Healius Limited · ASX:HLS
Healius — Primary Health Care — FY2014 Earnings Presentation
21 slides from Healius's earnings presentation, Aug 13, 2014
Slide 1: Results for year ended 30 June 2014
Results for year ended 30 June 2014 13 August 2014
Slide 2: Highlights
Highlights FY2014 result demonstrates the strength and resilience of the Primary model FY2014 result highlights • EBITDA up 4.7% to $399.1m • 80 bps EBITDA margin expansion in Medical Centres • 8.3% 2HFY2014 EBITDA growth in Medical Centres over pcp • Revenue growth of 6.1% in Pathology and 7.7% in
Slide 3: Proposed Federal Government co-payment initiatives
Proposed Federal Government co-payment initiatives • Considerable uncertainty on the nature and extent of these changes (if any) that will be legislated • In the event some form of legislation is passed, the earliest it will come into force will be July 2015 • Specific details about how any changes
Slide 4: Summary income statement
Summary income statement Year ended Year ended $m 30 June 2014 30 June 20131 Revenue 1,524.1 1,440.0 EBITDA 399.1 381.2 EBITDA margin 26.2% 26.5% Depreciation and amortisation (94.0) (89.3) EBIT 305.1 291.9 Finance costs2 (71.7) (76.6) Income tax (70.8) (65.3) Minorities (0.1) 0.1 Net profit after t
Slide 5: Cash flow
Cash flow Sustained operating cash flow generation Year ended Year ended $m 30 June 2014 30 June 2013 Cash flow from operating activities 269.0 264.4 Add back: - Net interest and finance costs paid 60.7 71.4 - Net income tax paid 57.6 45.8 - Other - 0.3 Gross operating cash flow 387.3 381.9 Gross op
Slide 6: Medical Centres
Medical Centres Margin expansion and EBITDA growth validates large scale model Year ended Year ended $m 30 June 2014 30 June 2013 Revenue 309.6 300.8 EBITDA 175.8 168.4 EBITDA margin (%) 56.8% 56.0% • Revenue growth of 2.9% impacted by: - Dental revenues decreased $6.8m 1H2014 vs. 1H2013, now growin
Slide 7: Medical Centres – Historic EBITDA performance
Medical Centres – Historic EBITDA performance Strong 2H2014 EBITDA performance $200m 56.8% 58% 56.0% 54.8% 55.2% 55% $160m $91m 52% $84m $120m $81m $76m 49% $80m 46% $40m $75m $79m $84m $85m 43% $0m 40% FY2011 FY2012 FY2013 FY2014 1H EBITDA 2H EBITDA EBITDA margin (RHS) • 8.3% increase in 2H2014 ove
Slide 8: Medical Centres – Growth
Medical Centres – Growth 1 Backfill existing centres • Newest 22 centres are currently under 7 years old • Operational leverage as health professionals are added to a centre’s fixed cost base 2 Addition of new specialists to enhance offering at Primary’s medical centres • Primary IVF launched July 2
Slide 9: Medical Centres – Warringah
Medical Centres – Warringah • Relocation and upgrade of the original Primary centre opened 30 year ago • Opened November 2013 • Services offered at Warringah centre by approximately 100 professionals include: - General practice - Pathology collection - Radiology (including MRI) - Expanded day surger
Slide 10: Medical Centres – Primary IVF
Medical Centres – Primary IVF • Primary IVF launched July 2014 - IVF Medicare services will be bulk-billed (i.e. no co-payment) • Consistent with Primary’s core objective to provide high quality, affordable, accessible health care • First site is co-located at Primary’s George Street medical centre
Slide 11: Pathology
Pathology Continued growth in revenue and EBITDA Year ended Year ended $m 30 June 2014 30 June 2013 Revenue 887.4 836.3 EBITDA 156.7 147.8 EBITDA margin (%) 17.7% 17.7% • Annual revenue growth of 6.1% • No fee increase / decrease during FY2014 • PRY market share stable • Volume growth over recent mo
Slide 12: Pathology – Historic EBITDA performance
Pathology – Historic EBITDA performance Consistent growth in EBITDA despite weak funding environment $180m 20% 17.7% 17.7% 16.9% 16.0% $150m 16% $120m $82m $78m 12% $71m $90m $63m 8% $60m $70m $75m 4% $30m $55m $61m $0m 0% FY2011 FY2012 FY2013 FY2014 1H EBITDA 2H EBITDA EBITDA margin (RHS) • EBITDA
Slide 13: Pathology – Growth
Pathology – Growth 1 Ongoing investment in infrastructure and automation • Maintain and extend quality, cost and efficiency leadership 2 “Bolt-on” acquisitions plus organic growth • Early stage commencement of pathology services into Tasmania • Acquisitions used to enhance capabilities, expand footp
Slide 14: Imaging
Imaging Imaging division continues to grow Year ended Year ended $m 30 June 2014 30 June 20131 Revenue 316.1 293.4 EBITDA 73.0 68.1 EBITDA margin (%) 23.1% 23.2% • 7.7% revenue growth • Strong growth in MRI revenue since Medicare funding changes in November 2013 • Successful tender for immigration v
Slide 15: Imaging – Growth
Imaging – Growth 1 Optimisation of radiologist model • Continued move to fee for service model • Reduce reliance on locums 2 Improved utilisation of MRI equipment • November 2013 changes broadened the range of GP referrals covered by Medicare • Strong increase in MRI revenue, however funded MRIs rem
Slide 16: Health Technology
Health Technology Positive renewal trend in core Medical Director product Year ended Year ended $m 30 June 2014 30 June 2013 Revenue 37.2 37.0 EBITDA 20.2 20.2 EBITDA margin (%) 54.3% 54.6% • Positive renewal trend in core Medical Director product and other GP software products • Hospital applicatio
Slide 17: Corporate
Corporate Net corporate EBITDA in line with expectations Year ended Year ended $m 30 June 2014 30 June 2013 Revenue 4.0 1.6 Expenses (30.6) (24.9) EBITDA (26.6) (23.3) • FY2014 revenue includes $3m profit on sale of Vision shares • Expenses include $2m non-recurring settlement of legal matters • Oth
Slide 18: Capital investment
Capital investment Disciplined approach to capital expenditure Year ended Year ended $m 30 June 2014 30 June 2013 Property, plant and equipment 72.4 66.6 Business acquisitions 70.6 69.8 Intangibles 42.3 36.6 Sub-total ex-Warringah medical centre 185.3 173.0 Warringah medical centre 17.6 4.9 Total 20
Slide 19: Debt position
Debt position Refinance of bank debt extends maturity profile and reduces the cost of debt Year ended Year ended $m 30 June 2014 30 June 2013 Bank and finance debt 952.7 930.3 Cash (27.5) (34.7) Retail Bonds 152.3 152.3 Net debt per balance sheet 1,077.5 1,047.9 • $1.25bn bank debt facility out to J
Slide 20: Summary and outlook
Summary and outlook FY2014 result • EBITDA up 4.7% to $399.1m • EPS up 7.7% to 32.2 cents (up 9.7% excluding $3.0m refinancing charge) • Full year dividend of 20.0 cents per share is 14.3% higher than FY2013 FY2015 earnings guidance • EBITDA $410m-$425m • EPS growth of 5%-12% • Earnings guidance inc
Slide 21: Disclaimer
Disclaimer • This presentation has been prepared by Primary Health Care Limited (ACN 064 530 516) (‘PRY’). • Material in this presentation provides general background information about PRY which is current as at the date this presentation is made. Information in this presentation remains subject to