Oceania Healthcare Ltd. · NZX:OCA
Oceania Healthcare — HY25 Earnings Presentation
50 slides from Oceania Healthcare's earnings presentation, November 2024
Slide 1: Believe in better. Results Presentation HY25
Believe in better. RESULTS PRESENTATION FOR THE INTERIM PERIOD ENDED HY25
Slide 2: Impressions from the CEO
Impressions from the CEO Suzanne Dvorak appointed as CEO in July 2024, having previously led Bupa Australia and Levande. Oceania must continue to sell down unsold stock, and reduce leverage • Recognised for clinical excellence, a market leader of integrated villages, with a full continuum of care •
Slide 3: Key messages
Key messages Focus on execution, with clear goals for the remainder of FY25. • Underlying earnings and operational cashflow growth: driven by an increase in new ORA receipts • Portfolio rebalancing continues: through development and divestment with a focus on modernising and moving the portfolio tow
Slide 4: Financial summary
Financial summary We have continued to deliver to strategy with favourable results for the 6 months to 30 September 2024. Delivering to strategy Underlying EBITDA1 ORA Receipts Operating Cashflow $38.6m $168.1m $70.4m Increase of Increase of Increase of 2.7% 59.8% 23.1% from $37.6m in HY24 from $105
Slide 5: Operational summary
Operational summary HY25 was focused on creating alignment with strategy for future growth. 106 care suites delivered in HY25 224 units and care suites on track to be delivered during FY25 4 care sites divested and 1 closed site under contract All banking covenants and requirements met Climate Relat
Slide 6: Business overview
Business overview 5
Slide 7: What has been achieved over the last five years
What has been achieved over the last five years Substantial growth in assets and clear repositioning of our offering towards a full continuum of care. Substantial growth in total assets Clear transition of portfolio $2,821m 1029 1940 1118 Village Care Care Beds Beds 27% 32% 46% HY20 51% HY25 $1,497m
Slide 8: What has changed over the last five years
What has changed over the last five years Oceania continues to modernise its portfolio through divestment of older care assets and expansion of its development capabilities. HY20 HY25 Change Comment Development 100 units 106 units 6.0% Cumulative 771 care and 717 ILU units over the last 5 years Dive
Slide 9: What we have achieved – our residents
What we have achieved – our residents Oceania has been innovative in care, expanding the care offering, and centering objectives around resident welfare. Resident Centred Approach Resident wellbeing and care is the heart of Oceania Expansion of care to a continuum of Care A whole Personalised Develo
Slide 10: Sales update
Sales update Both new sales and resales have increased on 2HY24, driven by robust care suite volumes. Focus on sales expansion Sales volumes HY24 2HY24 HY25 Resales across ILU and care suites continue to perform 153 161 due to the reputational strength of our mature villages 36 116 105 51 102 97 42
Slide 11: The Helier
The Helier We maintain our belief in the product offering, but a revised sales and marketing strategy is required. Moving Forward with The Helier Premium care offering • The Helier is one of Oceania’s newest builds and a key pillar in Oceania’s property portfolio • Key development: The Helier is Oce
Slide 12: Stock update
Stock update Sell down of existing stock is a key focus for Oceania. Key stock movements in HY25 Our development stock will be used to repay development debt • Stock levels decreased $48m (13%) to $305m $51m $88m $63m • Completion of 106 new care suites at Elmwood, reflected in September 20241 posit
Slide 13: Development completed in HY25
Development completed in HY25 106 care suites completed at Elmwood, located in Manurewa, Auckland. The opening of the new care development at Elmwood allows for future development of the existing site into villas or apartments. Elmwood c.$55m Manurewa, Auckland 106 Care Suites completed in Sep-24 bu
Slide 14: Developments under construction in FY25
Developments under construction in FY25 FY25 sees completion of all high density developments under construction before commencing new villa products at Franklin. The dementia bed development at Meadowbank concludes the sixth and final stage of a key Central Auckland integrated development. Awatere
Slide 15: Franklin development
Franklin development Near term transition from apartment to villa product development deliveries will improve sell down periods and the ability to recycle capital. Key Highlights • Franklin, will be Oceania’s flagship villa product, expanding on the modernisation of our portfolio and our quality liv
Slide 16: Divestment programme
Divestment programme Over the course of HY25, four divestments have settled for an aggregate proceeds of ~$25m. Progress since March 23: HY25 (c.$25m of proceeds) ~$45m from divestment programme (past 18 months) 7 assets Victoria Place Takanini Holmwood Middlepark sold FY24 (c.$20m of proceeds) 1 as
Slide 17: Portfolio management
Portfolio management We are rebalancing the mix of care and retirement as well as a focus on quality sites as part of the modernisation of the portfolio. Summary Portfolio Movements 4,382 (91) (54) • The total number of beds reduced from 4,382 at FY24 (46) (51) 118 4,242 (16) to 4,124 as we continue
Slide 18: Remaining for FY25
Remaining for FY25 As we progress through the year, we have some clear objectives for the business. Priorities Focus for FY25 Current Performance HY25 • Increase new sales • 89 new sales (38 ILU and 51 care) Sales • Reduce stock levels • Total sales volumes up 17% on 2HY24 • Accelerate sales at The
Slide 19: Focus on execution
Focus on execution We need to deliver on our promise to our residents, our investors and our people. Deliver on Our Promise: The fundamentals of our model are strong. We know what needs to be done and are focused on execution Improve Sales and Reduce Debt: Sales cadence needs to be improved with a f
Slide 20: Financial
Financial 19
Slide 21: Profit and loss
Profit and loss Total operating revenue of $132.6m in HY25 increased from $131.6m in HY24 despite the impact of divestments. NZDm HY25 HY24 Operating revenue 132.6 131.6 Operating expenses (133.5) (126.5) • Operating Revenue has increased 1% from $131.6m to $132.6m in HY25 Change in fair value of IP
Slide 22: Trading results
Trading results Underlying NPAT and EBITDA1 remain solid, driven by a 34.9% increase in capital gains. Premium care revenue is up 12.3%, and care expenses have decreased from HY24. Village capital gains are strong while care costs reduce Village • In aggregate, sales volumes grew 1.2%, driven by rob
Slide 23: Our care business
Our care business An increase in premium revenue streams has enabled us to maintain care EBITDA margins despite lack of industry funding. Adjusted earnings per bed continue to grow as a result of modernisation and portfolio rebalancing Care occupancy 90.3% 92.2% 92.0% 93.0% 91.6% 94.0% • Annualised
Slide 24: Care Business
Care Business Total aged care related Underlying EBITDA1 per bed has gone up from $17.1k to $20.2k in HY25. Our care earnings per bed continue to grow demonstrating the success of our care strategy and the growing demand for the care suite product. NZDm HY25 HY24 Daily care fees 86.2 88.4 • Increase
Slide 25: Our retirement village
Our retirement village Total sales have increased on HY24, despite operating in a slower residential property market. Sales volumes Average sales prices (new sales) NZD000s 1,119 1,088 HY24 2HY24 HY25 867 153 161 36 116 51 599 600 102 105 97 42 361 386 358 47 32 38 117 110 55 74 73 59 HY24 2HY24 HY2
Slide 26: Retirement village business
Retirement village business Total sales volumes of 258 in HY25, marginally higher than total HY24 of 255. NZDm HY25 HY24 Villa and Apartment DMF 20.7 19.5 Retirement village service fees 5.3 4.8 • Village EBITDA has increased 19% driven by growth Other revenue2 1.6 4.6 in capital gains compared to P
Slide 27: Cash flow
Cash flow Cash flow from operating activities increased by 23.1%, $70.4m in HY25 compared to $57.2m for HY24. Restated NZDm HY25 HY24 Receipts from residents for village and care fees 106.0 107.4 • Cashflows from operating activities has increased Payments to suppliers and employees (129.4) (112.2)
Slide 28: Future cash recycling
Future cash recycling Oceania’s debt is primarily development related, supported by current and future new sales stock, providing a clear path to debt repayment. Development debt to underlying development assets (NZDm)1 Our development stock will be used to repay development debt $51m 580.7 $88m $63
Slide 29: Balance sheet
Balance sheet There has been an increase in Total Asset Growth from FY24 to HY25 of 1.4%. NZ$m HY25 FY24 Assets • All financial banking covenants met Cash and trade receivables 96.8 132.3 Property assets 2,705.4 2,586.3 • Gearing has decreased in HY25 to 37.5%, for the Other assets 19.0 63.7 first t
Slide 30: Balance Sheet Management
Balance Sheet Management Oceania holds sufficient headroom in its $725m of debt facilities, to be used for future developments and land acquisitions, and complies with all banking covenants. Debt facilities Facility limit Drawn amount Headroom (as at 30 Sep 24) Interest coverage Cost of debt General
Slide 31: Sustainability
Sustainability 30
Slide 32: Sustainability and Climate
Sustainability and Climate Sustainability underpins Oceania’s strategic pillars, and we are committed to integrating thinking across the business. E S Environment Social Energy decarbonisation projects in Three key nationwide community progress to meet Scope 1 and Scope partnerships established 2 em
Slide 33: Summary
Summary 32
Slide 34: Summary
Summary Focus on execution, with clear goals for the remainder of FY25. • Improve sales cadence of current stock • Portfolio rebalancing continues • We have clear objectives for the remainder of FY25 • Focus on execution with new executive team • The Board has decided to continue to pause dividends
Slide 35: Appendices
01 Underlying earnings 02 Income Statement 03 Proforma group underlying earnings 04 Cash flow 05 Resales cash flow and capital expenditure 06 Embedded value and affordability 07 Balance sheet 08 Portfolio summary 09 Future development outlook 10 Development pipeline Appendices 11 12 13 Reconciliatio
Slide 36: Underlying earnings
01 Underlying earnings Underlying EBITDA of $38.6m for the 12 month period ended 30 Sept 2024, 2.7% increase on HY24. Reconciliation of underlying adjustments Segmental underlying adjustments NZDm HY25 HY24 Var FY24 NZDm HY25 HY24 Var FY24 Reported Net profit after tax (17.1) 35.2 (52.2) 31.5 Aged C
Slide 37: Income statement
02 Income statement Key valuation assumptions remained largely consistent from FY24 except for moderate increases applied to incoming prices. Summary of income statement Key IP and PP&E CBRE valuation assumption changes NZDm HY25 HY24 Var FY24 Drivers HY25 FY24 Operating revenue 132.6 131.6 1.0 265.
Slide 38: Proforma group underlying earnings
03 Proforma group underlying earnings Proforma group underlying earnings for HY25 of $39.1m. Adjustments include normalising for the impact of divesting, closing and exiting several sites from our ongoing operations. In the last 18 months to 30 September 2025 several sites have been exited, closed a
Slide 39: Cash flow
04 Cash flow Operating cash flow of $70.4m for the six months to HY25 compared to $57.2m in relation to HY24. Statement of cash flows Net cashflows from operating activities NZDm HY25 HY24 Var FY24 NZDm Receipts from residents for village and care fees 106.0 107.4 (1.4) 207.9 Payments to suppliers a
Slide 40: Reconciliation of resales cash flow and capital expenditure
05 Reconciliation of resales cash flow and capital expenditure Growth in resales cash flows as Oceania’s portfolio matures and resells at higher price points. Reconciliation of resales cash flow Breakdown of Capital Expenditure Restated NZDm HY25 HY24 NZDm HY25 HY24 Acquisitions - 22.3 Receipts from
Slide 41: CBRE embedded value and affordability ratio
06 CBRE embedded value and affordability ratio The embedded value in our portfolio has increased 14.9% since HY24 to $551.6m as at HY25 and will underpin the future realisation of cash flows from deferred management fees and resale gains. Embedded Value NZDm 600 551.6 3,000 • Embedded value in Ocean
Slide 42: Balance sheet
07 Balance sheet Total assets increased by $38.9m from 31 March 2024. Oceania’s net adjusted value is $1.42 per share as at 30 September 2024. Balance sheet Net adjusted value (“NAV”) NZDm HY25 FY24 NZDm HY25 FY24 Assets Property, plant and equipment (including WIP) 809.4 770.9 Cash and trade receiv
Slide 43: Portfolio summary
08 Portfolio summary As at 30 September 2024. Site Region Care beds Care suites Village units Total Site Region Care beds Care suites Village units Total NORTH ISLAND SOUTH ISLAND Bream Bay Ruakaka - - 83 83 Marina Cove Picton - - 26 26 Totara Park Rodney - - 30 30 Green Gables Nelson - 61 40 101 Th
Slide 44: Future development outlook
09 Future development outlook 66% of our existing portfolio is now premium units and care suites as we progress to ~75% premium / ~25% standard at the end of our current pipeline. Current & future portfolio composition1 Existing portfolio 1,118 Care beds Care suites ILUs Total 1,915 Care 1,420 ILU B
Slide 45: Development pipeline
10 Development pipeline Status as at 30 September 2024. Sites Stage Status ILUs Care suites Gross units Net units Notes Meadowbank Stage 6 Under Construction - 40 40 40 Scheduled for completion FY26 Awatere (formerly Trevellyn) Stage 3 Under Construction 68 - 68 68 Scheduled for completion FY25 Wate
Slide 46: Reconciliation of portfolio movements
11 Reconciliation of portfolio movements Changes Conversion Conversion Changes in Changes in As at in existing of beds to of units to New units pipeline – gross pipeline – As at FY24 capacity care suites care suites New units acquired delivered units added decommissions HY25 Existing Care beds 1,396
Slide 47: Summary of unit sales
12 Summary of unit sales New Sales HY21 HY22 HY23 HY24 HY25 Villa 19 13 0 5 0 Apartment 38 44 28 42 38 Care suite 65 44 33 36 51 Total 122 101 61 83 89 Average development margin 27.1% 26.0% 34.6% 24.8% 34.4% Resales HY21 HY22 HY23 HY24 HY25 Villa 15 27 28 35 35 Apartment 9 18 24 20 24 Care suite 62
Slide 48: Definition of Underlying NPAT
13 Definition of Underlying NPAT Underlying Profit (or Underlying NPAT) Development Margin Underlying Profit is a non-GAAP measure used by the Group to monitor financial performance and is a The Directors’ estimate of realised development margin is calculated as the cash received, and consideration
Slide 49: Glossary
14 Glossary ARCC ORA Aged Residential Care Contract An occupation right agreement that confers on a resident the right to occupy a unit or care suite subject to certain terms and conditions set out in the agreement. Care suite A room or studio certified for the provision of care by the Ministry of H
Slide 50: Important notice and disclaimer
15 Important notice and disclaimer This presentation has been prepared solely by Oceania Healthcare Limited ("Oceania"). You including the merits and risks involved. Investors should consult their own legal, tax and/or must read this disclaimer before making any use of this presentation and the acco