Ryman Healthcare Ltd. · NZX:RYM
Ryman Healthcare — FY2019 Earnings Presentation
64 slides from Ryman Healthcare's earnings presentation, May 2019
Slide 1: Full year result
R Y M A N H E A LT H C A R E Full year result 31 March 2019
Slide 2: Audited full year highlights
Audited full year highlights Underlying profit* up 11.5% to $227 million Reported (IFRS) profit down 16.0% to $326 million Full year dividend increased to 22.7 cents, in line with underlying profit growth Operating cashflows $401 million, up 15% Land bank lifted to 7,000 beds and units * Underlying
Slide 3: 17 years of underlying profit growth
growth 17 years of underlying profit - $50m $100m $150m $200m $250m 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 3
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Slide 6: Alternative This holding is a great
Alternative Thisholding is a great shot pic. Can we zoom in and use this pic here instead of on the disclaimer page?
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Slide 8: Ryman Healthcare: Retirement living and care you can trust
- 15 May #aaifi0 #fageingas RYMAN HEALTHCARE RYMAN HEALTHCARE Retirement living and care you can trust
Slide 9: The 'gold standard' of care: 4 year certification
The ‘gold standard’ of care 4 year certification 90% 81% 80% 70% 60% 50% 44% 40% 40% 35% 33% 32% 33% 30% 21% 20% 10% Source: Ministry of Health. Percentage of care centres with four years’ certification by operator 0% (aged care providers with 15 or more care centres). Data at 20 May 2019. Ryman Pro
Slide 10: Introducing Ryman Delight
Introducing Ryman Delight 10
Slide 11: Population growth 80+
1.0m Population growth 80+ 0.8m 0.6m 0.4m 0.2m - 2008 2013 2018 2023 2028 2033 2038 2043 2048 NZ total population aged 80+ Victoria total population aged 80+ 11
Slide 12: Population growth 80+
1.0m Population growth 80+ 0.8m 0.6m 0.4m 0.2m - 2008 2013 2018 2023 2028 2033 2038 2043 2048 NZ total population aged 80+ Victoria total population aged 80+ 12
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Slide 14: Construction activity
Construction activity Nellie Melba Murray Halberg William Sanders Linda Jones Burwood East Lincoln Road Highton Havelock North Aberfeldie Hobsonville Ocean Grove Riccarton Park 14
Slide 15: Lifting the build rate
Lifting the build rate Nellie Melba Murray Halberg William Sanders Linda Jones Burwood East Lincoln Road Highton Havelock North Aberfeldie Hobsonville Target in 12 months Ocean Grove Subject to resource and building consent and various regulatory approvals. Riccarton Park 15
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Slide 17: Nellie Melba
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Slide 18: Nellie Melba
Nellie Melba Melbourne
Slide 19: Ocean Grove
Ocean Grove Victoria Site boundary is indicative only
Slide 20: Ringwood East
Ringwood East Melbourne Site boundary is indicative only
Slide 21: Burwood East
Burwood East Melbourne — os i a , Mu ll i Li “E 21
Slide 22: Highton
Highton Geelong Site boundary is indicative only 22
Slide 23: Aberfeldie
Aberfeldie Melbourne Site boundary is indicative only 23
Slide 24: William Sanders, Linda Jones, Murray Halberg
William Sanders Auckland Linda Jones Murray Halberg Hamilton Auckland
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Slide 26: Kohimarama
Kohimarama Auckland Site boundary is indicative only
Slide 27: Riccarton Park
Riccarton Park Christchurch Site boundary is indicative only
Slide 28: Park Terrace
Park Terrace Christchurch Site boundaries are indicative only
Slide 29: Havelock North
Havelock North Hawkes Bay Site boundary is indicative only 29
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Slide 33: 17 years of underlying profit growth
growth 17 years of underlying profit - $50m $100m $150m $200m $250m 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 33
Slide 34: Reported profit
Reported profit Mar 19 Mar 18 Underlying profit (non-GAAP) $227.0m $203.5m Unrealised revaluations of investment properties +$102.4m +$185.3m Deferred tax expense -$3.4 -$0.6m Reported net profit after tax $326.0m $388.2m Underlying profit is a non-GAAP (Generally Accepted Accounting Principles) mea
Slide 35: Operating cashflows
$500m Operating cashflows $400m $300m $200m $100m - 2014 2015 2016 2017 2018 2019 35
Slide 36: Investing cash flows $552 million
$600m Investing cash flows $500m $33m $35m $552 million $44m $27m $400m $300m $430m $296m $200m $100m $111m $54m - 2018 2019 Purchase of land New villages Care / systems Village upgrades 36
Slide 37: Total assets
$7bn $6bn Total assets $5bn $4bn $3bn $2bn $1bn - Sep 15 Mar 16 Sep 16 Mar 17 Sep 17 Mar 18 Sep 18 Mar 19 Bank debt Total assets 37
Slide 38: Development margin
35% 30% Development margin 25% Target range 20% 15% 10% Replace pic with construction pic 5% - 2012 2013 2014 2015 2016 2017 2018 2019 Group development margin Margin excluding Bob Scott 38
Slide 39: $885 million resales bank
$1,000m $885 million resales bank $800m $600m $400m $200m - 2014 2015 2016 2017 2018 2019 New Zealand Victoria The resale bank represents the extent that the current price exceeds the price paid by the current resident for the unit's occupancy rights. 39
Slide 40: Value of contracts not booked
$160m Value of contracts not booked $120m $80m $40m - 2016 2017 2018 2019 Presales are unconditional occupation right agreements which have been entered into by residents but have not been booked as the unit is not yet near complete. 40
Slide 41: Sales price vs median house price
$1.4m Sales price vs $1.2m median house price $1.0m $0.8m $0.6m $0.4m $0.2m - Melbourne Auckland Median house price - village areas Ryman - 2 bed Independent Ryman - Serviced The median house price reflects the average median house price over the last 6 months in the area surrounding our villages. 4
Slide 42: Long term capital efficiency
Long term capital efficiency $25 million raised at IPO in 1999 Invested $3.7 billion in portfolio since 1999 with no fresh capital Dividends of over $800 million paid since float* Self-funded growth Strong balance sheet * Includes final dividend of 11.9 cents per share that has been declared and is
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Slide 44: Appendices
Appendices
Slide 45: Appendix 1: Full year highlights
Appendix 1: Full year highlights Underlying profit up 11.5% to $227 million Reported (IFRS) profit down 16% to $326 million Full year dividend increased to 22.7 cents, in line with underlying profit growth Operating cash flows $401 million, up 15% Cash receipts up 15% to $1 billion 757 units and bed
Slide 46: Appendix 1: Full year highlights
Appendix 1: Full year highlights Increased investment in improving the resident experience Increased investment in team pay and development Continued strong demand for villages with only 1% of resale stock unsold at year end 97% occupancy at established care centres Tenth site secured in Victoria, t
Slide 47: Appendix 2: Sale of occupation rights
Appendix 2: Sale of occupation rights Mar 19 Mar 18 Existing units Independent 378 377 Serviced 446 448 824 825 New units Independent 302 365 Serviced 112 93 414 458 47
Slide 48: Appendix 3: Development
Appendix 3: Development Mar 19 Mar 18 Units and beds built Retirement village units built 464 446 Aged care beds built 293 86 757 532 Total retirement village units Independent 4,915 4,513 Serviced 1,963 1,901 6,878 6,414 Total aged care beds 3,660 3,367 Total retirement village units and beds 10,53
Slide 49: Appendix 4: Margins
Appendix 4: Margins Mar 19 Mar 18 Reference $000s $000s New sales Realised fair-value movement (Note 7) 87,866 58,955 Sale of occupation rights (Key statistics) 290,701 307,282 Gross development margin 30% 19% Resales Realised fair-value movement (Note 7) 102,600 107,233 Resale of occupation rights
Slide 50: Appendix 5: Asset base
Appendix 5: Asset base New Zealand (ex Auckland) Village Location Hospital Dementia Resthome Serviced Independent Total Anthony Wilding Christchurch 80 33 35 50 110 308 Bob Owens Tauranga 40 40 40 79 218 417 Bob Scott Petone 40 40 34 89 254 457 Charles Fleming Waikanae 40 40 40 79 201 400 Charles Up
Slide 51: Appendix 5: Asset base
Appendix 5: Asset base Auckland Village Location Hospital Dementia Resthome Serviced Independent Total Bert Sutcliffe Birkenhead 40 40 40 81 225 426 Bruce McLaren Howick 41 40 42 74 192 389 Edmund Hillary Remuera 114 30 50 60 373 627 Evelyn Page Orewa 60 37 20 66 248 431 Grace Joel St Helliers 77 -
Slide 52: Appendix 6: Land bank (New Zealand)
Appendix 6: Land bank (New Zealand) Existing villages Location Hospital Dementia Resthome Serviced Independent Total Diana Isaac Christchurch - - - - 30 30 Grace Joel Auckland - - - - 96 96 Jean Sandel New Plymouth - - - - 59 59 Linda Jones Hamilton 40 40 40 93 226 439 Murray Halberg Auckland - - -
Slide 53: Appendix 6: Land bank (Victoria)
Appendix 6: Land bank (Victoria) Existing villages Location Hospital Dementia Resthome Serviced Independent Total Nellie Melba Melbourne 31 - 29 50 165 275 Total existing villages 31 - 29 50 165 275 New sites Location Hospital Dementia Resthome Serviced Independent Total Aberfeldie Melbourne 25 25 2
Slide 54: Appendix 7: Cash management fees
Appendix 7: Cash management fees Mar 19 Mar 18 Reference $000s $000s Accrued management fees – opening (Note 12) 321,631 270,370 Less: Accrued management fees – closing (Note 12) (376,161) (321,631) Movement in accrued management fees (54,530) (51,261) Plus: DMF income Income statement 78,944 70,087
Slide 55: Appendix 8: Investment property summary
Appendix 8: Investment property summary CBRE unit price inflation assumption Discount At 31 March 2019 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5+ rate Auckland 0.9% 1.8% 2.2% 2.7% 3.2% 12.5% Rest of New Zealand 0.8% 1.4% 1.9% 2.7% 3.2% 13.3% Victoria 0.7% 2.6% 3.6% 4.0% 3.9% 14.1% CBRE unit price inflation assumptio
Slide 56: Appendix 9: Operating cash flows
Appendix 9: Operating cash flows Mar 19 Mar 18 $000s $000s Resident receipts 302,046 268,359 Refundable accommodation deposits (net) 3,807 3,101 Development sales 300,351 238,820 Resales 403,292 364,860 Total receipts from residents 1,009,496 875,140 Interest received 588 515 Payments to suppliers a
Slide 57: Appendix 10: Available resale stock
Appendix 10: Available resale stock Mar 19 Mar 18 Independent living units 29 26 Serviced apartments 40 25 Total resales stock 69 51 Total retirement portfolio 6,878 6,414 Uncontracted stock percentage * 1.0% 0.8% 2.5% 2.0% 1.5% 1.4% 1.3% 1.4% 1.2% 1.2% 0.9% 1.0% 0.8% 0.8% 0.8% 1.0% 1.0% 0.5% 0.5% -
Slide 58: Appendix 11: Capital management
Use of debt $1,400m Appendix 11: $1,200m $98m $10m Capital management $49m $175m $34m $1,000m Systems / care investment Generators Gearing ($m) Mar 19 Mar 18 $800m Other village capex Net debt $1,324 $1,060 Net assets $2,170 $1,941 $600m $655m Village upgrades Gearing ratio * 38% 35% New sale debtor
Slide 59: Appendix 12: Resident average age and tenure (years)
Appendix 12: 88 Resident average age 87 and tenure (years) 86 85 Average age Mar 19 Mar 18 84 Independent 82.3 82.2 Serviced 87.5 87.6 83 Care centre 86.4 86.2 82 Average tenure - vacated units Mar 19 Mar 18 81 Independent 5.5 4.8 Serviced 2.6 3.0 80 Sep 13 Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Mar 13
Slide 60: Appendix 13: 16 villages in the pipeline
Appendix 13: 16 villages in Burwood East the pipeline Lincoln Road 8 in NZ, Highton Havelock North 8 in Victoria Coburg Aberfeldie Hobsonville Ocean Grove Riccarton Park Mt Martha Kohimarama Ringwood East Mt Eliza Park Terrace Karori Newtown 60
Slide 61: Appendix 14: Population growth 75+
Appendix 14: Population growth 75+ 1.6m 1.2m 0.8m 0.4m - 2008 2013 2018 2023 2028 2033 2038 2043 2048 2053 2058 NZ total population aged 75+ Victoria total population aged 75+ 61
Slide 62: Appendix 15: Ten sites in Victoria
Ryman village Aberfeldie Coburg Under construction Proposed village Ringwood East Burwood East Nellie Melba Weary Dunlop Highton Mount Eliza Mount Martha Ocean Grove Appendix 15: Ten sites in Victoria
Slide 63: Appendix 16: 12 sites in Auckland
Hobsonville Bert Sutcliffe William Sanders Lincoln Road Kohimarama Grace Joel Edmund Hillary Logan Campbell Evelyn Page Bruce McLaren Murray Halberg Ryman village Under construction Possum Bourne Proposed village Appendix 16: 12 sites in Auckland
Slide 64: Disclaimer
Disclaimer This presentation This presentation sets out information relating to Ryman Healthcare Limited’s full year result for the period to 31 March 2019. It should be read in conjunction with all other material which we have released, or may release, to NZX from time to time. That material is als