Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — FY2023 Earnings Presentation
38 slides from Ramsay Health Care's earnings presentation, Aug 24, 2023
Slide 1: FY23 Result Presentation
FY23 Result Presentation 12 months ended 30 June 2023 Speakers: • Managing Director and CEO - Craig McNally • Group Chief Financial Officer - Martyn Roberts People caring for people
Slide 2: Important Information
Important Information The information in this presentation is general background information about Forward-looking statements can generally be identified by the use of forward- Ramsay Health Care Limited and its subsidiaries (Ramsay Group) and their looking words such as “may”, “will”, “would”, “cou
Slide 3: Agenda
Agenda Key Themes 01 Key Themes Group FY23 Result Overview 02 Regional Highlights & Outlook 03 Group Financials 04 Strategic Direction & Group Outlook 05 Questions 06 05 3 People Caring for People - FY23 Results Briefing 12 Months Ended 30th June 2023
Slide 4: Key Themes
Key Themes EBIT increase of 14.6% driven by stronger growth from Australia, Asia and Ramsay UK partially offset by reductions in Ramsay Santé and Elysium. 8.8% increase in NPAT includes materially higher financing costs and higher effective tax rate Accelerating digital and operational transformatio
Slide 5: Group – FY23 Result Overview
GROUP – FY23 Result Overview Result reflects a strong improvement in Ramsay UK Revenue 11.6% to $15.3bn driven by materially higher volumes and improved productivity, and growth in Asia Pacific offsetting a lower result from Ramsay Santé and Elysium EBITDAR¹ 10.3% to $2.2bn The result benefited from
Slide 6: Australia – Highlights
AUSTRALIA – Highlights RESULT HIGHLIGHTS Australian results for the 12 months to 30th June A$’m • The operating environment gradually improved over the 12-month period albeit the rate 5,361 5,711 of growth has been slower and more inconsistent than anticipated • The result reflects growth in surgica
Slide 7: Australia - Business Trends
AUSTRALIA - Business Trends Increase in Admissions per work day (%) Surgical Admissions per work day vs Up 6% in June Up 13.5% in June FY22 and FY19 by Quarter 9 10 16.4% 7 7 6 2 9.7% 11.5% 8.8% 10.4% -2 10.7% 9.5% 6.9% 4.7% -9 -9 2.9% -17 Q1 Q2 Q3 Q4 Jul 23¹ Surgical Medical Psych Rehab Maternity S
Slide 8: Australia – Investment Pipeline
AUSTRALIA – Investment Pipeline FY23 INVESTMENT FY24 INVESTMENT PIPELINE • FY23 brownfield/greenfield capex $208m • FY24 capex on greenfield and brownfield development pipeline • Digital & data capex $11m expected to be ~$250-300m • Digital & data project operating expenses $27m • Northern Hospital
Slide 9: Australia - Transformation & Digital Enablement
AUSTRALIA - Transformation & Digital Enablement | game changing transformation to impact every part of the business Where do we Digital Creating a best-in-class, digitally enabled healthcare ecosystem want to be? Ambition ~9% ~45% ~9% ~9% 1. Integrated 2. Clinical 3. Effective data 4. Digitally enab
Slide 10: Australia – Outlook
AUSTRALIA – Outlook OUTLOOK • Australian earnings in FY24 are expected to improve on the back of mid single digit volume growth, productivity improvements coming from labour management and cost saving initiatives Northern Hospital in Epping, • Digital and operational transformation programs have bee
Slide 11: Ramsay Sime Darby – Highlights & Outlook
RAMSAY SIME DARBY – Highlights & Outlook RESULT HIGHLIGHTS Results for the twelve months to 30th June (MYR’m) • Ramsay's 50:50 Asian joint venture Ramsay Sime Darby (RSD) reported a 12.1% increase in revenue over the pcp (in local currency) for the twelve- 1,178 1,320 month period reflecting a highe
Slide 12: United Kingdom – Highlights & Outlook
UNITED KINGDOM – Highlights & Outlook RESULT HIGHLIGHTS Results for the 12 months to 30th June A$’m • Ramsay UK’s (the acute hospital business) result improved materially with EBIT ex non-recurring items increasing from negative $4.8m to positive $77.3m 1,941 • The result was driven by a 14.4% incre
Slide 13: Europe – Highlights & Outlook
EUROPE – Highlights & Outlook RESULT HIGHLIGHTS Results for the twelve months to 30th June A$’m • 8.8% growth in revenue reflects 4.4% increase in volumes and the contribution from acquisitions made in FY22 ($314m in total, $268m higher than pcp) 7,397 6,662 • Government revenue and government cost
Slide 14: Investing in our People
Investing in our People Priorities Example initiatives • Leadership • 170 leaders completed Ramsay Global executive leadership program CAPABILITY • 22 participants in Ramsay Global Corporate Graduate Programme • Disciplined transformation DEVELOPMENT • 200+ current and emerging leaders attended new
Slide 15: Healthier People, a Thriving Planet and Stronger Communities
Ramsay is driving action through 3 pillars: Healthier People, a Thriving Planet and Stronger Communities 70+ NPS in Europe, The Ramsay Way People & Culture 500+ people trained in Australia and UK Awards launched to Forum established for Mental Health First Aid. (Acute). recognise Australian Ramsay U
Slide 16: Group Financials
Group Financials Group Chief Financial Officer - Martyn Roberts People caring for people
Slide 17: FY23 – Group Performance
FY23 – Group Performance • The increase in revenue reflects improved activity across Total Revenue 12 mths ended EBITDAR¹ 12 mths ended 30 June $’m 30 June $’m all regions and the inclusion of Elysium, GHP and smaller 12% 2,208 10% 2,170 Nordics acquisitions for full 12mths (+$767m revenue and 1,974
Slide 18: Balance Sheet & Cashflow
Balance Sheet & Cashflow Balance Sheet Cashflow Statement A$'m 30/06/2023 31/12/2022 30/06/2022 Working capital (498.4) (169.4) (345.1) Year ended June A$'m 2023 2022 Chg (%) Property plant & equip 5,238.1 5,035.7 4,806.5 EBITDA including discontinued operations 2,022.1 1,830.2 10.5 Intangible asset
Slide 19: Funding Structure
Funding Structure Consolidated Group Funding Group¹ Ramsay Santé Consolidated Group Comprised of Ramsay Health Care Limited and all Paul Ramsay Public its subsidiaries Foundation Shareholders Consolidated Group FY23 Ramsay reports its financial results on a Consolidated Group basis, with financi
Slide 20: Leverage
Leverage Net Debt and Leverage Ratio – Leverage and Debt Metrics - Consolidated Group Funding Group¹ (AASB117) 3.5x 3.2x 3.3x 5.5 5.7x 5.6 6.0 5.5x 5.7x 2.4 2.6 2.7 4.8 3.5x 3.9x 5.1 3.6x 5.2 Jun-22 Dec-22 Jun-23 Jun-22 Dec-22 Jun-23 Funding Group Net Debt $'bn² Consolidated Capitalised Leases (AASB
Slide 21: Funding Group Debt Profile
Funding Group Debt Profile • $1bn of facilities maturing in 1HFY25 have been Ramsay Funding Group¹ Debt Maturity Profile $’m repaid since 30th June with new committed revolving bank loan facilities maturing in 1HFY26 • Process underway to extend tenor of each $500m tranche of the sustainability link
Slide 22: Capital Expenditure
Capital Expenditure Capital Expenditure by Region (A$’m) Group Capital Expenditure by Region (%) Group Capital Expenditure by Type (A$’m) 890-1,020 43% 325 346 733 772 400-450 360-400 43% 307 332 130-170 334 329 93 111 46 Australia UK Ramsay Sante Total 14% 55 Routine & Compliance Growth FY22 FY23 F
Slide 23: Strategy & Outlook
Strategy & Outlook Managing Director & CEO – Craig McNally People caring for people
Slide 24: Investment in our strategy will continue, priorities will change
Investment in our strategy will continue, priorities will change as the environment evolves 24
Slide 25: Group Outlook
Group Outlook Ramsay is uniquely positioned to win share and benefit from the growing demand for healthcare services underpinned by changes in demographics, clinical and technological advancements and high demand for healthcare services requiring governments and the private sector to work more close
Slide 26: FY24 - Outlook
FY24 - Outlook Ramsay expects further growth in earnings in FY24 driven by: • Mid single digit top line growth driven by low to mid single digit growth in activity and higher reimbursement levels • Margin recovery will be slowed by ongoing inflationary pressures across most costs which are not fully
Slide 27: Questions
Questions
Slide 28: ASX Announcement: FY23 Results Presentation Speech
ASX ANNOUNCEMENT 24th August 2023 Ramsay Health Care FY23 Results - Presentation Speech Slide 1 Front Cover Good morning, everyone and thank you for joining us for our FY23 results presentation webcast. I am joined by Martyn Roberts our Group Chief Financial Officer. Slide 2 - Disclaimer for noting
Slide 29: Speech: FY24 expectations and Group result overview
In FY24 we expect mid to high single digit top line growth; Transformation initiatives in place will drive margin improvement over time, albeit in FY24 margin recovery will be slowed by inflationary cost pressures, increased investment in digital and data and higher funding costs. We are focused on
Slide 30: Speech: Australia trends in admissions
I would just like to reiterate that to address the issues impacting the business at the current time we have accelerated our business transformation programs and this is our immediate priority. Slide 7 Australia - Trends in Admissions Just looking at key trends in activity. Surgical volume growth re
Slide 31: Speech: Digital and data transformation
will obviously be trying to accelerate this timetable where possible. Capex associated with current projects is also expected to peak in FY25/26 at between $70-80m. Slide 9 – Digital and Data Transformation A number of large projects are already underway, while additional key projects are scheduled
Slide 32: Speech: Australia margins and Ramsay Sime Darby
There are factors that will slow margin improvement including higher digital and data opex, the ongoing impact of inflation on costs in particular labour costs and the higher state taxes and levies I have just mentioned. Slide 11 Ramsay Sime Darby Highlights and Outlook Capping off the Asia Pacific
Slide 33: Speech: UK and Elysium outlook
Ramsay UK is expecting mid to high single digit volume growth in FY24 driven again by both NHS volumes as well as private pay that continues to grow as a segment of the market. The new hospital at Kettering, Glendon Wood, has opened in the last few weeks which is also expected to contribute to top l
Slide 34: Speech: Europe outlook
The French Government has extended the revenue guarantee to 31st December 2023 with the safety net structure now reduced to 70% of any shortfall experienced reflecting the decline in COVID cases in the community. The Nordics will be focused on the integration of recent acquisitions, the continued de
Slide 35: Speech: Sustainability and Group performance
We know we can’t reach our targets alone and this year we have achieved our goal of getting at least 40% of our suppliers to complete sustainability assessments and we are on track to reach our 2026 target of 80% of suppliers. I will now hand you over to Martyn to run through the financials in more
Slide 36: Speech: Cashflow, balance sheet and funding
Slide 18 – Cashflow and Balance Sheet Operating cashflow increased 79% on the prior year reflecting an improvement in the operating environment and the change in working capital as Ramsay Sante converted French Government receivables under the revenue guarantee scheme to cash. Cashflow includes rece
Slide 37: Speech: Debt refinancing and capital expenditure
Over the next six months we will commence a process to extend the tenor of each of the $500m tranche of the sustainability linked loan maturing in 1HFY25, 1HFY26 and 1HFY27 by a further 2 years each. Facilities considered surplus to requirements will be terminated upon completion of refinancing acti
Slide 38: Speech: Margin recovery and FY24 outlook
As we saw in FY23, margin recovery will be slowed by ongoing cost pressures that are not fully reflected in reimbursement structures, combined with an increase in digital and data opex investment which is an important plank for our future growth. In the short term our focus will be on improving the