Regis Healthcare Ltd. · ASX:REG

Regis Healthcare — FY2019 Earnings Presentation

31 slides from Regis Healthcare's earnings presentation, Aug 22, 2019

  1. Slide 1: Regis FY19 Results Presentation

    Regis Ferny Grove QLD 22 August 2019

  2. Slide 2: Contents

    Regis Birkdale •1• QLD CONTENTS 01 Business and financial highlights FY19 •4• 02 Portfolio overview and growth strategy • 10 • 03 Summary and outlook • 19 • 04 Appendices • 22 • 22 AUGUST 2019

  3. Slide 3: Resident Care and Services

    •2• RESIDENT CARE AND SERVICES Regis Healthcare is one of Australia’s leading aged care providers and delivers quality care, through more than 8,000 committed employees, including innovative ageing in place, residential, respite and dementia care to help residents live well.

  4. Slide 4: Business and financial highlights FY19

    Regis •3• Ferny Grove QLD 01 Business and financial highlights FY19

  5. Slide 5: Financial Highlights FY19

    •4• FINANCIAL HIGHLIGHTS FY19 Industry wide challenges continue to impact business Revenue Normalised1 EBITDA Normalised1 NPAT Net RAD $647.1m $111.4m $47.2m cashflow 9% higher than FY18 5% lower than FY18 Normalised1 Within guidance range $142.9m  Normalised1 FY19 EBITDA was lower than FY18 and re

  6. Slide 6: Key Operational Statistics

    •5• KEY OPERATIONAL STATISTICS Operations continued to perform well in the face of industry headwinds FY18 1H FY19 2H FY19 FY19 KEY OPERATIONAL STATISTICS1 Normalised2 Normalised2 Normalised2 Normalised2 Total operational places 6,753 7,142 7,078 No change in new places following the completion of t

  7. Slide 7: Earnings

    •6• EARNINGS EBITDA1 results affected by headwinds from cuts to residential aged care funding FY19 EBITDA was 5% lower than FY18.1 This  Steady state Facilities: reflects: ● Lower occupancy across the Industry impacted the Steady State portfolio, particularly in several of the older Facilities and

  8. Slide 8: Profit

    •7• PROFIT NPAT within guidance range and 17% lower than in FY18 Time-out FY19 NPAT was at the lower end of the full year guidance range of $47 to $51 million: at Regis Greenbank  FY19 EBITDA was broadly in line with guidance QLD  Interest and depreciation expenses have continued to increase as a

  9. Slide 9: Cashflow

    •8• CASHFLOW Net RAD cashflow of $142.9m was more than double the full year result for FY18  Net operating cashflow of $220.1m underpinned by:  Key investment activities included total capex on development, significant refurbishment and other ● Normalised EBITDA of $111.4m projects of $68.7m ● Net

  10. Slide 10: Resident Profile

    •9• RESIDENT PROFILE Profile of RAD / DAP mix and combination payments is consistent with prior periods  The number of incoming residents electing to pay a full PROFILE OF ACCOMMODATION PAYMENT TYPES RAD has remained steady at circa 57%-58% over the last FOR INCOMING RESIDENTS1 2 years, which incre

  11. Slide 11: Portfolio Overview and Growth Strategy

    Regis • 10 • Rosebud VIC 02 Portfolio Overview and Growth Strategy

  12. Slide 12: Portfolio Overview

    • 11 • PORTFOLIO OVERVIEW One of the largest providers of Residential Aged Care in Australia As at 30 June 2019 Total Total Number of Facilities 63 operational Total places 8,323 places Total operational places Total bedrooms 7,078 6,432 7,078 63 Facilities % operational places in single bedroom 85%

  13. Slide 13: Growth Strategy

    • 12 • GROWTH STRATEGY Disciplined balance sheet management with value enhancing growth opportunities focus FOCUS ON PERFORMANCE OF RAMP UP FACILITIES, QUALITY OF EXISTING PORTFOLIO AND CONTINUING TO DELIVER FURTHER GROWTH New Facilities •The development pipeline has delivered High quality Facilitie

  14. Slide 14: Portfolio Overview – Facilities Ramping Up

    • 13 • PORTFOLIO OVERVIEW – FACILITIES RAMPING UP The program delivered 1,247 new places by the end of FY19 1,200 139 120 Port 1,000 Nedlands, Coogee, WA 130 Elermore Vale, WA Woodlands, NSW New places 800 141 Lutwyche, WA QLD Burnside, SA 123 600 Chelmer, QLD 117 Kingswood, 400 SA 120 East Malvern,

  15. Slide 15: Asset Values

    • 14 • ASSET VALUES Potential to unlock further value EXISTING PORTFOLIO ASSET VALUE $m  Regis’ asset portfolio is one of the most significant and diversified in Australia As at 30 June 2014 $579  Current value is $1.291 billion New land and buildings – development program $487 (both ACF and RV’s)

  16. Slide 16: Growth Strategy – Aged Care Development Program

    • 15 • GROWTH STRATEGY – AGED CARE DEVELOPMENT PROGRAM Total new places Development program – greenfield developments and extensions 655 Total Net Provisional Expected First Club Land Development new additional Allocations / construction resident Services held approval Development places places Lice

  17. Slide 17: Growth Strategy – Retirement Living Developments

    • 16 • GROWTH STRATEGY – RETIREMENT LIVING DEVELOPMENTS Regis has the potential to unlock further value from its Retirement Living Assets  Regis has 588 Independent Living Units across 6 Retirement Villages (RVs), each of which is co-located with Aged Care Facilities (ACFs) Regis Blackburn  Experi

  18. Slide 18: Debt

    • 17 • DEBT As anticipated, debt has been reduced as a result of cashflow from RADs  The reduction in debt of $101m since the 30 June 2018 has been driven by increased RAD cashflow ($143m net RAD cashflow in FY19)  It is anticipated that a further $90m - $140m1 of net RAD cashflow will come from t

  19. Slide 19: Aged Care Industry Update

    • 18 • AGED CARE INDUSTRY UPDATE New Quality standards have been introduced, designed to more actively involve consumers ROYAL COMMISSION INTO QUALITY AND SAFETY CONTINUES  The Royal Commission’s interim report is expected to be provided by Regis Greenbank 31 October 2019 and its final report 30 Ap

  20. Slide 20: Summary and Outlook

    Regis • 19 • Yeronga QLD 03 Summary and Outlook

  21. Slide 21: FY19 Summary

    • 20 • FY19 SUMMARY Reflects growth from Facilities offset by Government funding cuts and occupancy headwinds FY19 PERFORMANCE  The $111.4m normalised EBITDA includes circa $10.8m of additional Government funding received in the 2H of FY19  The reduction in EBITDA reflected the usual increase in s

  22. Slide 22: Outlook

    • 21 • OUTLOOK FY20 NPAT is anticipated to be circa $38m from EBITDA of circa $105m As per previous guidance1, FY20 NPAT (normalised) is anticipated to be circa $38m:  FY20 normalised EBITDA is anticipated to be circa $105m  This reflects the increase in EBITDA in FY20 from the ramping up Faciliti

  23. Slide 23: Appendices

    Appendices lhealthcare

  24. Slide 24: Appendix A - Glossary

    • 23 • APPENDIX A - GLOSSARY Glossary Reported Agrees to or is derived from the results contained in Regis’ annual or half year statutory financial reports. Normalised results are categorised as non-IFRS financial information prepared in accordance w ith ASIC Regulatory Guide 230 – Disclosing non-IF

  25. Slide 25: Appendix B - Financials

    • 24 • APPENDIX B - FINANCIALS Income Variance FY2018 Statement ($ millions) FY2019 FY2018 Normalised to Normalised1 Normalised1 FY2019 Normalised Revenue Government revenue 452.3 416.3 9% Resident revenue 183.1 168.8 8% Other revenue 11.6 9.2 25% Revenue 647.1 594.4 9% Other Income 1.9 1.1 76% Less

  26. Slide 26: Appendix C - Financials

    • 25 • APPENDIX C - FINANCIALS Cash Flow FY2018 Statement ($ millions) FY2019 Normalised EBITDA Normalised1 111.4 117.1 Less: Normalisations 5.3 (3.9) EBITDA Reported 116.7 113.2 Change in net working capital 5.6 1.4 Non–cash items in EBITDA (9.2) (2.7) Net receipts from RADs and ILU entry contribut

  27. Slide 27: Appendix D - Financials

    • 26 • APPENDIX D - FINANCIALS Balance 30-Jun-2019 30-Jun-2018 (As at, $ millions) Reported Reported Sheet Cash and cash equivalents 0.0 7.8 Trade and other receivables 10.5 6.9 Other current assets 5.3 4.8 Income tax receivable 6.4 4.6 Total current assets 22.2 24.1 Property, plant and equipment 1,

  28. Slide 28: Appendix E - Financials

    • 27 • APPENDIX E - FINANCIALS Reported to Normalised Reconciliation – Full Year Ended 30 June 2018 Year ended 30 June 2018 ($ millions) Revenue EBITDA NPBT NPAT FY2018 Reported results 594.4 113.2 76.8 53.9 Acquisition related expenses (Pres Care) 3.9 3.9 3.0 FY2018 Normalised results 594.4 117.1 8

  29. Slide 29: Appendix F - Financials

    • 28 • APPENDIX F - FINANCIALS Reported to Normalised Reconciliation – Full Year Ended 30 June 2019 Year ended 30 June 2019 ($ millions) Revenue EBITDA NPBT NPAT FY2019 Reported results 647.1 116.7 69.6 50.9 Royal Commission costs 2.0 2.0 1.4 Non cash gain on retirement living sites 1 (7.3) (7.3) (5

  30. Slide 30: New Accounting Standard – AASB 16 Leases

    • 29 • NEW ACCOUNTING STANDARD – AASB 16 LEASES New accounting standard required in FY20 will have no net impact on NPAT  The Company is required to adopt AASB 16 Leases with effect from 1 July 2019.  Adoption of AASB 16 in FY20 will result in a gross up of Regis’ profit or loss, with no net impac

  31. Slide 31: Important Notice

    • 30 • IMPORTANT NOTICE This presentation contains general information about the activities of Regis Healthcare Limited (Regis) which is current as at 22 August 2019. It is in summary form and does not purport to be complete. It presents financial information on both a statutory basis (prepared in a

Regis Healthcare — FY2019 Earnings Presentation on 6ix