Sonic Healthcare Limited · ASX:SHL
Sonic Healthcare — FY2009 Earnings Presentation
25 slides from Sonic Healthcare's earnings presentation, Aug 28, 2009
Slide 1: Financial and Operational Review
Financial and Operational Review Year to 30 June 2009 Colin Goldschmidt CEO, Sonic Healthcare 28 August 2009
Slide 2: Forward-looking statements
Forward-looking statements This presentation may include forward-looking statements about our financial results, guidance and business prospects that may involve risks and uncertainties, many of which are outside the control of Sonic Healthcare. Readers are cautioned not to place undue reliance on f
Slide 3: Financial Highlights
Financial Highlights ` Revenue ↑ 27% ` EBITDA ↑ 21% ` Net profit ↑ 29% ` EPS ↑ 16% ` Cash generation ↑ 33%
Slide 4: Highlights
Highlights ` Sonic outperforms guidance ` “Revenue growth >15%” - actual 27% ` “EPS growth >10%” - actual 16% ` Strong organic growth in Australia, Germany, USA ` Australian pathology organic revenue growth 9% (market 4.8%) ` Margin expansion in Australia, Germany, USA ` Australian pathology deliver
Slide 5: FY 2010 Guidance
FY 2010 Guidance FY 2010 Guidance Net profit after tax (NPAT) growth 10 - 15% ` Based on FY 09 NPAT of A$315 million ` Incorporates loss of Auckland contract ` Variables: ` Foreign exchange rates (FY 09 rates assumed) ` Interest rates ` New acquisitions
Slide 6: Dividend
Dividend 2009 2008 Change Interim Dividend $0.22 $0.20 10.0% Final Dividend $0.35 $0.32 9.4% Full Year Dividends $0.57 $0.52 9.6% ` Dividend franked to 35% ` Record Date 14 September 2009 ` Payment Date 28 September 2009 ` Dividend Reinvestment Plan remains suspended
Slide 7: Financial Summary
Financial Summary A$ million FY 09 FY 08 Growth % Revenue 3,014 2,380 27% EBITDA 579 479 21% NPAT (before NRIs) 315 245 29% Non-recurring items after tax New Zealand pathology (136) Items expensed in H1 09 (8) NPAT statutory 171 EPS (diluted, before NRIs) 85.2¢ 73.5¢ 16% Cash from operations 442 332
Slide 8: Revenue
Revenue 2009 2008 Growth (A$M) (A$M) (%) Total Revenue 3,014 2,380 27% Organic revenue growth (excluding acquisitions) ` Australian pathology 9% Market growth 4.8% ` USA 5% Market growth ~4% ` Europe 6% Includes German fee cuts ` Australian radiology 3% Fees to increase from 1 Nov 09
Slide 9: Revenue Split
Revenue Split FY 2009 IPN Medical Centres Radiology $159 5% $345 12% Australian New Zealand Pathology Pathology $114 4% $881 29% Switzerland $74 3% UK $103 3% Germany $625 USA 21% $700 23% Revenue in A$ million
Slide 10: Sonic Revenue Growth
Sonic Revenue Growth 3,000 2,500 2,000 A$M 1,500 1,000 500 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1993 2009 Revenue (A$ million) 33 3,014
Slide 11: Sonic Global Pathology Earnings
Sonic Global Pathology Earnings EBITDA Contribution 550 500 43.7 Realised margin on organic revenue growth = 33% EBITDA 33.6 (marginal profit) 450 A$M 520.8 32.6 400 410.9 350
Slide 12: Synergies and Margin Expansion
Synergies and Margin Expansion Pathology ` A$44 million organic EBITDA added in FY 09 ` USA – margin expansion of >200 basis points (bps) ` Germany – margin expansion of >100 bps ` Despite fee cuts commencing 1 January 2009 ` Australian Pathology ` H2 09 margin expansion of 60 bps (vs H2 08) ` Full-
Slide 13: Sonic EPS Growth
Sonic EPS Growth 90 80 70 60 50 A$ cents 40 30 20 10 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1993 2009 EPS (A$ cents) 3.2 85.3
Slide 14: Australian Pathology
Australian Pathology ` Strong market share growth – clear market leader ` Revenue growth of 9% vs market growth of 4.8% ` H2 revenue growth >10% (vs H2 08) ` Sonic ~20% larger than nearest competitor ` Strong revenue growth continuing into FY 10 ` Margin turnaround in second half of year ` Fee refor
Slide 15: USA
USA ` Sustained strong performance from Sonic USA ` Organic revenue growth 5% vs market growth ~4% ` Margin expansion of >200 bps ` Synergies realised ` Group purchasing annual savings > US$3 million ` Inter‐company referrals increased by ~42% ` ACS integration into Sunrise, with closure of NJ lab `
Slide 16: Germany
Germany ` Financial performance ` Organic revenue growth of 5% ` Margin expansion of >100 bps ` Synergy gains achieved ` 70% of 2012 target for Bioscientia / Schottdorf (€10 million) ` 30% of 2011 target for Lab 28 / GLP (€5 million) ` Management ` Sonic Germany Executive Committee (GSEC) establishe
Slide 17: Switzerland
Switzerland ` Ongoing strong financial performance ` Integration of Krech acquisition complete ` Expected synergies realised ` New government fee schedule from 1 July 2009 ` Fee reductions for routine tests ` Fee increases for esoteric tests ` “Case Fee” per request increased ` Sonic’s case mix favo
Slide 18: UK
UK ` Strong revenue and earnings growth ` Organic revenue growth 15% ` Establishment of small operation in Manchester ` Outsourcing opportunities ` NHS contracts ` Independent sector contracts ` Positive outlook for ongoing growth
Slide 19: Radiology
Radiology ` Difficult conditions in FY 09 ` Australian Medicare fee increases ` Government acknowledgement of value of radiology ` Commencing 1 November 2009 ` Expecting improved performance through FY 10
Slide 20: Sonic Debt Summary
Sonic Debt Summary Investment Grade Credit Metrics 30 Jun 09 31 Dec 08 30 Jun 08 Net interest-bearing debt A$M 1,198 1,536 1,238 Gearing ratio % 32.1 36.5 38.0 Interest cover X 6.5 5.7 6.4 Debt cover X 2.2 2.3 2.5 ` Notes: ` Gearing ratio = Net debt / Net debt + equity (bank covenant limit <55%) ` I
Slide 21: Funding Available for Growth
Funding Available for Growth A$M Cash at 30 Jun 09 558 Operating cashflow Jul-Sept 09 est. 90 2009 final dividend (135) Approved new bank credit lines* 262 AVAILABLE HEADROOM 775 ` Expect April 2010 debt maturity (~A$405 million) to be refinanced with existing banks ` War-chest for suitable acquisit
Slide 22: Acquisition Strategy
Acquisition Strategy ` Significant headroom now established ` Focus on synergistic acquisitions ` Value-adding use of equity raised in November 2008 ` Growing pipeline of potential opportunities BERLIN Washington HAMBURG Maine Montana North Dakota Minnesota Oregon V NH Idaho Wisconsin Mass. South Da
Slide 23: Summary
Summary ` Sonic Healthcare in strong and secure position ` Revenue and market share growth in key markets ` Value-adding synergy capture in key markets ` Investment grade balance sheet ` Acquisition pipeline filling ` Stable culture and management
Slide 24: Sonic Healthcare – Key Attributes
Sonic Healthcare – Key Attributes ` GROWTH ` Strong revenue growth – CAGR 33% over 16 years ` 14 consecutive years of double-digit EPS growth ` Track record of acquisitions, integration, synergy ` Industry growth – new tests, ageing population, preventative medicine ` SECURITY ` Investment grade bal
Slide 25: Thank you.
SONIC HEALTHCARE Thank you. ag = Ss ae C2] SONIC HEALTHCARE