Sonic Healthcare Limited · ASX:SHL

Sonic Healthcare — Shareholder Meeting (November 2005)

42 slides from Sonic Healthcare's shareholder meeting presentation, Nov 24, 2005

  1. Slide 1: Annual General Meeting November 2005

    Annual General Meeting 24 November 2005 Dr Colin Goldschmidt CEO.and Managing Director

  2. Slide 2: FY2004/5 record results; FY2005/6 tracking to guidance

    HEALTHCARE FY 2004/5 - Record financial results FY 2005/6 - ‘Tracking to Sonic’s guidance range “after 4 months: Service levels and reputation outstanding Organic growth fuelled by strong global pathology and radiology demand Platforms for growth in UK, German, USA markets Company in strong position

  3. Slide 3: Growth 2005 vs 2004

    Growth 2005 vs 2004 Revenue 33% EBITA 33% NPAT 34% : Operating Cashflow 40% -| Core* EPS 21% EPS 31% Dividend (full-year) 20% SONIC HEALTHCARE *Core = Before amortisation of intangibles

  4. Slide 4: Sonic Guidance vs Actuals

    Sonic Guidance Actuals $M $M Revenue ~ 4.330-1.370 |: 1,382 EBITA 245 - 260 261. Sonic issued a profit upgrade in February 2005 > aves HEALTHCARE

  5. Slide 5: Total revenue 2005 vs 2004

    2005 2004 Growth ($M) ($M) (%) Total Revenue 1,382.4 1,037.4 33.3% ° Acquisitions completed in FY 2005 — IPN, Endeavour Healtheare/Accord Pathology e Organic growth (non-acquisition) in 2005 ~7% e CPL acquisition (30 September.2005) in USA will-boost 2006 revenue growth e..-Strong organic revenue gr

  6. Slide 6: Revenue 1992-2005 and 2006 forecast

    (io oo = oe 1992 | 1993 | 1994 | 1995 | 1996 ] 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 |zooar) ~ |m Revenue (SM) 33 | 44 47 58 89 133 447 174 387 628 860 975 | 1,037 | 1,382 | 1,635 = Forecast 2006 Revenue > SONIC HEALTHCARE

  7. Slide 7: > aves

    > aves HEALTHCARE

  8. Slide 8: 2005 Actuals and 2006 Guidance

    2005 Actuals | 2006 Guidance Growth $M $M % Revenue 1,382 1,600 — 1,670 18.3% EBITA 261 300 —'320 18.8% = Sonic tracking to 2006 guidance range after 4 months » Growth calculated using mid-point of 2006 guidance = Includes full year of IPN " Includes CPL acquisition from 1 October 2005 » Assumes con

  9. Slide 9: Dividends 2005 vs 2004

    2005 2004 Change Interim Dividend $0.13 $0.10 30% Final Dividend $0.23 $0.20 15% Full Year Dividend $0.36 | ~~ $0.30 20% e — Dividend fully. franked at 30%) e .Dividend Reinvestment Plan currently suspended > SONIC HEALTHCARE

  10. Slide 10: Dividend per share (cents)

    40 Cents per. Share i Dividend (cents)} 3 4 5 9 14 16 17 20 25 30 36 > SONIC HEALTHCARE

  11. Slide 11: Core earnings per share

    QI per share 1992 19 1994 1995 1996 1998 1999 2000 |f- 2001 Core Earmings = Before amortisation 2002 2005 - [| 2003 2004 HEALTHCARE

  12. Slide 12: SHL Core Earnings per Share Growth (%)

    50% 40% 30% - 20% ~40% 0% > SONIC HEALTHCARE SHL - Core Earning per Share Growth (%) 42% 4997 1998 1999-2000. 2004 “2002 ~*~ 2003 2004 "Core EPS = Earnings per Share before Amortisation of Intangibles

  13. Slide 13: Share price chart

    GOMEILO SO/FE/LO vOILOAE vOMONE EO/LOAE SON OAE ZOMO/LE ZOMOAE LO/LOAE LOMOAE OODLE OOH OE BB/LOAE BE/LONE E 8G/L0ne B6/ONE LGILONE E L6HO/S E S6/Z0/LE S6/LGNE SOLOS SE/LONE EF P6/LO/Le PGMONE SGLONE EGOS ZEOMLE ZGAOLE L60/LE LGALO/LE O6/LO/LE O6/O/LE $16.00 $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2

  14. Slide 14: Successful capital raising of $225 million in October 2005

    Successful capital raising of $225 million in October 2005. ® -e Proceeds used ‘to retire debt associated with CPL acquisition e Priced at $14.54, a 3.5% discount to prior day’s closing price ~@ Share Purchase Plan : eo... Opportunity for loyal shareholders to participate in equity raising e Current

  15. Slide 15: Sonic Core EPS performance

    Sonic Core EPS performance “Australia 1987 New deatand SONIC HEALTHCARE

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  17. Slide 17: UK: TDL and Omnilabs history

    SONIC HEALTHCARE “Sonic acquires TDL in 2002. - Sonic acquires Omnilabs in 2003 Omnilabs merges into. TDL in 2004 , ~ TDL relocates to new laboratory facility i in 2004 : Sonic/TDL secures major public-private partnership with UCLH in- 2004. UK Government decision to outsource pathology and radiolog

  18. Slide 18: NHS outsourcing update

    e x SONIC HEALTHCARE NHS ‘outsourcing update ..@-..Pathology.outsourcing tenders delayed due to election and focus on radiology tenders and primary care outsourcing Pathology tenders expected in first half 2006 TDL performing well in Harley Street market TDL — UCLH joint venture progressing well TDL

  19. Slide 19: SONIC

    SONIC HEALTHCARE

  20. Slide 20: Schottdorf Group acquisition

    SONIC HEALTHCARE Sonic acquired 56% interest i in Schottdorf Group i in. 2004 Schottdorf business achieved outstanding results | in FY 2005 Strong volume growth and efficiencies : - Acquisition earnout of €8.1 million paid: in-full Acquisition opportunities in: private pathology sector Evolving oppo

  21. Slide 21: UK-Germany synergies and acquisition opportunities

    e UK-— Germany synergies already established «Esoteric pathology specimens transported from TDL to Schottdorf daily _ Additional revenue to Schottdorf e ._ Lower testing costs for TDL «.. Better service delivery and turnaround times ad Acquisition opportunities i in Germany e Consolidation of market

  22. Slide 22: German business market and financing the transaction

    HEALTHCARE Excellent impression.of German business market ~ Similar business culture.and standards - . Strong legal and accounting systems se No major legislative, tax or legal hurdles Language « Not an issue . «...Everyone speaks excellent English! ‘Financing the transaction e.. Some difficulty in

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  24. Slide 24: Sonic acquired 82% of CPL for ~$312 million

    Sonic acquired 82% of CPL on 30 September 2005 for ~$312 million CPL is the largest regional independent laboratory in the USA--- CPL’s core market is Texas, with newly established markets in Ohio and Virginia. (Washington DC area) Annual revenue of ~US$190 M (~A$250 M) per annum. CPL has a proven,

  25. Slide 25: CPL history

    SONIC HEALTHCARE 1999 2000 2001 2002 2003 1948 — 1989 Forerunner of CPL, Austin pathologist group 1990 - 1997.Expansion.into San Antonio, Dallas Acquisitions of Seguin Labs and Waco Medical Group Lab Acquisitions of labs in Houston, Dallas, Denton, Victoria. CPL recapitalises with entry of private e

  26. Slide 26: CPL's core market

    . CPL’s core market Texas, Oklahoma, Arkansas, Louisiana -.. South. West laboratory market estimated at US$1.3 billion annually + CPL has around 15% share of Texas market (population 22 million) -. Major referrals from Austin, Dallas and San Antonio +. Extensive network of local pathologist relation

  27. Slide 27: CPL management committed to growing with Sonic

    committed to growing the. business with Sonic ¢ Dr Robert Connor, M.D., Chairman, CEO, Medical Director « . Qualified and practising pathologist « » Became.Chairman and CEO of CPL in 1990 ““e- Has driven the medical.leadership madel of CPL ~ both pathologists and clinicians e Mr David Schultz, B.S.B

  28. Slide 28: Initial equity structure: Sonic 82%, CPL management 18%

    ° Initial equity structure: Sonic 82%, CPL management 18% e Non-Sonic shareholders « - Largest shareholders: Dr Robert Connor (CEO) and Mr David Schultz (COO) « Other minority shareholders include Pathologists and senior managers : e . Sonic will move progressively to acquire 100% of CPL over a 3 ye

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  30. Slide 30: US laboratory industry revenue

    e Laboratory testing is linked-to the entire US healthcare system @.- Hospital care, GP and specialist services, nursing homes, home healthcare etc -_ e Pathology expenditure inthe US ¢ -~3.0% of overall US health services expenditure e _ Estimated future growth. rates of approximately 7% p.a. throu

  31. Slide 31: Laboratory Industry Share

    Laboratory Industry Share by Test Revenue, 2003 “Other labs . Physician 7% owned labs | Ts Hospital Independent based fabs - “-glinical tabs BAG : 32% Source: Washington G2 Reports SONIC HEALTHCARE

  32. Slide 32: > SONIC Source: Washington G2 Reports

    15 << > SONIC Source: Washington G2 Reports HEALTHCARE

  33. Slide 33: The Sonic Healthcare Federation

    ~The Sonic Healthcare Federation — « Local identity preserved . ' Management autonomy . Central synergy resource * Group purchasing * Benchmarking * IT synergies * E-Health ¢ Shared marketing. * Quality Control . Management Training sinterreferals =~ © Lab design J Workflow - Work: exchange © * Fina

  34. Slide 34: Global Federation Model

    Global Federation Model —

  35. Slide 35: Company Secretary

    e . Company Secretary ~ Mr Paul Alexander > aves HEALTHCARE

  36. Slide 36: Directors and Sonic Healthcare Model

    . Non-executive Directors @ Mr Barry Patterson —.Chairman @. Mr Peter Campbell @- Mr-Lou Panaccio ---e@- Executive Directors e.- Dr Colin. Goldschmidt ~ Managing Director Mr Chris Wilks — Finance Director @. Mr Colin Jackson - Commercial Director, Chairman IPN Dr Philip Dubois — Chair Sonic Radiolog

  37. Slide 37: IPN and Endeavour Healthcare acquisition

    SONIC HEALTHCARE onic holds 72% interest in IPN results consolidated into Sonic from 26.8.04 IPN acquisition of Endeavour Healthcare e~: Completed on.26.11.05 : @». 18 Medical Centres acquired (Sydney and Perth) «Integration into IPN structure successful « -Loan of $8 million from Sonic to fund the

  38. Slide 38: New laboratory and headquarters facility rationale

    “e Rationale DHM and Sonic moved into current building in 1994 DHM’s revenue has increased 5-fold since 1994 Sonic’s revenue has increased from ~$50 million to ~$1, .600 million since 1994 Space issues for:both DHM. and Sonic Headquarters e- Requirements e Building ee 8 8 8 > SONIC HEALTHCARE Facili

  39. Slide 39: Commit to service excellence

    Commit to service excellence... Treat each other with respect and honesty ~ Demonstrate responsibility and accountability _ Strive for continuous improvement ~ Maintain confidentiality SONIC HEALTHCARE

  40. Slide 40: Medical Leadership

    . Medical Patio Medical Leadership .,...-.. Technicaland. Professional. Personalised. — _ Satisfying — ; | | on os . _ Operational. and Academic. Service for. | - Patient Needs © : ; ae pos _- Excellence. Expertise . ~~ Doctors > Peas, HEALTHCARE

  41. Slide 41: Australian businesses in strong position

    ~e. Sonic Australian. businesses i in strong:position e Excellent pathology and radiology businesses e. Extensive infrastructure> - : ‘e Outstanding relationships with medical profession e Strong offshore growth prospects _ e .CPL opens a-major-new growth market inthe USA e -TDL/Sonic UK set for ext

  42. Slide 42: Thank you

    << S Thankyou > [SONIC HEALTHCARE

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