Sonic Healthcare Limited · ASX:SHL
Sonic Healthcare — Shareholder Meeting (November 2009)
28 slides from Sonic Healthcare's shareholder meeting presentation, Nov 19, 2009
Slide 1: Annual General Meeting
Annual General Meeting 19 November 2009 Colin Goldschmidt Chief Executive Officer
Slide 2: FY 2009 Highlights
FY 2009 Highlights Record financial result Sonic outperforms guidance Business resilience in face of global financial crisis Strong organic growth in Australia, Germany, USA Margin expansion in Australia, Germany, USA Balance sheet strength for future growth
Slide 3: FY 2009 Financial Highlights
FY 2009 Financial Highlights Revenue ↑ 27% EBITDA ↑ 21% Net profit ↑ 29% EPS ↑ 16% Cash generation ↑ 33%
Slide 4: FY 2009 Guidance Delivered
FY 2009 Guidance Delivered FY 2009 FY 2009 Guidance Actuals Revenue growth >15% 27% Earnings per share growth >10% 16%
Slide 5: FY 2010 Guidance Reaffirmed
FY 2010 Guidance Reaffirmed FY 2010 Guidance Net pprofit after tax (NPAT) ( ) ggrowth 10 - 15% Based on FY 09 NPAT of A$315 million Assumes FY 09 currency exchange rates Minimal change in rates YTD Oct FY 10 Ongoing strong AUD may impact reported results Underlying businesses (in local cur
Slide 6: Dividend
Dividend 2009 2008 Change I Interim i Di Dividend id d $0 22 $0.22 $0 20 $0.20 10 0% 10.0% Final Dividend $0.35 $0.32 9.4% Full Year Dividends $0.57 $0.52 9.6% Di id d franked Dividend f k d to t 35% Dividend Reinvestment Plan remains suspended
Slide 7: Full-year dividend Year History
Full-year dividend 15 Year History 60 50 40 Cents per 30 Share 20 10 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Dividend (cents) 3 4 5 9 14 15 17 20 25 30 36 41 46 52 57
Slide 8: Financial Summary
Financial Summaryy FY 09 FY 08 Growth % Revenue A$M 3,014 2,380 27% EBITDA A$M 579 479 21% NPAT (before NRIs) A$M 315 245 29% Non-recurring items after tax New Zealand pathology * A$M (136) Items expensed in H1 09 ** A$M (8) NPAT statutory A$M 171 EPS (diluted, before NRIs) cents 85.2¢ 73.5¢ 16% Cas
Slide 9: Revenue
Revenue 2009 2008 Growth (A$M) (A$M) (%) Total Revenue 3,014 2,380 27% Organic revenue growth (excluding acquisitions) Australian pathology 9% Market growth 4.8% USA 5% Market growth ~4% Europe 6% Includes German fee cuts Australian radiology 3% Fees to increase from 1 Nov 09
Slide 10: Revenue Split
Sonic Healthcare R Revenue Split S lit FY 09 5% 12% Laboratoryy Radiology Laboratory y 83% Pi Primary care
Slide 11: Revenue Split FY 2009
Revenue Split FY 2009 IPN Medical Centres Radiology $159 5% $345 12% Australian A li New Zealand Pathology Pathology $114 4% $881 29% Switzerland $74 3% UK $103 3% Germany $625 USA 21% $700 23% Revenue in A$ million
Slide 12: Sonic Revenue Growth
Sonic Revenue Growth 3,000 , 2,500 2,000 A$M 1,500 1,000 500 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1993 2009 Revenue (A$ million) 33 3 014 3,014
Slide 13: Synergies and Margin Expansion
Synergies y g and Margin g Expansion p A$44 million organic EBITDA added in FY 09 USA – margin expansion of >200 basis points (bps) Germanyy – margin g expansion p of >100 bps p Despite fee cuts commencing 1 January 2009 Australian Pathology H2 09 margin i expansion i off 60 bps b (vs (
Slide 14: Sonic EPS Growth
A$ cents 10 20 30 40 50 60 70 80 90 0 1993 19944 19955 19966 EPS (A$ cents) 19977 19988 19999 20000 2001 20022 2003 20044 Sonic EPS Growth 3.2 32 20055 1993 20066 20077 85.3 85 3 2009 20088 20099
Slide 15: Australian Pathology
Australian Pathology Strong market share growth – clear market leader Sonic ~20% larger than nearest competitor Revenue growth of 9% vs market growth of 4.8% Strong revenue growth continuing into FY 10 Fee reforms Medicare fee cuts introduced 1 November 2009 New private billing policie
Slide 16: USA
USA Sustained strong performance from Sonic USA Organic revenue growth 5% vs market growth ~4% M i expansion Margin i off >200 bps b Synergies realised Group purchasing annual savings > US$3 million Inter-company referrals increased by ~42% ACS integration into Sunrise, with closure of
Slide 17: Germany
Germany Financial performance Organic revenue growth of 5% Margin expansion of >100 bps Strong performance into FY 10 Management Sonic Germany Executive Committee (GSEC) established C ll b ti synergy and Collaboration, d iintegration t ti on ttrackk Hamburg merger Completed seamles
Slide 18: Switzerland
Switzerland Ongoing strong financial performance Integration of Laboratory Krech acquisition complete Expected synergies realised New government fee schedule from 1 July 2009 Fee reductions for routine tests Fee increases for esoteric tests “Case Fee” per request increased Sonic’s ca
Slide 19: UK
UK St Strong revenue and d earnings i growth th Organic revenue growth 15% Establishment of small operation p in Manchester TDL wins major private hospital pathology tender BMI Healthcare is the largest private hospital group in the UK TDL to provide all BMI’s BMI s pathology services
Slide 20: Auckland Laboratory Contract
Auckland Laboratory Contract DML’s community laboratory contract for Auckland contract not renewed Contract represented <2% of Sonic’s revenue and earnings Remaining NZ pathology represents <1% of Sonic’s earnings Write-down of book value of intangible assets for all NZ pathology (FY 09) N
Slide 21: Radiology
Radiology Difficult conditions in FY 09 Australian Medicare fee increases Government acknowledgement of value of radiology Commencingg 1 November 2009 Expecting improved performance through FY 10
Slide 22: Sonic Debt Summary
Sonic Debt Summary I Investment t t Grade G d Credit C dit Metrics M ti 30 Jun 09 31 Dec 08 30 Jun 08 Net interest-bearing debt A$M 1,198 1,536 1,238 Gearing ratio % 32.1 36.5 38.0 I Interest cover X 65 6.5 57 5.7 64 6.4 Debt cover X 2.2 2.3 2.5 Notes: Gearing ratio = Net debt / Net debt + equit
Slide 23: Funding Available for Growth
Funding Available for Growth A$M Cash at 31 Oct 09 477 Undrawn bank credit lines* 270 Note issue in Jan 2010 (US$250M) 277 AVAILABLE HEADROOM 1,024 A il 2010 bbankk d April debt bt maturity t it ~A$385 A$385 million illi How much to refinance with existing banks Decision will be made in 2010
Slide 24: Acquisition Strategy
Acquisition Strategy Significant headroom now established Focus on synergistic acquisitions G Growing i pipeline i li off potential t ti l opportunities t iti In strong position to resume acquisition activity
Slide 25: Global Markets – Future Growth
Sonic Healthcare Global Markets – Future Growth USA Europe Australia
Slide 26: EBITDA Contribution FY 09: The Value of Organic Growth
EBITDA Contribution FY 09 Th V The Value l off O Organic i GGrowth h 550 Realised margin on organic revenue growth = 33% (marginal profit) 500 43.7 EBITDA 33.6 450 A$M $ 520.8 32.6 400 410.9 350
Slide 27: Summary
Summary Sonic Healthcare in strong and secure position Revenue and market share growth in key markets Demonstrated synergy capture in key markets Infrastructure / Organic growth / Marginal profit Investment grade balance sheet Acquisition pipeline filling Stable culture and management
Slide 28: Sonic Healthcare – Key Attributes
Sonic Healthcare – Key Attributes GROWTH Strong revenue growth – CAGR 33% over 16 years 14 consecutive years of double-digit EPS growth Track record of acquisitions acquisitions, integration, integration synergy Diagnostic industry growth – new tests, CT/MRI, ageing population, preventativ
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