Oceania Healthcare Ltd. · NZX:OCA
Oceania Healthcare — Debt Investor Presentation (September 2020)
32 slides from Oceania Healthcare's debt investor presentation, Sep 25, 2020
Slide 1: Retail Bond Presentation
Retail Bond Presentation 25 September 2020 Meadowbank Stage 5 (completed in May 2020) 0
Slide 2: Disclaimer
Disclaimer Please read carefully before the rest of this presentation This presentation has been prepared by Oceania Healthcare Limited (“Oceania” or the “Issuer”) in Nothing in this presentation is to be construed as authorising its distribution, or the offer or sale of the relation to the offer of
Slide 3: Contents
Contents 01 Offer Highlights 3 02 Business Overview and Strategy 4 03 Financial Highlights 12 04 Funding and Security Structure 15 05 Offer Terms and Timetable 21 06 Appendices 25 Presented by: Earl Gasparich, Chief Executive Officer Brent Pattison, Chief Financial Officer 2
Slide 4: Offer highlights
01 Offer highlights Retail Bond Offer Details Issuer Oceania Healthcare Limited (Oceania) Bonds Secured unsubordinated fixed rate bonds Payments on the Bonds are guaranteed by Oceania, Oceania Village Company Limited, Oceania Care Company Limited and Guarantee Oceania Group (NZ) Limited under a guar
Slide 5: Business Overview and Strategy
Business Overview and Strategy 4 4
Slide 6: Oceania at a glance
02 Oceania at a glance Oceania was formed in 2005 and is a “care focused” operator and developer of aged care homes and retirement villages. Oceania is an experienced developer of new aged care and retirement village facilities. The existing portfolio includes a substantial brownfield development pi
Slide 7: Oceania market position & strategy: Aged care and retirement village
02 Oceania market position & strategy 1 2 Operating Segment AGED CARE RETIREMENT VILLAGE Operations Provision of residential aged care services in standard beds, premium Manage portfolio of independent living Core operations rooms and care suites. accommodation for over 70 year olds. Portfolio size1
Slide 8: Oceania market position & strategy: Development
02 Oceania market position & strategy 3 Operating Segment DEVELOPMENT Operations Design and construct integrated retirement village and aged care centres • Project manage the design, consent, financing, and construction of new Care Suites and Units. Core operations • Oceania has proven brownfield de
Slide 9: Oceania market position & strategy
02 Oceania market position & strategy We are a “care focused” operator and developer of aged care centres and retirement villages. Current & future portfolio composition 1 Care Beds Care Suites Units Total North Island 1,442 494 974 2,910 South Island 440 185 311 936 Total Existing1 1,882 679 1,285
Slide 10: Portfolio: Transformations delivered
02 Portfolio From IPO in 2017 to 31 May 2020 we delivered 579 new units and care suites, including opening four new premium care facilities at Meadowbank, The Sands, The BayView and Awatere. Transformations delivered – Fulfilling our promise since IPO Meadowbank - Then Maureen Plowman - Then Meadowb
Slide 11: Portfolio: Transformations delivered
02 Portfolio Opening the new care facilities at The BayView and Awatere has unlocked under-utilised land at these sites for subsequent stages of premium independent living apartments to achieve site optimisation. Transformations delivered – Fulfilling our promise since IPO Melrose - Then Trevellyn -
Slide 12: Becoming more sustainable
02 Becoming more sustainable Oceania is committed to enhancing value for all of our stakeholders in a sustainable manner. ● The diagram opposite outlines Oceania’s sustainability framework, aimed at ensuring prosperity is achieved though sustainable practices ● We care about the health and wellbeing
Slide 13: Financial Highlights
Financial Highlights 12
Slide 14: Financial highlights
03 Financial highlights Underlying earnings, operating cash flow and total assets have increased significantly since FY2017. Underlying EBITDA from continuing operations1 Underlying NPAT from continuing operations1 NZDm NZDm 61.9 63.8 63.5 50.8 50.7 42.9 42.7 32.2 FY2017 FY2018 FY2019 FY2020 FY2017
Slide 15: FY2020 highlights
03 FY2020 highlights Our care and village business held up well in the face of COVID-19 and we remain committed to our strategy. Continued commitment to our Aged Care strategy ● 50% of our care portfolio is now premium beds or care suites (34% at IPO) as we progress to our target mix of 70%/30% prem
Slide 16: Funding and Security Structure
Funding and Security Structure 15
Slide 17: Purpose of debt
04 Purpose of debt Debt is primarily used to acquire and develop Oceania’s sites across New Zealand. The debt is then repaid using proceeds from the first time sale of newly developed units and care suites. ● Oceania uses debt to fund the: Capital Structure ▬ Redevelopment of existing brownfield sit
Slide 18: Development cash flows
04 Development cash flows Developments are typically staged to ensure the most efficient recycling of capital given target gearing levels and local market demand. ● Oceania is predominantly a brownfields developer. In general, the brownfields Net debt to development assets development process is sta
Slide 19: The issuer and guaranteeing group
04 The issuer and guaranteeing group Listed entity Oceania Healthcare Limited is the issuer and the guaranteeing group includes entities owning and operating the care centres and retirement villages in the Group. ● Oceania Healthcare Limited as Issuer is responsible for Security structure as at 31 M
Slide 20: Security
04 Security The Bonds share the Security provided by Oceania and the Guarantors on an equal ranking basis with Oceania’s bank lenders as provided by the Security Trust Deed. ● Total assets as at 31 May 2020 of $1.5b, including investment property and Financial Position as at 31 May 2020 (NZDm)3 prop
Slide 21: Covenants
04 Covenants Oceania maintains a conservative approach with significant headroom on the Loan-to-Valuation (LVR) covenant ● Key terms of the bond LVR include: Loan to valuation (LVR) ratio 50% ▬ LVR must not exceed 50%; ▬ If there is a breach of the LVR then: 40% Oceania must, within 6 months of the
Slide 22: Offer Terms & Timetable
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Slide 23: Key terms of the Offer
05 Key terms of the Offer Retail Bond Offer Details Issuer Oceania Healthcare Limited Description of the Bonds Secured unsubordinated fixed rate bonds Payments on the Bonds are guaranteed by Oceania, Oceania Village Company Limited, Oceania Care Company Limited and Guarantee Oceania Group (NZ) Limit
Slide 24: Key terms of the Offer (continued)
05 Key terms of the Offer (continued) Retail Bond Offer Details Oceania agrees to ensure that, on each Semi-annual Test Date1, the total principal amount of financial indebtedness secured Financial covenant (Loan to Valuation ratio) under the Global Security Deed is not more than 50% of the valuatio
Slide 25: Key dates of the Offer
05 Key dates of the Offer Event Date PDS lodgement Friday, 25 September 2020 Opening date Monday, 5 October 2020 Closing date Friday, 9 October 2020 at 12.00pm Rate set date Friday, 9 October 2020 Issue date and allotment date Monday, 19 October 2020 Expected date of initial quotation Tuesday, 20 Oc
Slide 26: Appendices
Appendices 01 Portfolio summary 02 COVID-19 impact and response 03 Embedded Value 04 Directors 05 Executive Management Team 06 Glossary 25
Slide 27: Portfolio summary (31 May 2020)
01 Portfolio summary (31 May 2020) Care Village Care Village Facility Region Beds Care Suites Units Total Facility Region Care Beds Suites Units Total NORTH ISLAND SOUTH ISLAND Totara Park Rodney - - 30 30 Marina Cove Picton - - 22 22 The Sands North Shore - 44 64 108 Green Gables Nelson - - 12 12 G
Slide 28: COVID-19 impact and response
02 COVID-19 impact and response Essential service provider status and defensive care earnings stream ensured Oceania was well positioned through COVID-19 uncertainty Impact Response Aged care ● Operations responsible for the care of over 3,600 residents, a ● Oceania has not recorded any COVID-19 cas
Slide 29: Embedded value
03 Embedded value The embedded value in our portfolio has increased 4.3% from FY2019 to $216.8m as at FY2020 and will underpin the future realisation of cashflows from deferred management fees and resale gains. Embedded Value NZDm ⚫ Embedded value in Oceania’s portfolio is $216.8m, up 4.3% on FY2019
Slide 30: Directors
04 Directors Elizabeth Coutts Alan Isaac Dame Kerry Prendergast Sally Evans Patrick McCawe Gregory Tomlinson Chair and Independent Independent Director Independent Director Independent Director Independent Director Independent Director Director CNZM, BCA, FCA DNZM, CNZM, MBA (VUW), BHSc, MSc, FAICD,
Slide 31: Executive Management Team
05 Executive Management Team Earl Gasparich Brent Pattison Jill Birch Dr Frances Hughes Mark Stockton Anna Thorburn Chief Executive Officer Chief Financial Officer General Manager General Manager Nursing General Manager Property General Counsel & BCom, LLB (Hons), FCA BBS, CA (Chartered Operations &
Slide 32: Glossary
06 Glossary Capitalised terms used and not defined in this presentation have the meaning given in the PDS. Bonds IP0 Offer of bonds described in this presentation Initial Public Offering (of shares in Oceania) on 5 May 2017 Brownfield Development Issuer Development of integrated aged care and retire
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