Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — FY2019 Earnings Presentation
30 slides from Ramsay Health Care's earnings presentation, Aug 29, 2019
Slide 1: Results Briefing - Year ended 30 June 2019
Ramsay Health Care Limited Results Briefing Year ended 30 June 2019 Craig McNally, Managing Director & Bruce Soden, Group Finance Director 29 August 2019 ramsayhealth.com
Slide 2: Agenda
Agenda Group Performance Overview Segment Performance Growth Strategy Update Outlook 2 Results Briefing - Year ended 30 June 2019
Slide 3: Group Performance Overview
Group Performance Overview
Slide 4: Group Highlights FY'19
Group Highlights FY’19 Performance: • 2.1% increase in Core EPS, 2.0% increase in Core NPAT • Group revenue up 24.4% • Australia delivered solid earnings growth • Ramsay Générale de Santé (ex Capio) delivered in line with expectations • Ramsay UK delivered solid EBIT & revenue growth in 2H following
Slide 5: Ramsay's Operations Today
RAMSAY’S OPERATIONS TODAY Global Health Differentiated 77,000 Operator Business Employees Economies of scale Scale Best practice Cost leadership Diversified portfolio c500 Speed to market Industry leading Locations Innovation quality 8,500,000 Market Leading Deep and Patient visits/admissions experi
Slide 6: Group Performance FY'19
Group Performance FY’19 Ramsay Health Care Limited FY’19 performance: 2019 (1) 2018 Year ended 30 June Increase $m $m • Core Net Profit After Tax of $590.9 million, up 2.0% Revenue 11.415.2 9,176.2 24.4% - Excluding Capio acquisition, Core NPAT up 2.5% EBITDAR 2,161.0 1,839.9 17.5% to $593.9 million
Slide 7: Group Performance FY'19 (Pre and Post Capio)
Group Performance FY’19 (Pre and Post Capio) (Including Capio) (Excluding Capio) 2019 2018 2019 Year ended 30 June Increase Increase $m $m $m Total Revenue – ex AASB16 adjustment 11,415.2 9,176.2 24.4% 9,659.5 5.3% EBITDAR 2,161.0 1,839.9 17.5% 1,941.6 5.5% EBITDA 1,592.1 1,395.9 14.1% 1,487.9 6.5%
Slide 8: Reconciliation to Statutory Reported Net Profit
Reconciliation to Statutory Reported Net Profit 2019 2018 Increase/ Year Ended 30 June $m $m (Decrease) Core NPAT 590.9 579.3 2.0% Net non-core items (net of minorities and net of tax) (1) (45.5) (191.0) Statutory Reported Net Profit after tax attributable to members of the Parent 545.4 388.3 40.5%
Slide 9: Dividend Growth
Dividend Growth Total Dividend • Final dividend fully franked up 5.8% on previous 151.5 corresponding period 144.2 Total dividend 134.5 (cents per share) 119.0 • Dividends for the full year up 5.2%, higher than the growth in Core EPS of 2.1% Final dividend • Full year dividend payout ratio of 53% of
Slide 10: Leverage and Cash Management
Leverage and Cash Management Consolidated Balance Sheet • Balance sheet has financial flexibility to Leverage Ratio continue to fund: 6x − the pipeline of brownfield capacity expansion Capio UK RGdS 5x Acquisition Acquisition − future acquisitions Ramsay Santé Acquisition Générale de Santé of Capio
Slide 11: Adoption of AASB16 Lease Standard in FY'20 - Overview
Adoption of AASB16 Lease Standard in FY’20 – Overview Ramsay will apply the modified retrospective Implementation of AASB16 Significant non-cash impact on method of adoption Lease Accounting Standard the Consolidated Income will have no impact on: Statement and Consolidated • Net cash flow Statement
Slide 12: Adoption of AASB16 Leases in FY'20 - Impact on Income Statement
Adoption of AASB16 Leases in FY’20 - Impact on Income Statement Core NPAT will decrease under AASB16 relative to what it would have been under the old lease standard • Rental expense from leases replaced by an interest expense and a straight-lined depreciation expense Illustrative Changes in Costs i
Slide 13: AASB16 - Impact on Balance Sheet and Reported Cash Flows
Adoption of AASB16 Lease Standard in FY’20 – Impact on Balance Sheet and Reported Cash Flows Balance Sheet Impact: • Under the new leasing standard both an asset and liability are brought on to the Balance Sheet - Lease asset: Right-of-Use (ROU) of underlying leased assets - Lease liability: Present
Slide 14: Segment Summary
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Slide 15: Australia Performance FY'19
Australia Australian operations delivered solid earnings growth. Admissions growth remains above industry growth rates demonstrating our market leadership with high quality, strategically located hospitals and the success of our investment strategy • Delivered 6% overall EBITDA growth Performance FY
Slide 16: Continental Europe Performance FY'19
Continental Europe Acquisition of Capio completed during the period and we are in the advanced stages of integration • Ramsay GdS (ex Capio) delivered full year result in line with expectations – Performance FY’19 revenue up 2.6% and EBITDAR up 1.8% • Tariff increase in France took effect from 1 Mar
Slide 17: United Kingdom Performance FY'19
United Kingdom Return to NHS volume growth in 2H, tariff increase effective April 2019 Performance FY’19 • Performance strengthened after poor start to the year • Strong revenue, EBITDAR and EBIT growth in 2H 4.7% • Return to volume growth for NHS work - increasing 7.4% on prior year • Tariff increa
Slide 18: Asia Performance FY'19
Asia Strong operating performance for the year Performance FY’19 • Strong operating performance in both Malaysia & Indonesia • 10% growth in admissions 15.5% • Cost controls a key focus area 19.4 • New developments targeting universal healthcare patients (BPJS) opened at 16.8 two of our Indonesian f
Slide 19: Strategy Update
Strategy Update
Slide 20: Group Strategy
Group Strategy Continuing to create shareholder value through our focused strategy Growth Efficiency Sustainability Driving stronger growth Developing new Strengthening Building a more from the core growth platforms the core sustainable organisation Organic Growth Acquisitions Operational Excellence
Slide 21: FY'19 Completed Brownfield Projects
FY’19 Completed Brownfield Projects During FY’19 the following projects were completed and opened: Major Completed Projects St Andrews $242.0m gross 30 consulting • New ED, net 81 beds, 2 operating theatres capital suites Warners Bay • Net 31 beds, MHU, single room strategy investment Greenslopes Pr
Slide 22: Brownfields Forecast for Completion in FY'20
Brownfields Forecast for Completion in FY’20 Most benefits expected from FY’21 onwards $169.7m gross 85 consulting capital suites investment 254 Gross beds 3 operating 157 Conversions theatres 97 Net beds Peninsula Private Hospital, Victoria 22 Results Briefing - Year ended 30 June 2019
Slide 23: FY'19 Approved Projects
FY’19 Approved Projects During FY’19 the following projects were approved & have not been completed: Historical Value of Approved Projects 350 $1.94bn total investment $244.0m gross 51 consulting 300 approvals over 10 years capital suites Value of Project Approvals ($m) investment 250 200 150 100 30
Slide 24: Greenslopes Private Hospital
Major Capital Investment – FY’20 Approval Greenslopes Private Hospital Surgical, Medical & Emergency Centre Expansion Opening in FY’22 $72.34m 66 beds 3 theatres 13 ED Investment 3 procedure Bays 64 beds rooms 2 ICU beds (expanded ED) 24 Results Briefing - Year ended 30 June 2019
Slide 25: Hollywood Private Hospital
Major Capital Investment – FY20 Approval Hollywood Private Hospital New Emergency Department & Beds $67.7m New ED 90 Beds Investment Opening FY’22 Staged opening from FY’22 25 Results Briefing - Year ended 30 June 2019
Slide 26: Capio Acquisition
Capio Acquisition Acquisition completed November 2018. Compulsory acquisition of minority shares completed May FY’19 • Good underlying growth fundamentals and strategic fit – quality provider and a leader in driving value-based healthcare, digitalisation and specialisation • In advanced stages of in
Slide 27: Capio covers many segments of healthcare
Capio covers many segments of healthcare The acquisition of Capio allows us to accelerate our strategic transformation from being a leading private hospital operator in France to being a leading provider of integrated care in Continental Europe. Proximity Care Specialist Clinics Hospitals Elderly Pr
Slide 28: Outlook
Outlook
Slide 29: Outlook
Outlook • FY’19 consolidated Ramsay’s position as a leading international healthcare service provider with a diversified business portfolio • Scale and size provides opportunity to drive greater efficiencies and establish stronger global partnerships • Industry fundamentals are continuing to drive i
Slide 30: Questions
Questions