Ryman Healthcare Ltd. · NZX:RYM
Ryman Healthcare — H1 FY2020 Earnings Presentation
66 slides from Ryman Healthcare's earnings presentation, Sep 30, 2019
Slide 1: Half year result 30 September 2019
R Y M A N H E A LT H C A R E Half year result 30 September 2019 1
Slide 2: First half highlights
Update First half highlights Underlying profit* of $103.0 million, up 6.2% Reported (IFRS) profit up 11.1% to $188.3 million Interim dividend increased to 11.5 cents, in line with underlying profit growth Operating cashflows $256.1 million, up 17.6% Total assets up 17.4% to $7.26 billion on Septembe
Slide 3: First half underlying profit
profit First half underlying - $40m $80m $120m 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 3
Slide 4: Total assets
Total assets - $1.0bn $2.0bn $3.0bn $4.0bn $5.0bn $6.0bn $7.0bn $8.0bn Sep 06 Sep 07 Sep 08 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Sep 19 4
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Slide 6: The 'gold standard' of care
The ‘gold standard’ of care 4 year certification 84% 47% Source: Ministry of Health. Large operators reflects aged care providers with 15 or more care centres. Data at 11 November 2019. Ryman Large operators 6
Slide 7: myRyman Life Model of Dementia Care
%° myRyman Life @ Model of Dementia Care
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Slide 10: Medical advisory committee
Medical advisory committee Professor Richard Sainsbury Emeritus Professor, Geriatric Medicine, Otago University - Geriatrician Alex de Roo Pharmacist Billy Allan Medication Safety Specialist, Health Quality & Safety Commission Dr Murray Robson General Practitioner Dr Kathleen Potter Research Doctor
Slide 11: myRyman
myRyman >is ® 15:03 < Wed, 26 June 2019 10 F RR Morning Cares 5 02 Doreen needs full assistance when Morning Cares showering and washing Observation Change Water Jug fi Doreen needs full assistance when I dressing lower and upper body Food and Fluid Chart Ensure to apply moisturizer to skin and dent
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Slide 13: Paula Jeffs has joined our board
Paula Jeffs has joined our board Dr David Jo Warren George Claire Geoff Anthony Paula Kerr Appleyard Bell Savvides Higgins Cumming Leighs Jeffs Governance ✓ ✓ ✓ ✓ ✓ ✓ ✓ Executive Leadership ✓ ✓ ✓ ✓ ✓ Finance and Accounting ✓ ✓ ✓ ✓ ✓ Risk Management ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Property and ✓ ✓ ✓ ✓ Construction H
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Slide 15: We are lifting our build rate
1,800 We are lifting 1,600 our build rate 1,400 1,200 1,000 800 600 400 200 0 2003 2018 Medium term 1999 2000 2001 2002 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2019 2020 Actual Target Note: All data as at 31 March 15
Slide 16: Our land bank is at record levels
Our land bank 7,000 is at record 6,000 levels 5,000 4,000 3,000 2,000 1,000 0 Sep 12 Sep 17 Sep 09 Sep 10 Sep 11 Sep 13 Sep 14 Sep 15 Sep 16 Sep 18 Sep 19 16
Slide 17: Current sites
Current sites (as at Nellie Melba Sept 2018) Murray Halberg William Sanders Linda Jones Burwood East Lincoln Road Havelock North Highton Aberfeldie Hobsonville Highett Ocean Grove Riccarton 17
Slide 18: Construction activity target March 2020
Construction activity target Nellie Melba March 2020 Murray Halberg William Sanders Linda Jones Burwood East Lincoln Road Havelock North Highton Aberfeldie Hobsonville Highett Ocean Grove Target by March 2020 Subject to resource and building consent and Riccarton various regulatory approvals. Target
Slide 19: Aberfeldie
Aberfeldie Melbourne Whe, Wie DO mii ae 3H
Slide 20: Highett
Highett Victoria 20
Slide 21: Nellie Melba
Nellie Melba Melbourne 21
Slide 22: Highton
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Slide 23: Burwood East
Ser Burwood East Melbourne
Slide 24: Ocean Grove
Ocean Grove Victoria 24
Slide 25: Eleven sites in Victoria
Ryman village Aberfeldie Coburg Under construction Proposed village Ringwood East Burwood East Nellie Melba Weary Dunlop Highett Highton Mount Eliza Mount Martha Ocean Grove Eleven sites in Victoria 25
Slide 26: Northwood
Northwood Christchurch 26
Slide 27: William Sanders, Linda Jones, Murray Halberg
William Sanders Auckland Linda Jones Murray Halberg Hamilton Auckland 27
Slide 28: Lincoln Road
Lincoln Road Auckland Cry ae frm im 28
Slide 29: Havelock North
Havelock North Hawkes Bay 29
Slide 30: Hobsonville
Hobsonville Auckland 30
Slide 31: Cheyne Chalmers, Chief Operations Officer
Cheyne Chalmers Chief Operations Officer 31
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Slide 34: World population growth 80+
0.9m 900m World population 0.8m 800m growth 80+ 0.7m 700m 0.6m 600m 0.5m 500m 0.4m 400m 0.3m 300m 0.2m 200m 0.1m 100m - - 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 World (RHS) New Zealand (LHS) Vic (LHS) Source: United Nations World Population Prospects 2019, Au
Slide 35: World population growth 80+
0.9m 900m World population 0.8m 800m growth 80+ 0.7m 700m 0.6m 600m 0.5m 500m 0.4m 400m 0.3m 300m 0.2m 200m 0.1m 100m - - 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 World (RHS) NZ (LHS) Vic (LHS) Source: United Nations World Population Prospects 2019, Australian
Slide 36: World population growth 80+
0.9m 900m World population 0.8m 800m growth 80+ 0.7m 700m 0.6m 600m 0.5m 500m 0.4m 400m 0.3m 300m 0.2m 200m 0.1m 100m - - 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 World (RHS) NZ (LHS) Vic (LHS) Source: United Nations World Population Prospects 2019, Australian
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Slide 38: Reported profit
Reported profit Half year Half year Full year Sep 20 Sep 19 Mar 19 Underlying profit (non-GAAP) $103.0m $97.1m $227.0m Unrealised revaluations of investment properties +$92.7m +$72.8m +$102.4m Deferred tax expense -$7.4m -$0.4m -$3.4m Reported net profit $188.3m $169.5m $326.0m Underlying profit is
Slide 39: Operating cashflows
$280m $240m Operating cashflows $200m $160m $120m $80m $40m - Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Sep 19 39
Slide 40: Investing cash flows $360 million
$400m Investing cash flows $350m $26m $18m $360 million $300m $28m $20m $250m $200m $238m $150m $208m $100m $50m $78m $48m - Sep 19 Sep 20 Purchase of land New villages Care / systems Village upgrades 40
Slide 41: Total assets
$8bn $7bn Total assets $6bn $5bn $4bn $3bn $2bn $1bn - Sep 15 Mar 16 Sep 16 Mar 17 Sep 17 Mar 18 Sep 18 Mar 19 Sep 19 Bank debt Total assets 41
Slide 42: Development margin
35% 30% Development margin 25% Target range 20% 15% 10% 5% - 2012 2013 2014 2015 2016 2017 2018 2019 2020* Group development margin Margin excluding Malvina Major *Development margin at 30 September 2019. All other values at 31 March. 42
Slide 43: $867 million resales bank
$1,000m $867 million resales bank $800m $600m $400m $200m - Sep 15 Sep 16 Sep 17 Sep 18 Sep 19 Sep 20 New Zealand Victoria Note: The resale bank represents the extent that the current price exceeds the price paid by the current resident for the unit's occupancy rights. 43
Slide 44: Value of contracts not booked
$160m Value of contracts not booked $120m $80m $40m - 2016 2017 2018 2019 2020* *Contracts not booked at 30 September 2019. All other values 31 March. Presales are unconditional occupation right agreements which have been entered into by residents but have not been booked as the unit is not yet near
Slide 45: Sales price vs median house price
$1.2m Sales price vs $1.1m median house price $1.0m $0.9m $0.8m $0.7m $0.6m $0.5m $0.4m Melbourne Auckland Median house price - village areas Ryman - 2 bed independent Ryman - serviced The median house price reflects the average median house price over the last 6 months in the area surrounding our v
Slide 46: Long term capital efficiency
Long term capital efficiency $25 million raised at IPO in 1999 Invested $4 billion in portfolio since 1999 with no fresh capital Dividends of over $860 million paid since float* Self-funded growth Strong balance sheet * Includes interim dividend of 11.5 cents per share that has been declared and is
Slide 47: Underlying profit growth
$280m Underlying profit $240m growth $200m $160m $120m $80m $40m - 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 First half underlying profit Second half Target range 47
Slide 48: Appendices
Appendices 48
Slide 49: Appendix 1: First half highlights
Appendix 1: First half highlights Underlying profit of $103 million, up 6.2% Reported (IFRS) profit up 11.1% to $188.3 million Interim dividend increased to 11.5 cents, in line with underlying profit growth Full year underlying profit expected to be between $250 million and $265 million Operating ca
Slide 50: Appendix 1: First half highlights
Appendix 1: First half highlights Increased investment in resident experience, team development and safety Continued strong demand for villages with only 1.6% of resale stock unsold 97% occupancy at established care centres Eleventh site secured in Victoria, target remains to have five villages open
Slide 51: Appendix 2: Sale of occupation rights
Appendix 2: Sale of occupation rights Half year Half year Full year Sep 19 Sep 18 Mar 19 Existing units Independent 212 186 378 Serviced 242 219 446 454 405 824 New units Independent 196 120 302 Serviced 33 48 112 229 168 414 Note: 229 new sales of occupation rights for September 2019 includes 47 un
Slide 52: Appendix 3: Development
Appendix 3: Development Sep 19 Sep 18 Mar 19 Units and beds built Retirement village units added 193 199 464 Plus units demolished (Malvina Major)* 41 0 0 Aged care beds built 0 81 293 Total units and beds built 234 280 757 Total retirement village units Independent 5,013 4,690 4,915 Serviced 2,058
Slide 53: Appendix 4: Margins
Appendix 4: Margins Half year Half year Full year Sep 19 Sep 18 Mar 19 Reference $000s $000s $000s New sales Realised fair value movement (Note 3) 31,835 32,850 87,866 Sale of occupation rights (Key statistics) 160,726 120,447 290,701 Gross development margin 20% 27% 30% Gross development margin exc
Slide 54: Appendix 5: Cash management fees
Appendix 5: Cash management fees Half year Half year Full year Sep 19 Sep 18 Mar 19 Reference $000s $000s $000s Accrued management fees – opening (Note 4) 376,161 321,631 321,631 Less: Accrued management fees – closing (Note 4) (412,053) (347,471) (376,161) Movement in accrued management fees (35,89
Slide 55: Appendix 6: Investment property summary
Appendix 6: Investment property summary CBRE unit price inflation assumption Discount rate As at 30 September 2019 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5+ Auckland 0.4% 1.0% 2.4% 3.0% 3.5% 12.6% Rest of New Zealand 0.5% 1.0% 2.0% 2.8% 3.4% 13.3% Victoria 3.0% 3.4% 3.9% 4.1% 3.7% 14.1% CBRE unit price inflation as
Slide 56: Appendix 7: Operating cash flows
Appendix 7: Operating cash flows Sep 19 Sep 18 Mar 19 $000s $000s $000s Resident receipts 162,748 148,059 302,046 Refundable accommodation deposits (net) 26,623 (417) 3,807 Development sales 187,577 162,619 300,351 Resales 205,886 208,006 403,292 Total receipts from residents 582,834 518,267 1,009,4
Slide 57: Appendix 8: Available resale stock
Appendix 8: Available resale stock Half year Half year Full year Sep-19 Sep-18 Mar-19 Independent living units 48 42 29 Serviced apartments 63 36 40 Total resales stock 111 78 69 Total retirement portfolio 7,071 6,613 6,878 Uncontracted stock percentage* 1.6% 1.2% 1.0% 3.0% 2.0% 1.6% 1.4% 1.3% 1.4%
Slide 58: Appendix 9: Capital management
Use of debt $1,600m Appendix 9: $1,400m $151m Capital management $82m $46m $1,200m $144m Systems / care investment $1,000m Other village Half year Half year Full year capex Gearing ($m) Sep 19 Sep 18 Mar 19 $800m Village upgrades $757m Bank debt $1,505 $1,214 $1,324 New sale $600m debtors Net assets
Slide 59: Appendix 10: Resident average age and tenure (years)
93 Appendix 10: 91 Resident average age and tenure (years) 89 87 Average age Sep 19 Sep 18 Mar 19 85 Independent 82.2 82.3 82.3 83 Serviced 87.4 87.5 87.5 Care centre 86.5 86.4 86.4 81 Average tenure - vacated 79 Sep 19 Sep 18 Mar 19 units Independent 5.6 5.3 5.7 77 Serviced 2.8 2.6 2.5 75 Sep 13 Se
Slide 60: Appendix 11: 12 sites in Auckland
Hobsonville Bert Sutcliffe William Sanders Lincoln Road Kohimarama Grace Joel Edmund Hillary Logan Campbell Evelyn Page Bruce McLaren Murray Halberg Ryman village Under construction Possum Bourne Proposed village Appendix 11: 12 sites in Auckland 60
Slide 61: Appendix 12: Asset base
Appendix 12: Asset base New Zealand (ex Auckland) Village Location Hospital Dementia Resthome Serviced Independent Total Anthony Wilding Christchurch 80 33 35 50 110 308 Bob Owens Tauranga 40 40 40 79 218 417 Bob Scott Petone 40 40 34 89 254 457 Charles Fleming Waikanae 40 40 40 79 201 400 Charles U
Slide 62: Appendix 12: Asset base
Appendix 12: Asset base Auckland Village Location Hospital Dementia Resthome Serviced Independent Total Bert Sutcliffe Birkenhead 40 40 40 81 225 426 Bruce McLaren Howick 41 40 42 74 192 389 Edmund Hillary Remuera 114 30 50 60 373 627 Evelyn Page Orewa 60 37 20 66 248 431 Grace Joel St Heliers 77 -
Slide 63: Appendix 13: Land bank (New Zealand)
Appendix 13: Land bank (New Zealand) Existing villages Location Hospital Dementia Resthome Serviced Independent Total Diana Isaac Christchurch - - - - 30 30 Grace Joel Auckland - - - - 96 96 Jean Sandel New Plymouth - - - - 59 59 Linda Jones Hamilton 40 40 40 93 175 388 Murray Halberg Auckland - - -
Slide 64: Appendix 13: Land bank (Victoria)
Appendix 13: Land bank (Victoria) Existing villages Location Hospital Dementia Resthome Serviced Independent Total Nellie Melba Melbourne 31 - 29 50 165 275 Total existing villages 31 - 29 50 165 275 New sites Location Hospital Dementia Resthome Serviced Independent Total Aberfeldie Melbourne 25 25
Slide 65: Appendix 14: Population growth 80+
0.8m Appendix 14: Population growth 80+ 0.6m 0.4m 0.2m - 2008 2013 2018 2023 2028 2033 2038 2043 2048 NZ total population aged 80+ Victoria total population aged 80+ Source: Statistics NZ, Australian Bureau of Statistics (Series A) 65
Slide 66: Disclaimer
Disclaimer This presentation This presentation sets out information relating to Ryman Healthcare Limited’s half year result for the period to 30 September 2019. It should be read in conjunction with all other material which we have released, or may release, to NZX from time to time. That material is