinity hospitals ¢ Strategic review — portfolio restructuring completed, maximising value and positioning of facilities ¢ Divestments — realised strong proceeds of over $650 million
Slide 18: Three Phase Growth Strategy
¢ 1%t phase - Continue to grow earnings at hospital level > Organic growth >» Achieve Affinity synergies > Earnings uplift from Ramsay management ¢ 2d phase - Brownfields expansion ¢ 34 phase - Acquisitions > Hospital acquisition opportunities still exist in Australia > Explore offshore opportunitie
Slide 19: Ramsay 1st Growth Phase
re] : as | RAMSAY Ist GROWTH PH HEALTH CARE ° Focus on hospital micro management delivered solid profit growth in FY06 for both Ramsay and Affinity hospitals ¢ Affinity 3 year integration plan on track to achieve $50 million of synergies > Pre-tax cost synergies of approx $15 million achieved in FY0
Slide 20: Ramsay 2nd Growth Phase
un : ais / RAMSAY 2nd GROWTH P HEALTH CARE ¢ Inthe process of identifying best investment opportunities in portfolio ¢ Financial headroom to invest up to $400 million in enhancements and capacity expansion ¢ Investment criteria of 15% return on investment targeted over short to medium term ¢ To star
Slide 21: Ramsay 2nd Growth Phase: Strategic Development Program
aw ais RAMSAY 2nd GROWTH PI HEALTH CARE Strategic development program: * Develop large multi-service hospitals to attract increased referrals in major metropolitan areas including: » Brisbane (Greenslopes) >» Gold Coast (Pindara, John Flynn) » Sydney (North Shore, Westmead, St George Private Hospita
Slide 22: Hollywood Redevelopment Project
as HOLLYWOOD RAMSAY Redevelopment Proj LOTS ISOS RII A ee e--,-,,rtr™”™t~”—™—“(i—==E ¢ Strategic repositioning of Hollywood continues ¢ Master Plan includes additional >» 90 Beds » 4 Operating Theatres » Consulting Suites >» Carparking >» Day Surgery/Facilities » Expanded Infrastructure * Developmen
Slide 23: St George Private Planned Development
as ST GEORGE PR RAMSAY Planned Developme wuee IRR Dae esac ueoox uae uatentons ¢ Identified as a major strategic location ¢ Ist phase - one additional theatre, day surgery re-development of support services (due to be completed Feb07) ¢ Purchased two adjacent land sites, another two sites in negotia
Slide 24: Ramsay 2nd Growth Phase: Cumulative Capex Spend
Ba as RAMSAY 2ND GROWTH P HEALTH CARE Cumulative Capex Spend FY 2006 FY 2007 FY 2008 FY 2009 FY2010 FY 2011 FY 2012 = Brownfield Capex = 'Catch-up' Capex = Average construction profile 18 months * Ramp up to ROI of 15% on brownfields over 2 to 3 years post construction completion * ‘One-off catch-up
Slide 25: Ramsay 3rd Growth Phase
Be Ramsay 3rd GROWTH HEALTH CARE ¢ Investigating acquisitions >» Further Australian hospital acquisitions in areas where there are no competition issues » Opportunities to expand Ramsay hospital franchise offshore > Other areas of health care close to core management competency 25
Slide 26: Ramsay FY2007 Outlook
Ramsay FY 2007 OUTL HEALTH CARE ¢ Targeting growth in FY07 of 15%-20% in Core EPS, over FY06 Core EPS of 44.9 cents, based on: >» Organic growth of Ramsay and Affinity hospitals > Realisation of synergies and improved earnings from Affinity under Ramsay management ¢ First 4 months on track to meet g
Slide 27: Questions
io a ei a a eel Hii) See i ep PAM 2 Ge Mei ee Questions
Ramsay Health Care — Shareholder Meeting (November 2006) on 6ix