Spire Healthcare Group Plc · LSE:SPI
Spire Healthcare — FY2015 Earnings Presentation
32 slides from Spire Healthcare's earnings presentation, March 2016
Slide 1: 2015 Financial Year Results Presentation
2015 Financial Year Results Presentation www.spirehealthcare.com
Slide 2: Disclaimer
Disclaimer Important information: forward-looking statements These materials contain certain forward-looking statements relating to the business of Spire Healthcare Group plc (the “Company”) and its subsidiaries (collectively, the “Group”), including with respect to the progress, timing and completi
Slide 3: Agenda
Agenda 1 Introduction Garry Watts, Chairman 2 Financial Review Simon Gordon, CFO 3 Strategy Update Rob Roger, CEO 3 www.spirehealthcare.com
Slide 4: Financial Year 2015 – highlights
Introductio Financial Year 2015 – n highlights Successful first full year as a public company with high level of investor engagement and a well spread shareholder base New reference shareholder in Mediclinic – the relationship is bearing fruit in shared best practice and experience Broad based
Slide 5: Senior management team
Introductio n Senior management team During 2015 Spire significantly strengthened its senior management below Board level Name Position Andrew White Chief Operating Officer Peter Corfield Commercial Director Jean Jacques de Group Medical Director Gorter Neil McCullough Business Development Director
Slide 6: Financial Review
Financial Review 2 Simon Gordon, CFO 6 www.spirehealthcare.com
Slide 7: Financial Year 2015 - trading headlines
Financial Financial Year 2015 - Review trading headlines Solid delivery in line with updated guidance Revenue at £884.8m - in line with updated guidance of between £882m - £888m – Revenue growth of 3.4% overall with growth across all payor categories – Revenue growth rates 2015 H1 and H2 impacted
Slide 8: Financial highlights - Revenues
Financial Review Financial highlights - Revenues 2015 2014 Growth £m £m % Group revenue 884.8 856.0 3.4% Acquisitions and disposals (37.4) (29.4) Underlying revenue 847.4 826.6 2.5% 2015 revenue 2014 revenue 3.6% mix 3.7% mix 17.7% 17.1% 49.1% 50.5% 29.6 28.7 % % PMI NHS SP Other PMI NHS SP Other 8
Slide 9: Financial highlights - EBITDA
Financial Review Financial highlights - EBITDA 2015 2014 Growth % £m £m Group EBITDA 160.1 159.2 0.6% PLC costs and rent - (2.5) Adjusted EBITDA 160.1 156.7 2.2% 2015 2014 Growth Adjusted EBITDA margin 18.1% 18.3% (0.2%) 9 www.spirehealthcare.com
Slide 10: Revenue and admissions growth
Financial Revenue and Review admissions growth Revenues 2015 2014 Growth Excl. £m £m % acqn/disp growth % PMI 434.8 432.4 0.6% (1.1%) Self pay 156.2 146.1 6.9% 6.6% NHS 262.0 245.9 6.5% 6.7% Other 31.8 31.6 0.6% 0.3% Total revenues 884.8 856.0 3.4% 2.5% Admissions ’000s 2015 2014 Growth Excl. % acqn
Slide 11: NHS revenues analysis
Financial Review NHS revenues analysis Revenues 2015 2014 Growth £m £m % Choose and book 202.7 181.4 11.7% NHS local 59.3 64.5 (8.1%) NHS total revenues 262.0 245.9 6.5% Revenue growth rate H1 H2 2015 % % Total % Choose and book 12.0% 11.5% 11.7% NHS local 28.9% (36.4%) (8.1%) NHS total revenues 16.
Slide 12: Revenue bridge by payor
Financial Review Revenue bridge by payor Payor 2014 Rate Volume OPD 2015 £m £m £m £m £m PMI 416.9 (0.7) 0.7 (4.7) 412.2 Self pay 140.1 1.0 6.2 2.1 149.4 NHS 238.8 (1.2) 11.2 6.1 254.9 Totals (Group revenue excl. 795.8 (0.9) 18.1 3.5 816.5 acquisitions/disposals and other) Day case % admissions 2014
Slide 13: Trading margin analysis
Financial Review Trading margin analysis Costs as % revenues 2015 Group 2014 Group % % Clinical staff costs 18.9% 17.6% NHS fees 5.9% 5.7% Other direct costs 27.2% 27.7% Cost of sales 52.0% 51.0% NHS fees, % NHS revenues 19.8% 19.8% Costs as % revenues 2015 Group 2014 Group % % Gross margin 48.0% 49
Slide 14: H1 and H2 sub-analysis for 2015
Financial Review H1 and H2 sub-analysis for 2015 Revenues and EBITDA 2015 2015 2015 H1 H2 Full Year Revenue growth 7.8% (0.9%) 3.4% Revenue growth excl. 3.3% 3.5% 3.4% acquisitions, disposals and NHS local revenues Adjusted EBITDA growth 8.0% (3.5%) 2.2% Adjusted EBITDA margin 2015 2015 2015 H1 H2 F
Slide 15: Comparable EPS performance
Financial Review Comparable EPS performance 2015 2014 Growth £m £m % Profit before taxation 73.6 (7.0) reported Pro forma adjustments: Exceptional items 15.7 54.0 Profit on sale of leasehold - (18.5) interest PLC costs and rent - (2.5) Finance costs alignment - 65.2 Taxation on adjusted results (16.
Slide 16: Cash flow & net debt for the period
Financial Cash flow & net Review debt for the period 2015 2014 £m £m Operating cash flow before exceptional 159.8 164.2 items Exceptional items (4.5) (51.2) Net cash used in investing activities (109.6) (70.0) Net cash used in financing activities (41.3) (80.0) Net increase / (decrease) in cash 4.4
Slide 17: Outlook & guidance for Financial Year 2016
Financial Outlook & guidance for Review Financial Year 2016 2016 revenue growth between 3-5% converted at EBITDA margin constant to 2015 Low single digit revenue growth underpinned by investment in capacity, pricing PMI positive PMI market expected to be stable High single digit revenue growth
Slide 18: Outlook & guidance for Financial Year 2016
Financial Outlook & guidance for Review Financial Year 2016 2016 revenue growth between 3-5% converted at EBITDA margin constant to 2015 Excepti Expected £3-5m arising from pre-opening losses in Manchester and Nottingham on-al Continuing cost rationalisation initiatives across the business items
Slide 19: Strategy Update
Strategy Update 3 Rob Roger, CEO 19 www.spirehealthcare.com
Slide 20: Spire today: our assets and services
Strategy Update Spire today Our assets and services Extensive & well invested network – 38 hospitals (full service), with 121 theatres and 2000+ beds – 12 clinics and 2 specialist cancer centres Strong culture of clinical governance & excellence Diversity of service offering between orthopaedi
Slide 21: Spire today: our people
Strategy Update Spire today Our people Patients: In 2015 we treated 760k patients of which 270k were IP/DC cases (2014: 260k) – Spire did 7.8% of all UK hip & 8.6% of all UK knee replacement procedures in last 12 months Patients: Nearly 2 million IP/DC cases since 2007 Staff: Over 12,400 colle
Slide 22: Revenue and EBITDAR growth
2015 continued our record of Strategy Revenue and EBITDAR Update growth….. Revenue (£m) EBITDAR (£m) (2009-15) (2009-15) 885 856 +6.1% CAGR +6.2% CAGR 220 765 205 209 739 189 222 674 620 643 171 155 2009 2010 2011 2012 2013 2014 2015 2009 2010 2011 2012 2013 2014 2015 Attractive top line growth prof
Slide 23: Revenue growth across all payor groups
….and also of Revenue Strategy growth across all payor Update groups £m 403 416 414 432 435 372 378 +2.7% PMI CAGR (2009-15) 2009 2010 2011 2012 2013 2014 2015 £m 156 146 121 133 96 110 +9.9% 89 Self-Pay CAGR (2009-15) 2009 2010 2011 2012 2013 2014 2015 £m 246 262 175 191 139 147 136 +11.2% NHS CAGR
Slide 24: The Spire proposition - more valid than ever
The Spire Strategy proposition - more Update valid than ever The need for UK healthcare services to be provided Demand by the independent sector will inevitably lead to significant growth in demand Spire has a clear and focused plan to grow its Payors business from each of its three key payor
Slide 25: Update on the NHS Funding Gap
Strategy Update on the “NHS Update Funding Gap” The NHS is struggling to find the required £22 billion of cost savings and efficiencies Between 2013-14 & 2014-15 NHS productivity actually fell by 1% - while the aggregate NHS deficit for the year to 31st March 2016 is forecast to be £2.8 billion
Slide 26: Impact on waiting lists
Strategy Update Impact on waiting lists Overall NHS waiting list at Jan 2016 is over 3.5 million – 12% (367k patients) higher than Jan 2015 In both Dec 2015 and Jan 2016 the 92% target (of treatment within 18 weeks) was missed – The highest number of patients ever – 263k - waited more than 18 week
Slide 27: Payors – PMI
Strategy Update Payors – PMI Despite the UK’s low level of PMI coverage, the attractions of health cover to employers & employees are evident when the NHS is rationing procedures & extending waiting lists UK employment numbers have continued to climb to their current record high - a large proporti
Slide 28: Payors – Self-pay
Strategy Update Payors – Self-pay Because of NHS rationing/waiting lists or a decision to “self-insure”, people are increasingly choosing to pay for their own treatment – which we are seeing in our Self-pay growth rates Spire self-pay demographics Waiting lists vs UK population – 25% of over 50s w
Slide 29: Payors – NHS
Strategy Update Payors – NHS Strong growth in our NHS business will continue in the medium term, with a greater proportion coming from E-referral rather than Local Contract work (82% vs 18% in H2 2015) Split of Spire's NHS work (by revenue) E-referral work ( aka “Choose & Book”) will continue to 1
Slide 30: Capacity growth to meet increasing demand and take market share
Capacity growth to meet Strategy increasing demand and take Update market share Spire’s robust development programme (capital expenditures 2016: £170m to £190m) provides multiple drivers for strong Revenue and EBITDA growth, underpinned by private activity New theatres St. Anthony’s New hospitals Ca
Slide 31: Despite an unpredictable 2015, Spire's future is bright
Summary Despite an unpredictable 2015, Spire’s future is bright Spire is uniquely positioned to FY2016 will be a year of capture a growing share of a rapidly continued solid growth with Spire expanding UK private healthcare market expected to return to historical levels of sales growth in H2 2016
Slide 32: 2015 Financial Year Results Presentation
2015 Financial Year Results Presentation www.spirehealthcare.com
Spire Healthcare Group — FY2015 Earnings Presentation on 6ix