Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — H1 2024 Earnings Presentation
34 slides from Ramsay Health Care's earnings presentation, Feb 29, 2024
Slide 1: 1HFY24 Result Presentation
1HFY24 Result Presentation 6 months ended 31st December 2023 Speakers: Managing Director and CEO - Craig McNally Group Chief Financial Officer - Martyn Roberts People caring for people
Slide 2: Important Information
Important Information The information in this presentation is general background or regulation; technological changes; the extent, nature and location of information about Ramsay Health Care Limited and its physical impacts of climate change; and geopolitical developments. subsidiaries (together, th
Slide 3: Agenda
Agenda 1 Key Themes 2 Group 1HFY24 Result Overview 3 Regional Highlights & Outlook 4 Group Financials 5 Group Outlook & Strategic Direction 6 Questions 3 People Caring for People - 1HFY24 Results Briefing 6 Months Ended 31 December 2023
Slide 4: Strategic and operational initiatives start to deliver results, further benefits expected
Strategic and operational initiatives start to deliver results, further benefits expected 7.8% revenue growth in constant currency driven by improving activity across all regions and tariff and indexation uplift Some progress agreeing new terms with payors. In order to ensure long term sustainabilit
Slide 5: GROUP – 1HFY24 Result Overview
GROUP – 1HFY24 Result Overview Significant value realised through the sale of Ramsay’s Asian joint venture with profit after tax of $618.1m, gross cash proceeds $938.4m Revenue EBIT¹ Statutory NPAT Increased 13.8² % Declined 4.7% Increased 290.2% to $8.1bn to $512m to $759m EPS Fully franked DPS NPA
Slide 6: AUSTRALIA – Result Highlights
AUSTRALIA – Result Highlights RESULT HIGHLIGHTS Australian results for the 6 months to 31st December A$’m • Revenue from patients increased 6% primarily driven by a 4.7% increase in total admissions per work-day and improved revenue indexation 2,841 3,010 • EBIT includes an increase in digital and d
Slide 7: AUSTRALIA – Activity Trends Improving
AUSTRALIA - Activity Trends Improving Surgical and medical admissions continued to grow at rates Growth in admissions per work day above historical averages six months to 31st December 2023 (%chg) • Strong growth in rehab activity reflecting above trend growth 17 in orthopaedic surgery at some Ramsa
Slide 8: AUSTRALIA – Investment Pipeline Continues to Grow
AUSTRALIA – Investment Pipeline Continues to Grow 1HFY24 INVESTMENT FY24 INVESTMENT PIPELINE FUTURE INVESTMENT PIPELINE⁶ • 1HFY24 brownfield/greenfield • FY24 capex on greenfield and brownfield development pipeline • FY25 investment in greenfield and capex $109m expected to be ~$210-260m brownfield
Slide 9: AUSTRALIA – Outlook
AUSTRALIA- Outlook OUTLOOK • Expect EBIT in FY24 to improve driven by mid single digit volume growth combined with productivity improvements coming from labour management and cost saving initiatives • Ramsay Australia is focused on a range of initiatives to accelerate the recovery in the business an
Slide 10: UNITED KINGDOM – Highlights & Outlook
UNITED KINGDOM – Highlights & Outlook Ramsay UK Elysium Healthcare Results for the 6mths Result Highlights Result Highlights to 31st December A$’m • Revenue increased 28.5%¹ and • Significant turnaround in operating performance. 1,148 EBIT increased 84%¹ driven by a Revenue increased 22.9%² and EBIT
Slide 11: EUROPE – Highlights and Outlook
EUROPE – Highlights and Outlook RESULT HIGHLIGHTS OUTLOOK Results for the six months • 17.1% growth in revenue¹ driven by a • Focus is on improving returns to 31st December A$’m 5.4% growth in hospital admissions • Expect top line volume growth of low to 3,927 combined with significant growth in mid
Slide 12: Ramsay is driving action through pillars: Healthier People, Stronger Communities and a Thriving Planet
Ramsay is driving action through 3 pillars: Healthier People, Stronger Communities and a Thriving Planet • Conducted global employee engagement survey to • Achieved FY24 renewable energy target and >75% • Appointed inaugural Ramsay Santé Mission update regional action plans. of 2026 target to instal
Slide 13: Group Financials
Group Financials Group Chief Financial Officer - Martyn Roberts People caring for people
Slide 14: 1HFY24 – Group Performance
1HFY24 – Group Performance Half Year Ended 31st December A$'m 2023 2022 Chg (%) Chg (%)cc¹ • Result benefitted from the weaker AUD Continuing Operations compared to the EUR and GBP Revenue from contracts with customers 8,085.1 7,103.7 13.8 7.8 • Revenue driven by mid to high single digit Total reven
Slide 15: Balance Sheet and Cashflow
Balance Sheet and Cashflow Balance Sheet Cashflow Statement A$'m 31/12/2023 30/06/2023 31/12/2022 Half Year Ended 31st December A$'m 2023 2022 Chg (%) Working capital (147.4) (498.4) (169.4) EBITDA excluding discontinued operations 1,043.5 1,014.5 2.9 Property plant & equip 5,343.3 5,238.1 5,035.7 C
Slide 16: Funding Group Debt Maturity Profile and Leverage
Funding Group¹ Debt Maturity Profile and Leverage Funding Group¹ Debt Maturity Profile ($m) Funding Group¹ – Bank Net Debt Funding Group¹ – Fitch Adjusted total facility limits $2,955m (AASB117)² Leverage Ratio³ and Interest Debt⁴ and Leverage Ratio⁴ Cover Ratio⁵ 100 10.27x 4.76x 7.35x 4.50x 6.59x 3
Slide 17: Consolidated Group - Debt Profile
Consolidated Group - Debt Profile Consolidated Group Total Net Drawn Debt Ramsay Santé Bank Leverage and Debt Metrics (A’$bn) (AASB16) (€’bn) (AASB117) 3.4 3.5 3.5 2.7 2.6 5.32x 2.8 4.43x 4.50x 2.3 2.5 2.4 2.6 2.7 2.0 Dec-22 Jun-23 Dec-23 1.8 1.7 1.8 Ramsay Santé Capitalised Leases (AASB16) $'bn Ram
Slide 18: Capital Expenditure
Capital Expenditure Capital Expenditure by Region (A$’m) Group Capital Expenditure Group Capital Expenditure by Type by Region (%) (A$409m) $0.8-1bn 172 320-370 360-410 409 35% 171 342 42% 150-190 164 175 138 141 94 40 23% 36 30 Australia UK Ramsay Sante Total Routine & Compliance Growth 1HFY23 1HFY
Slide 19: Outlook & Strategic Direction
Outlook & Strategic Direction Managing Director and CEO - Craig McNally People caring for people
Slide 20: FY24 – Expect Further Growth in Earnings
FY24 – Expect Further Growth in Earnings Ramsay continues to expect further growth in Group earnings from continuing operations, reflecting mid-single digit top line growth driven by low to mid-single digit growth in activity levels combined with higher reimbursement rates. The results are expected
Slide 21: FY24 – Earnings Outlook
FY24 – Earnings Outlook Ramsay expects FY24 earnings to reflect: • Mid single digit top line growth driven by low to mid single • The FY24 effective tax rate is expected to be ~33-34% digit growth in activity and higher reimbursement levels • Depreciation and amortisation is expected to be in the •
Slide 22: Priority is to leverage and strengthen core hospital network
Priority is to leverage and strengthen core hospital network OUR VISION: To leverage our global platform and be a leading healthcare provider of the future By growing, modernising and leveraging our And moving purposefully into New & Adjacent Services World Class Hospital Network Integrated patient-
Slide 23: Appendix
Appendix
Slide 24: Funding Structure
Funding Structure Consolidated Group Consolidated Group Funding Group¹ Ramsay Santé • Comprised of Ramsay Health Care Limited and all its subsidiaries Paul Ramsay Public Consolidated Group 1HFY24 • Ramsay reports its financial results on a Consolidated Group Foundation Shareholders Revenue: A$8,159.
Slide 25: Presentation speech: Front Cover and opening remarks
ASX ANNOUNCEMENT 29th February 2024 Ramsay Health Care 1HFY24 Results - Presentation Speech Slide 1 Front Cover Good morning everyone and thank you for joining us today as we present our FY24 interim results. I am Craig McNally, and I am joined by Martyn Roberts, our Group Chief Financial Officer. S
Slide 26: Ramsay Sime Darby sale outcome
We are incredibly pleased with the outcome of the Ramsay Sime Darby (RSD) sale process, which reflects the benefits of running a considered, competitive process and our commitment to disciplined portfolio management. Proceeds from the sale of RSD, which settled on the 28th of December, combined with
Slide 27: Labour productivity and payor indexation
Our focus on improving labour productivity has returned most metrics to pre-Covid levels. While sick leave and agency use have improved, both continue to fluctuate with outbreaks of COVID and other viruses in the community. Our investment in programs to advance our digital capabilities are expected
Slide 28: Developments at major sites
The focus continues to be on developments at our major sites that strengthen our core hospital presence. To this end during the half, the Board approved a new greenfield short stay facility in south-west Sydney and a major expansion of the private hospital on the Joondalup site in Perth. These proje
Slide 29: Slide 10 - United Kingdom - Highlights & Outlook
Slide 10 - United Kingdom - Highlights & Outlook Turning to the UK region which reported a 114% overall increase in EBIT in local currency, with the acute care business continuing its strong trajectory of improvement and the changes being made at Elysium starting to flow through to improved earnings
Slide 30: EBITDA in local currency declined 12.5%
EBITDA in local currency declined 12.5% compared to the 73.5% or €109m decline in total government support payments and reflects the benefits of cost and other productivity measures the business has introduced over the last twelve months. EBIT includes a positive contribution from non-recurring item
Slide 31: Net zero emissions goal and Group financials
We continue to work towards our net zero greenhouse gas emissions goal and have now achieved 75% of our target to install 6.3 megawatts of renewable energy projects by 2026. All our regions are rolling out new ways to reduce emissions and waste. I will now hand you over to Martyn to run through the
Slide 32: Slide 16 – Funding Group Leverage and Debt Maturity Profile
Slide 16 – Funding Group Leverage and Debt Maturity Profile Moving to leverage. On this slide we have given you the Funding Group net debt, interest cover and leverage ratios based on the calculation used by our banks and by Fitch. In the first half, we focused on extending our Funding Group debt ma
Slide 33: Strategy and Outlook speech
by the end of year 5. Both metrics have increased from greater than 10%. The EPS accretion targets remain the same. Ramsay will retain a disciplined approach to capital investment and we expect the balance sheet will be further bolstered by our strong cash generation capability. I will now hand you
Slide 34: Closing remarks
With Ramsay’s unmatched network of strategically located facilities; world class healthcare team; industry-leading investment in clinical excellence; trusted payor relationships; targeted push into new and adjacent services; and investment in technology, we feel strongly that we are uniquely positio