Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — FY2003 Earnings Presentation
23 slides from Ramsay Health Care's earnings presentation, Aug 28, 2003
Slide 1: Preliminary Final Results for the financial year ended 30 June 2003
Preliminary Final Results for the financial year ended 30 June 2003 Briefing – 28 August 2003
Slide 2: Chairman's Overview
Chairman’s Overview Net profit up 19%, building on record profit growth of previous 2 years Demand for Ramsay hospital beds strong, admissions higher on comparable basis Strong result underlines strength and importance of Ramsay’s relationships with doctors, medical staff and its strong portfo
Slide 3: Financial Highlights
Financial Highlights NPAT up 19% to $37.1 m Group Revenue up 20% to $662.2m Group EBIT up 14% to $66.4m EBIT excluding acquisitions up 11% EBIT margin of 10.4% (excluding new hospital acquisitions) EPS up 18% to 28.9 cents per share Total year dividend up 41% to 15.5 cents (fully frank
Slide 4: Financial Performance
Financial Performance Year Ended 30 June 2002 2003 % Inc. $m $m Operating Revenue 549.8 662.2 20% EBITDA 80.8 91.0 13% EBIT 58.4 66.4 14% Profit before tax 43.6 53.5 23% NPAT 31.1 37.1 19% EPS (cents/share) 24.5¢ 28.9¢ 18% Full year Dividend 11.0¢ 15.5¢ 41% (cents/share) (Unfranked) (Franked)
Slide 5: NPAT Growth
NPAT Growth $m 37.1 40 35 31.1 30 25 20 16.0 15 6.6 10 5 0 FY 2000 FY 2001 FY 2002 FY 2003 Strong NPAT growth, year on year
Slide 6: NPAT Growth - Half-yearly comparison
NPAT Growth Half-yearly comparison $m 18.5 $m 18.6 20 20 16.3 14.8 16 16 12 12 8 8 4 4 0 0 Dec'01 Dec'02 Jun'02 Jun'03 Second half exceeded expectations of matching first half, despite: ¾ Seasonal trends ¾ Higher than expected nursing wage increases in NSW ¾ Higher malpractice insurance costs now
Slide 7: Occupancy – Patient Days
Occupancy – Patient Days 440 380 Inpatient 320 Total (Inpatient & Day Patients) 260 200 Jun'00 Dec'00 Jun'01 Dec'01 Jun'02 Dec'02 Jun'03 Half-year Ended Occupancy levels for the second half maintained despite seasonality
Slide 8: Operating Cash Flow
Operating Cash Flow $m 95 80 65 EBITDA 50 Gross Cash Flow 35 20 5 FY 2000 FY 2001 FY 2002 FY 2003 Full year EBITDA of $91m has translated into strong gross operating cash flow of $84.5m
Slide 9: EBIT Growth
EBIT Growth $m 66.4 70 58.4 60 50 39.6 40 30.8 30 20 10 0 FY 2000 FY 2001 FY 2002 FY 2003 Group EBIT increased by 14% Excluding recent acquisitions, EBIT up 11%
Slide 10: Breakdown of Group EBIT Growth
Breakdown of Group EBIT Growth 3% 5% 6% Organic Growth Growth from Expanded Capacity Growth from Acquisitions
Slide 11: Expansion program delivers benefits
Expansion program delivers benefits Hollywood ¾ Hollywood expansion on-stream in 1st half ¾ Hollywood EBIT up 14% in full year, largely due to expansion benefits ¾ Return on investment of 16% already achieved in first year Greenslopes ¾ Largely completed late in FY 2003
Slide 12: EBIT Margin - (excluding acquisitions)
EBIT Margin - (excluding acquisitions) % 11.0 10.6 10.4 10.5 10.2 10.0 9.4 9.5 9.0 8.5 8.0 FY 2000 FY 2001 FY 2002 FY 2003 EBIT margin (ex Lake Macquarie and Cairns) 10.4% reflects: ¾ Absorption of higher than expected nursing wage increases in NSW ¾ Prothesis costs continue to dilute EBIT margi
Slide 13: Earnings per share
Earnings per share 28.9 30 24.5 25 Cents per Share 20 14.2 15 10 6.1 5 0 FY 2000 FY 2001 FY 2002 FY 2003 EPS up 18% in the year Return on investment 13.8% for FY03 Return on equity 14.6% for FY03
Slide 14: Operational Highlights
Operational Highlights Focus on cost containment resulted in 2nd half NPAT matching 1st half despite higher nursing wages and seasonal factors Premier position in market sees North Shore Private record strong double digit EBIT growth Westmead exceeding expectations, with EBIT growth above 50%
Slide 15: DVA Contract
DVA Contract RHC will continue to have a contract with DVA for services to veterans at Greenslopes and Hollywood post-2006 Facilitates the continuation of vital service to veterans Greenslopes and Hollywood will continue as major providers of hospital services to veterans in Perth and Brisbane
Slide 16: Outlook and Guidance
Outlook and Guidance Strategic position of RHC hospitals expected to keep demand strong against a slight industry softening Focus on cost containment and growing business Expansion program benefits continue to contribute to earnings - Greenslopes, Lake Macquarie Continue to pursue strategic
Slide 17: Acquisitions
Acquisitions Aged Care ¾ Discussions with Moran Health Care ongoing – complexities surround the property trust structure ¾ Continue to pursue other opportunities Hospitals ¾ Looking at selected Mayne hospitals
Slide 18: Appendix
Ba AS RAMSAY HEALTH CARE Appendix
Slide 19: Revenue Growth Time Line
Revenue Growth Time Line Perth Alpha Hosp Veteran Hosp RHC listed Group Privatisation on the ASX Acquired $m Feb’94 Sept’97 May’01 600 550 Brisbane Co-located 500 Veteran Hosp North Shore Privatisation Private Hosp 450 Jan’95 Opened Jul’98 400 350 300 250 200 150 100 50 0 1993 1994 1995 1996 1997 19
Slide 20: Financial Indicators
Financial Indicators Six months ended 31 Dec’01 30 Jun’02 31 Dec’02 30 Jun’03 (1) (1) ROIC (2) 14.4 14.9 14.3 14.3 (EBIT/Funds Employed) % ROE (2) 12.1 13.9 14.3 14.6 (NPAT/Shareholder Funds) % (1) Cairns excluded - acquired in Nov’02 (2) Calculated using rolling 12 months figures
Slide 21: Facility Portfolio
Facility Portfolio O p e r a tin g D iv is io n s N um ber L ic e n c e d of B eds F a c ilitie s V e te ra n 2 953 C o - lo c a te d 3 379 R e g io n a l M e d ic a l – S u r g ic a l 10 873 P s y c h ia tr ic 8 546 R e h a b ilita tio n 2 119 T o ta ls 25 2 ,8 7 0
Slide 22: Revenue Analysis
Revenue Analysis Revenue by Revenue by Operating Division Payor Source 3% 10% 6% 36% 7% 21% 34% 30% 53% Veteran Medical-Surgical Health Insurance Dept. Veteran Affairs Co-located Psychiatric Government Other Rehabilitation
Slide 23: Ramsay Health Care
Ba AS RAMSAY HEALTH CARE