Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — FY2008 Earnings Presentation
23 slides from Ramsay Health Care's earnings presentation, Aug 25, 2008
Slide 1: Financial Results FY 2008
For personal use only Briefing – 25 August 2008 Financial Results FY 2008
Slide 2: Agenda
For personal use only AGENDA • Full-Year Overview • Financial Performance - Group & Australia/Indonesia • Operational Highlights – Australia/Indonesia & UK • Strong Industry Fundamentals – Global • Strong Industry Fundamentals – Australia • Proposed Changes To MLS • Brownfields Progress Australia/In
Slide 3: Full-Year Overview
For personal use only FULL-YEAR OVERVIEW • Strong rise in Group core net profit, underpinned by solid organic Australian growth ¾ Core EPS growth of 11.8%, at higher end of guidance ¾ Australian business achieved strong EBIT growth across all states ¾ Australian brownfields progressing well ¾ Ramsay
Slide 4: Group Financial Performance
For personal use only GROUP FINANCIAL PERFORMANCE YEAR ENDED 30 JUNE 2008 2007 % Inc $m $m Continuing Operations Australia & UK Group Group Indonesia Operating Revenue 2,289.2 384.5 2,673.7 2,099.1 27.4% EBITDAR* 327.1 87.5 414.6 294.1 40.9% EBITDA 303.4 37.8 341.3 272.1 25.4% EBIT 234.7 19.9 254.7
Slide 5: Group Financial Performance (cont)
GROUP FINANCIAL PERFORMANCE For personal use only (cont) YEAR ENDED 30 JUNE 2008 2007 % Inc/(Dec) $m $m Core NPAT – continuing operations 123.1 110.4 11.5% NPAT – divested operations (2.7) 0.3 Specific items and amortisation of intangibles (net of tax) (28.2) (3.6) Reported Net Profit after Tax 92.2
Slide 6: Financial Performance Australia & Indonesia
FINANCIAL PERFORMANCE For personal use only AUSTRALIA & INDONESIA YEAR ENDED 30 JUNE 2008 2007 % Inc Continuing Operations $m $m Operating Revenue 2,289.2 2,099.0 9.1% EBITDAR 327.1 294.1 11.2% EBITDA 303.4 272.1 11.5% EBIT 234.7 211.5 11.0% EBITDAR MARGIN (%) 14.3% 14.0% EBITDA MARGIN (%) 13.3% 13.
Slide 7: Group EBITDAR Growth
GROUP EBITDAR GROWTH For personal use only CONTINUING OPERATIONS $m 450 400 87.5 350 300 327.1 294.1 250 272.1 200 150 160.0 100 50 2005 2006 2007 2008 Australia & Indonesia UK • Group EBITDAR up 40.9% for the year • Group EBITDAR margin up to 15.5% from 14.0% • Australia & Indonesia EBITDAR up 11.2
Slide 8: Group Core NPAT and EPS Growth
GROUP CORE NPAT AND EPS GROWTH For personal use only CONTINUING OPERATIONS • Group core NPAT up 11.5% • Ramsay UK exceeded expectations • Group core EPS up 11.8% • Group core EPS in line with guidance of low double-digit growth (10%-12%) 8
Slide 9: Full-Year Dividend
For personal use only FULL-YEAR DIVIDEND • Full-year dividend up 12.1% and in line with core EPS growth 9
Slide 10: Committed Debt Funding / Effective Balance Sheet Management
COMMITTED DEBT FUNDING / EFFECTIVE For personal use only BALANCE SHEET MANAGEMENT • Senior debt facilities were refinanced in November 2007 ¾ Committed debt funding until November 2012 ¾ Headroom provided for further growth opportunities • Strong consistent cash flow underwrites debt servicing • Ver
Slide 11: High Cash Conversion
For personal use only HIGH CASH CONVERSION FY 08 • High cash conversion rate from Australian & Indonesian hospitals ¾ Full-year cash flow virtually in line with EBITDA through focus on working capital management • Shortfall of gross operating cash flow to EBITDA in relation to UK operations ¾ Rent p
Slide 12: Diversified Revenue
For personal use only DIVERSIFIED REVENUE 12
Slide 13: Operational Highlights Australia & Indonesia
OPERATIONAL HIGHLIGHTS For personal use only AUSTRALIA & INDONESIA • Strong organic growth – all states ahead of prior year • Hospital margins maintained • Australian admissions continue to increase • Health fund contracts renewed with appropriate price increases • Developing relationships with new
Slide 14: Operational Highlights UK
For personal use only OPERATIONAL HIGHLIGHTS UK • Integration proceeding well • Hospital admissions up 23% on prior year • Growth largely due to NHS – up 237% • NHS work continuing to grow in private hospitals – now 30%+ of activity • Independent Sector Treatment Centre (ISTC) admissions up 8% on pr
Slide 15: Strong Industry Fundamentals - Global
STRONG INDUSTRY For personal use only FUNDAMENTALS - GLOBAL • Growth in demand for health care to continue over the long term supported by: ¾ Ageing population ¾ “Baby boomer” bulge ¾ Wealth demographic ¾ Increased expectations INCREASING DEMAND FOR ¾ Increased capabilities HEALTH CARE PROVISION − S
Slide 16: Strong Industry Fundamentals - Australia
STRONG INDUSTRY For personal use only FUNDAMENTALS – AUSTRALIA • Balanced health care system ¾ Cultural ¾ Political ¾ Financial • Industry features ¾ Respected private providers ¾ Choice and access ¾ Low cost attractive insurance product UNDERPINS ONGOING STRONG ¾ Comprehensive cover PARTICIPATION I
Slide 17: Proposed Changes to MLS
For personal use only PROPOSED CHANGES TO MLS • Proposed changes to the Medicare Levy Surcharge (MLS) will not significantly change the attractive fundamentals of Private Health Insurance (PHI) • Little or no effect on patient volumes anticipated • Relatively modest effect on PHI premiums • Ramsay w
Slide 18: Brownfields Progress Australia & Indonesia
BROWNFIELDS PROGRESS For personal use only AUSTRALIA & INDONESIA • Ramsay has committed and approved $550M for improvements and capacity expansion, approx. 35% already spent ¾ Construction has begun and progressing well at: Hollywood (Perth), Joondalup (Perth), Greenslopes (Brisbane), North West (Br
Slide 19: Exciting UK Market Dynamics
For personal use only EXCITING UK MARKET DYNAMICS • “Revolution” in publicly funded health care • Access to private hospital market expanded from 12%-15% of English population to 100% • Patient Choice soon to be a legal right • Further clinical specialties to come on line through Patient Choice • St
Slide 20: Strong Growth Strategy - Ramsay UK
STRONG GROWTH STRATEGY - For personal use only RAMSAY UK • Focused on developing UK operation • Substantial growth opportunities from NHS, supporting increased investment ¾ Approved capex of £28 million over FY09 & FY10 • Bolt-on opportunities will continue to be investigated to enhance value of UK
Slide 21: Capacity Expansion UK
For personal use only CAPACITY EXPANSION UK • Significant investment in capacity expansion at hospitals to service increasing NHS demand ¾ 17% increase in hospital operating capacity expansion approved – further expansion expected ¾ Capex of £28 million approved over FY09 and FY10 ¾ Target ROI of at
Slide 22: Outlook
For personal use only OUTLOOK • Strong industry fundamentals to underpin future growth • Solid organic growth to continue in Australia, brownfields progressing well • Ramsay UK outperformed expectations in FY08 and is expected to be EPS accretive in FY09 – one year ahead of schedule • Significant fu
Slide 23: Questions
For personal use only QUESTIONS