Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — H1 FY2005 Earnings Presentation
25 slides from Ramsay Health Care's earnings presentation, Feb 24, 2005
Slide 1: Financial Results Briefing, half-year ended 31 December 2004
ne ms RAMSAY HEALTH CARE Briefing - 24 February 2005 Financial Results half-year ended 31 December 2004
Slide 2: Overview
RAMA OVERVIEW ALTH CARE w strong first half performance, core net profit up 17% » Full year guidance upgraded - on track to comfortably exceed initial forecast for at least 10% core profit growth in FY2005 » Organic profit growth of 6.5% highlights strength of portfolio, focus on core business » Ple
Slide 3: Financial Performance
Ee RAMSAY FINANCIAL PERFORMANCE HEALTH CARE $m_ a % Inc. Operating Revenue 374.1 544.6 46% Operating Revenue (excluding Benchmark) 374.1 424,2 13% EBITDA 51.7 66.5 29% EBITA 37.9 48.5 28% EBITA (excluding Benchmark) 37.9 43.41 14% Net Profit before Tax 30.4 34.0 12% Net Profit after Tax 18.8 22.3 18
Slide 4: EPS and Interim Dividend
Basic EPS 14.6 ¢ 17.2 ¢ 17% Core EPS (1) 16.6 ¢ 19.2 ¢ 16% Interim dividend — fully franked 7.5¢ 8.5 ¢ 13% “) Before amortisation of goodwill and non-recurring items
Slide 5: Strong EBITA
RAM Gay STRONG EBITA HEALTH CARE $m 50 $48.5 45 $39.7 40 $37.9 35 $33.2 $33.8 30 25 20 T T T T Dec'02 Jun'03 Dec'03 Jun’04 Dec'04 RHC (existing business) © Benchmark (acq 1 July'04) a EBITA up 28% for the half-year e EBITA (excl Benchmark) up 14%
Slide 6: Margins
Margins ¢ Group EBITA margin 8.9% ¢ EBITA margin (excl Benchmark) 10.2% « Group EBITDA margin 12.2% ¢ EBITDA margin (excl Benchmark)13.6% @ Organic Growth - 6.5% @ Growth from Expanded Capacity - 7.1% & Growth from Acquisitions - 14.4%
Slide 7: Core Net Profit Growth Increasing
ae RAMSAY HEALTH CARE CORE NET PROFIT GROWTH INCREASING $m 26 24 22 20 i8 16 24.9 21.3 21.4 : : L L Dec'02 Jun'03 Dec'03 Jun'04 Dec'04 « Core NPAT up 17% for the half-year « Profit growing at an increasing rate based on strong underlying business
Slide 8: Strong EPS Increase
nAS ay STRONG EPS INCREASE HEALTH CARE 20 19.2 £ 18 é 16.6 16.6 kw 2 16 ¥ 14.6 14.7 co o Oo 14 12 T T . Dec'02 Jun’03 Dec'03 Jun’04 Dec'04 a Core EPS up 16% for the half-year
Slide 9: Effective Cash Flow Management
- EFFECTIVE CASH FLOW MANAGEMENT. Annual Half-year FY 2003 FY 2004 Dec'03 Dec'04 EBITDA (Gross Operating Cash Flow = Effective working capital management leads to half-year EBITDA translating into strong gross operating cash flow
Slide 10: Financial Capacity
Ee RAMSAY FINANCIAL CAPACITY HEALTH CARE Equity issue to raise a total net $80.3 m 2 Dec’64 Share placement to institutional investors 20 Jan’05 Share purchase pian to retail investors 0.2 14 Mar’05 Share issue to Paul Ramsay Holdings P/L (app. 8 Feb‘05) 5.4 Total shares issued 11.0 > Raising to hav
Slide 11: Growth Strategy Cornerstones
ae ramMsay GROWTH STRATEGY CORNERSTONES HEALTH CARE 1. Focus on core hospital management 2. Invest in existing facilities 3. Grow through acquisitions in the hospital sector 4, Pursue opportunities outside hospitals close to core competencies - aged care
Slide 12: Focus on Hospital Management
Es RAMSAY FOCUS ON HOSPITAL MANAGEMENT ALTER CABEB a Quality and diverse range of facilities, payor sources » Market position, demand for quality facilities basis for constructive negotiations with health funds a Effectively manage cost pressures » Maintain good relationships with staff, doctors and
Slide 13: Occupancy - Patient Days
aS RAMSAY HERAL OCCUPANCY -— PATIENT DAYS 620 7 A | sao VA 8 ® w S460 = ‘A— z 7 ~ 2 380 Zn A — —— oo o a 4 o o o 300 A on Sa + 220 T T T T T T T T 1 Dec'00 Jun'O1 Dec'01 Jun’02 Dec'02 Jun'03 Dec'03 Jun-04 Dec'04 —+— Inpatients = ¢ «Inpatients (excl Benchmark) —:— Total (Inpatients + Day Patients) =
Slide 14: Capacity Expansion (higher returns, lower risk)
RAMSAY CAPACITY EXPANSION (higher returns, lower risk) HBALTHR CAR » Investment from 1st phase of capacity expansion meeting expectations: >» Greenslopes > Hollywood >» Lake Macquarie » Capacity expansion accounts for 7.1% of EBITA growth in half year = mt iN 28 (rebuilt 86 bed facility to come onst
Slide 15: Hospital Acquisitions Enhance Portfolio
Sl can oay HOSPITAL ACQUISITIONS ENHANCE PORTFOLIO ALYH CABE Benchmark hospitals performing in line with forecast » Results on track for positive EPS contribution this year >» Significant profit contribution expected over next 2 years Phase 1 >» Expansion program begun by Benchmark builds platform f
Slide 16: Hospital Acquisitions Enhance Portfolio
canoay HOSPITAL ACQUISITIONS ENHANCE PORTFOLIO ALYTH CARE Benchmark Phase 2 >» Further significant growth expected from Ramsay’s plans for additional revamp and expansion to some facilities ¢ Churchill (adding theatres, beds) « Mitcham (theatre expansion, day surgery) « Beleura (expansion of psych s
Slide 17: Aged Care Expansion on Track
na nnsay AGED CARE EXPANSION ON TRACK » Dual strategy - acquisitions & greenfields development » Greenfield developments >» RHC has 206 aged care places in Coffs Harbour and Brisbane >» Targeting 500-600 beds to be operational within 3 years » Fundamentals for investing in aged care remain positive
Slide 18: Ellis Aged Care Acquisition
a Atay ELLIS AGED CARE ACQUISITION HBALTH CARE The acquisition comprises: » Five facilities and adjacent land » Quality, near new facilities with potential for upgrade, no development risk Gracedale, 75 extra service beds Bairnsdale, 90 low care/extra service beds Lakeview, 76 low/high care beds Pay
Slide 19: Ellis Aged Care Acquisition
nA RAY ELLIS AGED CARE ACQUISITION HEALTH CARE Ramsay will add further value through: > Additional capacity using adjoining land to develop additional aged care services, including independent living units > Introduction of additional extra service places > Increased revenue, EPS positive in 24 year
Slide 20: Outlook
Ee RAMSAY OUTLOOK ALYTH CABE » 24 half core net profit expected to match 1* half result, despite seasonality » Full year expectations now comfortably above company’s initial guidance for FY 2005 a Significant financial capacity supports our strategy to continue to pursue acquisitions in both hospita
Slide 21: Appendix
ne ms RAMSAY HEALTH CARE Appendix
Slide 22: Revenue Growth Time Line
naneay Revenue Growth Time Line HEALTH CARE $m 1,200- Benchmark Group Acquired Jul’04 1,100- Greenslopes Major 1,000- Expansion Opened May 03 900-1 Hollywood Major Expansion Opened Jul’02 800- Alpha Group 700- Acquired May’01 600- North Shore Private Hosp Opened Jul'98 500 x 5 RHC Listed Greenslopes
Slide 23: Diversified Income Stream
RAMSAY Diversified Income Stream HEALTH Cd Revenue by Division Revenue by State Revenue by Payor Source ees G Psychiatric NSW D Health Funds Co-located 0 Victoria @ Rehabiliation . O Government © South Australia @ Med/Surg . land @ Veteran [1 Home Care Queenslan B@ Veteran @ West Australia @ Other
Slide 24: Facility Portfolio
RAMSAY Facility Portfolio HEALTH CARE. Number : Operating Divisions of es Facilities () HOSPITALS: Veteran 2 981 Co-located 3 379 Medical/Surgical 19 1,819 Psychiatric 8 541 Rehabilitation 4 264 Under Management Contract 1 60 Total Facilities 37 4,044 AGED CARE SERVICES: Aged Care Facilities (high/l
Slide 25: RAMSAY |
ne ms RAMSAY | HEALTH CARE