Ryman Healthcare Ltd. · NZX:RYM
Ryman Healthcare — FY2020 Earnings Presentation
60 slides from Ryman Healthcare's earnings presentation, May 2020
Slide 1: Full year result
R Y M A N H E A LT H C A R E Full year result 31 March 2020 1
Slide 2: Full year highlights
Update Full year highlights Underlying profit* of $242 million, up 6.6% Reported (IFRS) profit of $265 million, down 19% Full year dividend increased to 24.2 cents, in line with growth in underlying profit Operating cashflows of $449.8 million, up 12% Cash receipts of $1.13 billion, up 12% Total ass
Slide 3: 18 years of underlying profit growth
profit growth 18 years of underlying - $50m $100m $150m $200m $250m 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 3
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Slide 8: Rentraen Resittee® Atco Meat
Rentraen Resittee® Atco Meat
Slide 9: Construction: we do it safely
ryan!) & GONSTRUCTION We do it | SAFELY OF Mot at al!
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Slide 14: Ryman pioneers
RYMAN PIONEERS . oe / Ng 7) y ON we < reader's” ae 5 ee ee w * NI ee a nS SRR Gy ° Cay. ‘ey. \ 2 ies <<: / a << / feadersy Reader oo saders i ire a pacar *etremspeivoe”
Slide 15: Proud to be Dementia Friendly
We’re proud to be Dementia Friendly Accredited by Alzheimers New Zealand Dementia at, Friendly _ ge" Recognition «*\>~ Programme ***" NGA TOHU POU WHIRINAKI MATE WAREWARE
Slide 16: Village sites: Ringwood East, Highett, Northwood
Ringwood East Melbourne Highett Northwood Melbourne Christchurch 16
Slide 17: Takapuna
* Takapuna ba Auckland bet
Slide 18: Aberfeldie, Hobsonville, Ocean Grove
Aberfeldie Hobsonville Ocean Grove Highett Riccarton Highton Havelock North 18
Slide 19: Land bank of 6,595 beds and units
Land bank of 8,000 6,595 beds 7,000 and units 6,000 5,000 4,000 3,000 2,000 1,000 0 2016 2017 2018 2019 2020 Consented Not consented 19
Slide 20: Karori, Mt Eliza, Mt Martha
Karori Mt Eliza Mt Martha 20
Slide 21: Construction activity (March 2019)
Construction activity Nellie Melba (March 2019) Murray Halberg William Sanders Linda Jones Burwood East Lincoln Road Havelock North Highton Aberfeldie Hobsonville Ocean Grove Riccarton Park 21
Slide 22: Construction activity (March 2020)
Construction activity Nellie Melba (March 2020) Murray Halberg William Sanders Linda Jones Burwood East Lincoln Road Havelock North Highton Aberfeldie Hobsonville Ocean Grove Riccarton Park Highett 22
Slide 23: Linda Jones, Hamilton – January 2019
Linda Jones Hamilton – January 2019 23
Slide 24: Linda Jones, Hamilton – March 2020
Linda Jones Hamilton – March 2020 24
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Slide 26: World population growth 80+
World population 0.9m Forecasts 900m growth 80+ 0.8m 800m 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) Victoria (LHS) Source: United Nations World Population Pro
Slide 27: Reported profit
Reported profit Mar 20 Mar 19 Underlying profit (non-GAAP) $242.0m $227.0m Unrealised revaluations of investment properties -$70.9m +$102.4m Deferred tax credit / expense +$93.6m -$3.4m Reported net profit $264.7m $326.0m Underlying profit is a non-GAAP (Generally Accepted Accounting Principles) mea
Slide 28: Cash receipts from residents
$1,200m Cash receipts from residents $1,000m $800m $600m $400m $200m - 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 28
Slide 29: Investing cash flows $711 million
$800m Investing cash flows $700m $30m $711 million $39m $44m $600m $33m $500m $35m $400m $497m $300m $430m $200m $100m $101m $54m - 2019 2020 Purchase of land New villages Care / systems / projects Village upgrades Bed licences 29
Slide 30: Total assets
$9bn $8bn Total assets $7bn $6bn $5bn $4bn $3bn $2bn $1bn - Sep 15 Mar 16 Sep 16 Mar 17 Sep 17 Mar 18 Sep 18 Mar 19 Sep 19 Mar 20 Bank debt Total assets 30
Slide 31: Development margin
35% 30% Development margin 25% Target range 20% 15% 10% 5% - 2012 2013 2014 2015 2016 2017 2018 2019 2020 31
Slide 32: $856 million resales bank
$1,000m $856 million resales bank $800m $600m $400m $200m - 2014 2015 2016 2017 2018 2019 2020 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. 32
Slide 33: Value of contracts not settled
$350m Value of contracts not settled $280m $210m $140m $70m $0m 2016 2017 2018 2019 2020 Contracts not settled are unconditional occupation-right agreements which have been entered into by residents but have not been settled as the resident has not yet occupied the unit. 33
Slide 34: Sales price vs median house price
$1.4m Sales price vs $1.2m median house price $1.0m $0.8m $0.6m $0.4m $0.2m - 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 villages. 3
Slide 35: Long-term capital efficiency
Long-term capital efficiency $25 million raised at IPO in 1999 Invested $4.4 billion in portfolio since 1999 with no fresh capital Dividends of over $920 million paid since float* Self-funded growth Strong balance sheet * Includes final dividend of 12.7 cents per share that has been declared and is
Slide 36: Questions
R Y M A N H E A LT H C A R E Questions 31 March 2020 36
Slide 37: Appendix 1: Full year highlights
Appendix 1: Full year highlights Underlying profit of $242 million, up 6.6% Reported (IFRS) profit of $265 million, down 19% Full year dividend increased to 24.2 cents, in line with growth in underlying profit Operating cash flows of $449.8 million, up 12% Cash receipts of $1.13 billion, up 12% Tota
Slide 38: Appendix 1: Full year highlights
Appendix 1: Full year highlights Significant investment in keeping residents and staff safe from COVID-19 Continued strong demand for villages with only 1.7% of resale stock unsold 98% occupancy at established care centres Seven new villages approved by councils totalling 2,029 beds and units Anothe
Slide 39: Appendix 2: Sale of occupation rights
Appendix 2: Sale of occupation rights Mar 20 Mar 19 Existing units Independent 425 378 Serviced 498 446 923 824 New units Independent 426 302 Serviced 87 112 513 414 Total 1,436 1,238 39
Slide 40: Appendix 3: Development
Appendix 3: Development Mar 20 Mar 19 Units and beds built Retirement village units added 545 464 Plus units demolished (Malvina Major)* 45 0 Aged care beds built 251 293 Total units and beds built 841 757 Total retirement village units Independent 5,264 4,915 Serviced 2,159 1,963 7,423 6,878 Total
Slide 41: Appendix 4: Margins
Appendix 4: Margins Mar 20 Mar 19 Reference $000s $000s New sales Realised fair value movement (Note 7) 105,757 87,866 Sale of occupation rights (Key statistics) 386,673 290,701 Gross development margin 27% 30% Resales Realised fair value movement (Note 7) 109,565 102,600 Resale of occupation rights
Slide 42: Appendix 5: Cash management fees
Appendix 5: Cash management fees Mar 20 Mar 19 Reference $000s $000s Accrued management fees – opening (Note 13) 376,161 321,631 Less: Accrued management fees – closing (Note 13) (439,636) (376,161) Movement in accrued management fees (63,475) (54,530) Plus: DMF income Income statement 88,713 78,944
Slide 43: Appendix 6: Investment property summary
Appendix 6: Investment property summary CBRE unit price inflation assumption Discount rate As at 31 March 2020 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5+ Auckland -1.5% 0.2% 2.1% 3.0% 3.5% 12.9% Rest of New Zealand -1.0% 0.3% 2.0% 2.7% 3.4% 13.5% Melbourne 0.0% 0.6% 2.8% 3.7% 4.1% 14.6% CBRE unit price inflation ass
Slide 44: Appendix 7: Operating cash flows
Appendix 7: Operating cash flows Mar 20 Mar 19 $000s $000s Resident receipts 333,476 302,046 Refundable accommodation deposits (net) 41,120 3,807 Development sales 305,540 300,351 Resales 449,797 403,292 Total receipts from residents 1,129,933 1,009,496 Interest received 573 588 Payments to supplier
Slide 45: Appendix 8: Available resales stock
Appendix 8: Available resales stock Mar 20 Sep 19 Mar 19 Independent living units 60 48 29 Serviced apartments 67 63 40 Total resales stock 127 111 69 Total retirement portfolio 7,423 7,071 6,878 Uncontracted stock percentage * 1.7% 1.6% 1.0% 3.0% 2.0% 1.6% 1.7% 1.4% 1.3% 1.4% 1.2% 1.2% 0.9% 1.0% 0.
Slide 46: Appendix 9: Capital management
Appendix 9: $1,800m Use of debt Capital management $1,600m $175m $76m $45m $1,400m Gearing ($m) Mar 20 Mar 19 $229m Systems and Bank debt $1,707 $1,324 $1,200m other assets Net assets $2,301 $2,170 Other village $1,000m capex Total asset $7,677 $6,651 Village upgrades Bank debt/(bank debt + eq) 42.6
Slide 47: Appendix 10: Resident average age and tenure (years)
Appendix 10: Resident average age and tenure (years) 93 91 89 Average age Mar 20 Mar 19 Independent 82.2 82.3 87 Serviced 87.5 87.5 85 Care centre 86.6 86.4 83 Average tenure - vacated units Mar 20 Mar 19 81 Independent 5.7 5.5 79 Serviced 3.0 2.6 77 75 Sep 13 Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Sep
Slide 48: Appendix 11: Value of contracts not booked
$160m Appendix 11: Value of contracts not booked $120m $80m $40m - 2016 2017 2018 2019 2020 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 complete. 48
Slide 49: Appendix 12: Gross occupancy advances
Appendix 12: $4bn Gross occupancy advances $3bn $2bn $1bn $0bn 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 49
Slide 50: Appendix 13: Operating cash flow
Appendix 13: $500m Operating cash flow $400m $300m $200m $100m - 2014 2015 2016 2017 2018 2019 2020 50
Slide 51: Appendix 14: Average new and resale prices
Average new Appendix 14: and resale prices $0k $200k $400k $600k $800k 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 New sales 2008 2009 2010 2011 Resales 2012 2013 2014 2015 2016 2017 2018 2019 2020 51
Slide 52: Appendix 15: The 'gold standard' of care 4 year certification
Appendix 15: The ‘gold standard’ of care 4 year certification 81% 48% Source: Ministry of Health. Large operators reflects aged care providers with 15 or more care centres. Data at 29 May 2020. Ryman Large operators 52
Slide 53: Appendix 16: Our build rate
1000 0 100 200 300 400 500 600 700 800 900 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Appendix 16: Our build rate 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 53
Slide 54: Appendix 17: Eleven sites in Victoria
Ryman village Aberfeldie Coburg Under construction Proposed village Ringwood East John Flynn Nellie Melba Weary Dunlop Highett Highton Mount Eliza Mount Martha Ocean Grove Appendix 17: Eleven sites in Victoria 54
Slide 55: Appendix 18: 13 sites in Auckland
Takapuna Hobsonville Bert Sutcliffe William Sanders Lincoln Road Kohimarama Grace Joel Evelyn Page Edmund Hillary Logan Campbell Bruce McLaren Murray Halberg Ryman village Under construction Possum Bourne Proposed village Appendix 18: 13 sites in Auckland 55
Slide 56: Appendix 19: Asset base
Appendix 19: 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 57: Appendix 19: Asset base
Appendix 19: 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 60 372 626 Evelyn Page Orewa 60 37 20 66 248 431 Grace Joel St Heliers 77 -
Slide 58: Appendix 20: Land bank (New Zealand)
Appendix 20: Land bank (New Zealand) Existing villages Location Hospital Dementia Resthome Serviced Independent Total Diana Isaac Christchurch - - - - 30 30 Grace Joel Auckland - - - - 96 96 Havelock North Hawkes Bay 35 35 20 76 122 288 Jean Sandel New Plymouth - - - - 59 59 Lincoln Road Auckland 42
Slide 59: Appendix 20: Land bank (Victoria)
Appendix 20: Land bank (Victoria) Existing villages Location Hospital Dementia Resthome Serviced Independent Total Nellie Melba Melbourne - - - - 113 113 John Flynn Melbourne 38 38 38 96 121 331 Total existing villages 38 38 38 96 234 444 New sites Location Hospital Dementia Resthome Serviced Indepe
Slide 60: Disclaimer
Disclaimer This presentation This presentation sets out information relating to Ryman Healthcare Limited’s full year result for the period to 31 March 2020. 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 als