Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — FY2004 Earnings Presentation
26 slides from Ramsay Health Care's earnings presentation, Aug 25, 2004
Slide 1: Results Briefing for the year ended 30 June 2004
ne ms RAMSAY HEALTH CARE Results Briefing for the year ended 30 June 2004 25 August 2004
Slide 2: Ramsay Overview
. RAMSAY Overview ALYH CARE » Core net profit up 13%, building on strong profit growth of previous 3 years a» Delivered on forecast core profit growth of over 10% a Effective cost management results in EBIT & EBITA margins holding at 10% a» Organic profit growth continues, at least 5% » Expansion pr
Slide 3: Financial Highlights
Financial Highlights Core NPAT (before non-recurring items and amortisation of goodwill) up 13% to $42.7m NPAT $38.4m after non-recurring charges of $3.7m (net of tax) Group revenue up 16% to $768.1m Group EBITA up 16% to $77.6m Both EBIT & EBITA margins remain at 10% Core EPS of 33.1 cps, up 13% Fi
Slide 4: Financial Performance
Financial Performance Operating Revenue 662.2 16% EBITDA 91.0 16% EBITA 67.0 16% Net Profit before tax 53.5 15% Net Profit After Tax 37.1 14% Core Net Profit After Tax 37.7 13% ® Notes s Before non-recurring items and amortisation of goodwill s Non-recurring items (net of tax) comprise > Mayne bid c
Slide 5: Financial Performance (cont)
RAM GAY Financial Performance (cont) - HEALTH CARE Core EPS () 29.3 ¢ 33.1 ¢ 13% Full year dividend — fully franked 15.5 ¢ 17.5 ¢ 13% ) Notes * Before non-recurring items and amortisation of goodwill " Reported EPS 28.9 ¢ 29.8 ¢
Slide 6: 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 7: Core Net Profit
Core Net Profit $m 457 42.7 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004
Slide 8: Core Earnings per Share
RAMSAY HEALTH CARE Core Earnings per Share 33.1 357 307 257 207 Cents per Share FY 2000 Fy 2001 FY 2002 FY 2003 FY 2004
Slide 9: Increased Dividend
Increased Dividend 20.0 17.5 18.0 15.5 16.0 g 14.0 11.0 § 12.0 i“ @ 10.0 . a 7.4 85 2 8.0 Fi uo 6.0 4.0 : > S| 0.0 Fy 2000* Fy 2001* FY 2002* FY 2003** FY 2004** O Final 4.4 5.0 6.5 9.0 10.0 @ Interim 3.0 3.5 4.5 6.5 7.5 Total 7.4 8.5 11.0 15.5 17.5 Notes * Unfranked ** Fully Franked
Slide 10: EBITA Growth
EBITA Growth $M g0- 70- 60- 50- 404 30- 207 77.6 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004
Slide 11: Breakdown of Group EBITA Growth
RAMSAY Breakdown of Group EBITA Growth HEALTH CARE EBITA up 16% over 2003 @ Organic Growth - 6% & Growth from Expanded Capacity - 7% Growth from Acquisitions - 3%
Slide 12: Margins Maintained
RAMSAY ALYH CARE Margins Maintained » EBITDA margin 14% for the year » EBIT margin 10% for the year a» EBIT margin 10.1% excluding Silver Circle » Benchmark hospital portfolio expected to be margin dilutive due to high proportion of leased facilities
Slide 13: Cash Flow
RAB Gay Cash Flow HEALTH CARE EBITDA/Cash Flow $m 120 100 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 @ EBITDA before non-recurring items 0 Cash Flow = EBITDA translates into strong gross operating cash flow. = Continuing effective cash flow management
Slide 14: Financial Indicators
Financial Indicators ROIC (EBIT/Funds Employed) % 10.4 14.9 14.3 15.2 ROE (NPAT/Shareholder Funds)% 8.0 13.9 14.6 15.5 Notes: a) Cairns excluded — acquired in Nov’02 (» Calculated before non-recurring items
Slide 15: Occupancy - Patient Days
RAB Gay Occupancy — Patient Days HEALTH CARE 900 7. 800 700 Zo 600 500 — 400 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 —@ Inpatient —t-T otal (Inpatient & Day Patients) a Total admissions up 11% over previous year m Excluding extra capacity, admissions up 5%
Slide 16: Growth Strategy
Growth Strategy Effective micro-management underpins annual organic growth of at least 5% Invest in existing business - benefits of expansion program to further flow through to 2005 earnings > Lake Macquarie expansion ramp up > Greenslopes expansion benefits to continue > Mt Wilga Actively seek acqu
Slide 17: Benchmark Hospital Group
RAMSAY HEALTH CARE Benchmark Hospital Group » Benchmark Hospital Group > Well-run portfolio of 10 hospitals located in Victoria and South Australia > 980 hospital beds, with 71 additional beds coming on stream in 2005 > 68 aged care beds » Operational update > Confident purchase will meet our expect
Slide 18: Benchmark Hospital Group (cont)
HY ramsay benchmark Hospital Group (cont) ALYH CARE » Strategically significant acquisition for Ramsay Health Care > Increases market share in Victoria and South Australia, provides opportunity to make bolt-on acquisitions in those states >» Strengthens position with private health funds > Ability t
Slide 19: Aged Care
RAMSAY Aged Care HEALTH CARE » Long-term strategy based on acquisitions & greenfield development » Acquisition opportunities > Inflated price expectations >» Looking at groups, as well as individual facilities > Identify facilities well placed in a competitive market and where value can be added » G
Slide 20: Outlook - Guidance
, RAMSAY Outlook - Guidance ALTER CARE » Targeting at least 10% growth in core net profit, based on: > Strategically positioned, quality facilities - admission growth > Efficient hospital management - EBIT margin, ROI/ROE >» Focus on cost containment, leveraging market position > Annual organic grow
Slide 21: Outlook - Acquisitions
_ - sg RAMSAY Outlook - Acquisitions ALYH CARE » Profit growth target does not include the benefits of further acquisitions » RHC continues to pursue strategic acquisitions > Hospitals (bolt-ons in South Australia & Victoria) >» Other opportunities >» Aged Care
Slide 22: Appendix
ne ms RAMSAY HEALTH CARE Appendix
Slide 23: Diversified Income Stream pre Benchmark
Diversified Income Stream pre Benchmark HEALTH Cd Revenue by Division Revenue by State Revenue by Payor Source @ Psychiatric NSW 0 Health Funds Co-located 0 Victoria @ Rehabiliation . O Government © South Australia m Med/Surg . land @ Veteran © Aged Care Queenslan B@ Veteran @ West Australia @ Other
Slide 24: Diversified Income Stream including Benchmark
HEA RAMSAY LTR CARE. Diversified Income Stream including Benchmark Revenue by Division Revenue by State Revenue by Payor Source @ Psychiatric O Co-located @ Rehabiliation @ Med/Surg @ Aged Care B Veteran NSW O Victoria © South Australia @ Queensland @ West Australia DB Health Funds O Government @ Ve
Slide 25: Facility Portfolio
Facility Portfolio Number Li 4 Operating Divisions of ee Facilities () Veteran 2 983 Co-located 3 379 Regional Medical/Surgical 17 1,742 Psychiatric 8 541 Rehabilitation 4 231 Aged Care i 68 Totals 35 3,944 Notes a) facluding Benchmark Hospital Group acquired 1 July 2004
Slide 26: Ramsay Health Care
ne ms RAMSAY | HEALTH CARE