Healius Limited · ASX:HLS
Healius — FY2019 Earnings Presentation
39 slides from Healius's earnings presentation, Aug 16, 2019
Slide 1: FY 2019 Results
FY 2019 Results Year ended 30 June 2019 16 August 2019
Slide 2: Our Group
Our Group tihealius
Slide 3: A comprehensive strategy
A comprehensive strategy Repositioning the Medical Centres via the Leapfrog program Leading-edge technology People: Attracting the right GPs through a multi-channel approach Laboratory Information System (LIS) program will revolutionise and strengthening nursing and front-line support staff proc
Slide 4: Key achievements with a strong run-rate into FY2020
Key achievements with a strong run-rate into FY2020 Group Pathology Increasingly positive momentum throughout the year Improved 2H returns (up 46% on 1H) Rolled out ‘Healius’ brand – supporting record GP recruitment FY19 productivity program targets achieved Organisational redesign commenc
Slide 5: Group Results
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Slide 6: Group results
Group results 1 2 Group Underlying Reported $m FY 2019 FY 2018 FY 2019 FY 2018 Revenue 1,804.5 1,704.6 1,810.3 1,704.6 EBIT 167.3 160.1 117.4 64.6 NPAT 93.2 87.5 55.9 4.1 • Group NPAT up 6.5% on revenue growth of 5.9% • EBIT up 4.5% with double-digit growth in Imaging and Medical Centres: o All thre
Slide 7: Strategic projects
Strategic projects FY 2019 Laboratory 1 Leapfrog iCAR Corporate $m Platforms Project management, design & planning 9.3 3.6 2.2 3.0 2 Project implementation & training 1.0 9.5 0.9 6.2 3 Total Opex (adjusted between reported and underlying) 10.3 13.1 3.1 9.2 Property, plant & equipment 1.1 18.5 0.0 0.
Slide 8: Free cash flow
Free cash flow 200 (30) 92 150 (38) $m 100 195 (52) 128 50 76 0 Gross OCF Interest Tax OCF Maintenance capex Free cash flow • OCF of $128m (FY 2018 $202m): o $22m back pay for the Medical Centres modern awards adjustment and Dorevitch pay determination. Both fully provided in FY18 o $16m increase in
Slide 9: Net debt and dividend
Net debt and dividend Reported As at $m 30 June 2019 30 June 2018 Bank and finance debt 797.9 860.8 Cash (119.7) (84.0) Net debt 678.2 776.8 Bank gearing ratio (covenant <3.5x)1 2.4x 2.7x Bank interest ratio (covenant >3.0x) 9.5x 9.0x Gearing (net debt: net debt + equity) 24.8% 29.9% • Significant i
Slide 10: Divisional Results and Strategies
Divisional Results and Strategies
Slide 11: Pathology - results
Pathology - results Underlying FY 2019 FY 2018 Better/ $m $m (worse) % Revenue 1,128.3 1,090.6 3.5 EBITDA 136.2 138.7 (1.8) Depreciation (19.8) (19.0) (4.2) Amortisation (5.3) (5.6) 5.4 EBIT 111.1 114.1 (2.6) Total capital expenditure 35.1 21.1 (66.4) • Revenue: o Annual revenue growth above market
Slide 12: Pathology - strategy
Pathology - strategy Cost control • Consolidation of esoteric testing and optimisation of regional lab network • Focus on returns metrics within collection centre footprint • Current organisational re-design initiatives identifying further efficiencies Investment • Upgraded Serum Work Area (main lab
Slide 13: Medical Centres - results
Medical Centres - results Underlying FY 2019 FY 2018 Better/ $m $m (worse) % 1 Revenue 327.4 289.7 13.0 1 EBITDA 61.4 53.7 14.3 Depreciation (20.4) (18.0) (13.3) Amortisation (3.4) (4.1) 17.1 EBIT 37.6 31.6 19.0 HCP capital expenditure 28.9 26.8 (7.8) 2 Total capital expenditure 96.6 67.4 (43.3) Two
Slide 14: Medical Centres – GP results
95 sites nation-wide Medical Centres – GP results 73 Healius Medical Centres 61 with Dental sites 4 with IVF clinics Healius Medical Centres GPs1 13 Health & Co • Record GP cohort of 1,164 (992 FTEs2) 14 Day Hospitals (9 stand-alone) • Recruitment: 259 GPs (211 BaU, 39 M&A, 9 Registrars). 63% up on
Slide 15: Medical Centres - progress on Leapfrog strategy
Medical Centres - progress on Leapfrog strategy People +103 • Strong FY2020 pipeline including BaU and M&A roll-ins. ~70 FTEs with contracts signed or terms approved • Property transformations to further assist • Introducing greater autonomy/skills at centres under new operating model Process • Roll
Slide 16: Emerging businesses - Dental and IVF
Emerging businesses - Dental and IVF Dental • Dental in 61 Medical Centres with 164 Dentists, 133 FTEs • Revenue up 4.8% to $35.2m. EBIT at $5.7m • Centres with new dental facilities under Leapfrog delivering strong revenue growth • Trialling innovative fixed-price general dentistry offering under S
Slide 17: Emerging businesses - Day Hospitals
Emerging businesses - Day Hospitals Montserrat: acquired October 2018 Day hospital business well positioned for future growth • Building diversified platform for future growth and further investment – Shift to day procedures in US where ASCs1 grown • 3 centres opened including flagship Westside Pr
Slide 18: Imaging - results
Imaging - results Underlying FY 2019 FY 2018 Better/ $m $m (worse) % 1 Revenue 391.3 362.6 7.9 1 EBITDA 54.1 51.2 5.7 Depreciation (13.4) (14.0) 4.3 Amortisation (2.0) (3.4) 41.2 EBIT 38.7 33.8 14.5 HCP capital expenditure 0.9 2.8 67.9 Total capital expenditure 22.3 36.9 39.6 • Revenue up 7.9% suppo
Slide 19: Imaging - strategy
Imaging - strategy Growth • Growing market share with new and expanded sites, contract wins, M&A • Contract wins: o NBH (commenced October 2018) o ADF Health Services in partnership with BUPA (commenced July 2019) • Focus on high-end modalities. 3 new MRI licences Investment • Investment in high-end
Slide 20: Corporate and wrap-up
Corporate and wrap‐up Corporate • $(20.1)m (FY18 $(19.4)m) with increased IT costs and insurance premiums • Organisational re-design to drive a more efficient group function FY 2020 • Underlying NPAT for FY 2020 expected to be higher than FY 2019 • Long-term market growth is supported by: o trends i
Slide 21: Appendices: About Healius
CL? swift Immediate Care F skin’ cancer & health C1 swiftQ Dental Care customising workforce wellness Appendices About Healius tihealius
Slide 22: A market leading network
A market leading network 18 Total Sites Australia-wide 678 Total Sites coverage 18 2,558 Total sites 213 Total Sites 625 19 34 2,318 2,216 ACCs 61 Total Sitesv 102 Laboratories 197 12 4 Pathology 840 Total Sites 49 7 5 ACT 73 Healius Medical Centres 38 Total Sites 95 61 with Dental sites 741 36 63 4
Slide 23: Pathology
Pathology No. 1 or 2 in each state • Our largest division • National pathology provider • Market leader: QLD, VIC & WA • $1bn+ in revenue p/a • Approximate employees: o 280 specialist pathologists o 2,300 lab team of scientists and assistants o 3,800 collectors o 800 couriers o 900 support staff 23
Slide 24: Medical Centres
Medical Centres Unrivalled footprint of large scale medical centres and patient flow opportunities Healius Medical Centres • Multidisciplinary teams of GPs, allied health practitioners and specialists • Open 365 days/year, often 7am to 10pm • Affordable with most services bulk-billed • $300m+ in rev
Slide 25: Diagnostic Imaging
Diagnostic Imaging No. 3 national imaging provider • Network of 145 imaging sites: o 29 hospitals o 61 community centres o 55 medical centres • $390m+ in revenue p.a. • 3 million examinations annually • Full suite of modalities including X-ray, MRI, PET, CT and ultrasound • 112 Radiologists • Approx
Slide 26: Comprehensive strategy
Comprehensive strategy PEOPLE PROCESS PROPERTY Workplace of choice Organisational efficiency Yield optimisation Group Purpose, Mission and Values Modernisation of corporate support services Outsourced facilities management / leasing Performance management framework infrastructure Property
Slide 27: Industry trends
Industry trends Lower 5-year growth rates from subdued FY19 volumes 27 FY 2019 Results
Slide 28: Appendices: Reconciliations
Appendices Reconciliations
Slide 29: Divisional reconciliation
Divisional reconciliation Underlying EBIT FY 2019 1 2 Pathology Medical Centres Imaging Corporate Group $m Revenue 1,128.3 327.4 391.3 0.3 1,804.5 EBITDA 136.2 61.4 54.1 (15.7) 236.0 Depreciation (19.8) (20.4) (13.4) (3.1) (56.7) Amortisation (5.3) (3.4) (2.0) (1.3) (12.0) EBIT 111.1 37.6 38.7 (20.1
Slide 30: Underlying v reported reconciliation
Underlying v reported reconciliation FY 2019 Restructuring/strategic Impairment $m Reported initiatives and other Underlying EBIT 117.4 49.9 0.0 167.3 Finance costs (34.2) (34.2) PBT 83.2 133.1 Income Tax (27.3) (39.9) NPAT 55.9 93.2 FY 2018 Restructuring/strategic Impairment $m Reported initiatives
Slide 31: EBIT BAU reconciliation
EBIT BAU reconciliation Business as usual analysis FY 2019 FY 2018 Better/ $m $m (worse) % Underlying EBIT 167.3 160.1 4.5 Medical Centres - new centres 10.7 13.0 Imaging - new centres 1.8 1.8 EBIT Business as Usual 179.8 174.9 2.8 FY 2019 openings FY 2018 openings FY 2017 openings Monserrat Day Hos
Slide 32: Accounting change AASB 15
Accounting change AASB 15 • Healius has adopted AASB 15 effective from 1 July 2018 • AASB 15 establishes a single model for entities to use in accounting for revenue from contracts with customers • Under AASB 15 consideration payable to a customer is accounted for as a reduction to the transaction p
Slide 33: Accounting change AASB 16
Accounting change AASB 16 • AASB 16 will remove the distinction between operating and finance leases • On Balance Sheet, almost all leases (except for short-term leases / leases of low value assets) will be recognised as an asset and a liability • On the P&L, current operating leases will have inter
Slide 34: Appendices: Medical Centres
Appendices Medical Centres Additional Information
Slide 35: Healius Medical Centres GPs - Recruitment
Healius Medical Centres GPs - Recruitment 160 30 110 25 GP capex ($m) 60 20 # of GPs 10 15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 (40) 10 (90) 5 Joiners (LHS axis) Leavers (LHS axis) HLS initiatives After-tax capex (RHS axis) 35 FY 2019 Results
Slide 36: Healius Medical Centres GPs - Key Drivers
Healius Medical Centres GPs - Key Drivers 1 1 GPs FY 2019 FY 2018 FY 2017 Better/(worse) % FY19-FY18 Headcount 1,164 1,061 1,045 9.7 2 FTEs 992 950 964 4.4 Gross billings ($m) 430.2 430.0 419.9 0.0 3 Share of revenue (%) 32.2% 33.2% 33.9% (100) pp 3 Revenue ($m) 138.3 142.9 142.3 (3.2) 4 GP capital
Slide 37: Healius Medical Centres - Tax implications of HCP acquisitions
Healius Medical Centres - Tax implications of HCP acquisitions Healthcare Professionals contracted on or after 1 July 2015 • Deferred tax liability (DTL) to be recognised at the time of the acquisition of healthcare practices and capitalisation of contractual relationship intangible assets. • Equal
Slide 38: Disclaimer
Disclaimer This presentation has been prepared by Healius Limited (ACN 064 530 516) (‘HLS’). Material in this presentation provides general background information about HLS which is current as at the date this presentation is made. Information in this presentation remains subject to change without n
Slide 39: tihealius
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