Sonic Healthcare Limited · ASX:SHL
Sonic Healthcare — H1 FY2006 Earnings Presentation
22 slides from Sonic Healthcare's earnings presentation, Feb 23, 2006
Slide 1: Interim Results
Interim Results For the Half-year ended 31 December 2005 Dr Colin Goldschmidt CEO and Managing Director 23 February 2006
Slide 2: Sonic Half-Year Summary
Sonic Half-Year Summary (1 July – 31 Dec 2005) z Excellent first half performance z Revenue up 17% z EBITA up 22% z Net Profit up 29% z EPS up 24% z Full-year guidance unchanged z Sonic tracking to guidance after 7 months z Sonic operations performing well z Strong outcomes from large Australian bus
Slide 3: 2006 Full-Year Guidance
2006 Full-Year Guidance 2006 Guidance ($M) Revenue 1,600 – 1,670 EBITA 300 – 320 Sonic 2006 guidance unchanged since 23 August 2005 Sonic tracking to 2006 guidance range after 7 months Includes CPL acquisition from 1 October 2005 Assumes no new acquisitions and constant currency exchange rat
Slide 4: Revenue Growth
Revenue Growth 6 Months ended 6 Months ended Growth 31.12.05 31.12.04 ($M) ($M) (%) Total Revenue 788.7 672.1 17.3% z Revenue growth of 17.3% z Global organic revenue growth (excluding acquisitions) ~ 7% z CPL (USA) acquisition on 1 October 2005 z Australian pathology and radiology growth in line wi
Slide 5: Sonic Revenue Split
Sonic Revenue Split H1, 2004 H1, 2005 H1, 2006 Total Revenue $510 million Total Revenue $672 million Total Revenue $789 million IPN IPN 4% 6% Radiology Radiology Radiology 27% 22% 20% Pathology Pathology Pathology 73% 74% 74%
Slide 6: Annual Revenue
Sonic Healthcare Annual Revenue 1,800 1,600 1,400 1,200 1,000 $M 800 600 400 200 0 2000 2001 2002 2003 2004 2005 2006(F) Revenue ($M) 387 628 860 975 1,037 1,380 1,635 Forecast 2006 Revenue = $1,600 - $1,670 million
Slide 7: Earnings Growth
Earnings Growth 6 Months ended 6 Months ended Growth 31.12.05 31.12.04 % EBITA ($’000) 147,124 120,739 21.9% NPAT ($’000) 83,195 64,278 29.4% EPS (cents) 29.0 23.4 23.9% Cash Generation ($’000) 120,086 96,643 24.3% NOTE: All comparatives have been adjusted to conform with IFRS standards, as required
Slide 8: EBITA Margins
EBITA Margins 6 Months ended 6 Months ended 31.12.05 31.12.04 EBITA Margin 18.7% 18.0% z Margin growth of 70 basis points, compared with previous corresponding period z Revenue growth with marginal profit z Accord Pathology acquisition and mergers with DHM (Sydney) and Clinipath (Perth) z Extraction
Slide 9: Interim Dividend
Interim Dividend 2005 2004 Movement ($) ($) % Interim Dividend 0.15 0.13 15.4% z Dividend fully franked at 30% z Record Date 6 March 2006 z Payment Date 20 March 2006 z Dividend Reinvestment Plan remains suspended
Slide 10: Senior Debt / Gearing
Senior Debt / Gearing z Revised senior debt facility for $1,000 million almost finalised z Increased headroom (~$250 million) z Lower margins z More flexible covenant structure z Take out of CPL bridge facility z Gearing ratios improved as result of capital raising and earnings growth z Balance shee
Slide 11: Capital Raisings
Capital Raisings z Institutional Placement z 15,474,553 shares issued @ $14.54 on 25 October 2005 z $225 million raising z Placement price set at 3% discount to market z Shareholder Purchase Plan z 2,079,869 shares issued @ $13.99 on 8 December 2005 z $29.097 million raising z Purchase price set at
Slide 12: Australia / New Zealand Operations
Australia / New Zealand Operations z Pathology z Strong results from Douglass Hanly Moir Pathology (New South Wales), Sullivan Nicolaides Pathology (Queensland), Melbourne Pathology (Victoria), Capital Pathology (Canberra) z Smaller NZ labs renegotiating contracts with District Health Boards z Radio
Slide 13: New Sonic “Super Lab” – Sydney
New Sonic “Super Lab” – Sydney DHM Central Lab / Sonic Head Office z Rationale z DHM and Sonic moved into current building in 1994 z DHM’s revenue has increased 5-fold since 1994 z Sonic’s revenue has increased from ~$50 million to ~$1,600 million since 1994 z Space issues for both DHM and Sonic Hea
Slide 14: IPN
IPN z Dr Malcolm Parmenter, newly appointed CEO z A General Practitioner with extensive business and management experience z Deep understanding of general practice and healthcare market z Smooth transition into organisational infrastructure z Has “hit the ground running”! z Strong positive reception
Slide 15: IPN Board
IPN Board 1. Mr Colin Jackson (Chairman) – Sonic 2. Dr Malcolm Parmenter (CEO) 3. Mr Mark Compton 4. Ms Verilyn Fitzgerald 5. Mr Ray Walker 6. Dr Colin Goldschmidt – Sonic 7. Mr Chris Wilks – Sonic 8. Mr Paul Alexander – Sonic Ms Lesley Kennedy (Company Secretary)
Slide 16: UK Operations
UK Operations z TDL core business performing strongly z Esoteric referrals from TDL to Schottdorf delivering synergy benefits z Sonic and TDL working on a range of other synergies z Purchasing and Warehouse management z IT z Lab design, workflow z Benchmarking z NHS outsourcing – Ongoing review of N
Slide 17: German Operations
German Operations z Schottdorf Group business tracking strongly z Sonic synergies z Esoteric pathology specimens referred from TDL to Schottdorf daily z Additional revenue to Schottdorf z Lower testing costs for TDL z Better service delivery and turnaround times z Acquisition opportunities in German
Slide 18: Clinical Pathology Laboratories (CPL)
Clinical Pathology Laboratories (CPL) z Sonic acquired 82% of CPL from 1 October 2005 for ~US$312 million z CPL business performing strongly z Earn out of US$20.025 million likely to be paid in full (~June 2006) z CPL offers Sonic a unique growth platform in world’s largest market z Sonic/CPL consid
Slide 19: Sonic Core Values
Sonic Core Values How we should behave z Commit to service excellence z Treat each other with respect and honesty z Demonstrate responsibility and accountability z Strive for continuous improvement z Maintain confidentiality
Slide 20: Sonic Foundation Principles
Sonic Foundation Principles What our customers want Medical Practice Medical Leadership Technical and Professional Personalised Satisfying Operational and Academic Service for Patient Needs Excellence Expertise Doctors
Slide 21: Corporate Development
Corporate Development z A major new initiative within Sonic Healthcare z Dedicated to fostering outstanding human and service attributes within Sonic z Headed by Dr Gloria Armellin z Ms Rosemary Cooper, Ms Jillian Stevens, Ms Ingrid Slater z Programs to be delivered throughout Sonic practices z Core
Slide 22: Future
Future z Sonic Australian businesses in strong position z Excellent pathology and radiology businesses z Extensive infrastructure z Outstanding relationships with medical profession z Strong offshore growth prospects z CPL opens a major new growth market in the USA z TDL/Sonic UK set for extended gr