Slide 1: FY18 results
FY18 results Dr. Ian Kadish (MD & CEO) Anne Lockwood (CFO) 23 August 2018
Slide 2: Today's presenters
Today’s presenters Dr. Ian Kadish Anne Lockwood Managing Director and Chief Executive Officer Chief Financial Officer • Joined Integral Diagnostics in May 2017 • Joined Integral Diagnostics in 2016 and appointed as Chief Financial Officer in September 2017 • Has held roles including CSC Healthcare,
Slide 3: FY18 Headlines
FY18 Headlines • Delivered solid organic growth in line with guidance 20.5% growth in operating NPAT vs FY17 20.7% growth in operating EPS vs FY17 • Improved operating margin to 20.1% (FY17:18.6%) an industry leading margin • Declared a fully franked final dividend of 4.0 cents per share, bringi
Slide 4: FY18 financial performance
1. FY18 financial performance Confidential / Draft 3
Slide 5: Key highlights
Key highlights Operating FY18 results deliver an industry leading operating margin of 20.1% and up across key financial metrics $ millions FY18 FY17 Change ($) Change (%) Operating revenue(1) 188.1 177.7 10.4 5.9% Operating EBITDA (2) 38.1 33.5 4.6 13.7% Operating EBIT 28.5 23.7 4.8 20.3% Operating
Slide 6: Reconciliation of operating to statutory profit
Reconciliation of operating to statutory profit $ millions FY18 FY17 Change ($) Change (%) Operating NPAT 18.2 15.1 3.1 20.5% One off transactions net of tax Transaction costs (1.4) 0.0 (1.4) Impairment on asset and restructure provision 0.0 (0.8) 0.8 Fair Value gain on acquisition of SWMRI Joint ve
Slide 7: Profit & loss
Profit & loss Strong financial performance driven by solid organic growth and realisation of significant cost efficiencies $ millions FY18 FY17 Change ($) Change (%) Operating revenue 188.1 177.7 10.4 5.9% Operating EBITDA 38.1 33.5 4.6 13.7% Operating EBIT 28.5 23.7 4.8 20.3% Net finance costs (2.5
Slide 8: Revenue
Revenue Solid organic growth driven by IDX’s strong hub and spoke model Operating revenue up 5.9% to $188.1m and volume growth of 6.7%(1) • Organic growth delivered across all business units and operating regions – volume growth in excess of Medicare in the states in which we operate • New managemen
Slide 9: Operating Expenditure
Operating Expenditure Significant cost efficiencies realised delivering industry leading operating margin of 20.1% Expense growth declined as a % of revenue - Labour costs declined as a % of revenue reflecting management’s approach to flexing labour to demand. Labour costs in FY18 also include ~$1.3
Slide 10: Capital Management
Capital Management Strong balance sheet with increasing net assets to support on-going growth and acquisitions $ millions 30 Jun 18 30 Jun 17 31 Dec 17 • FY18 net debt of $44.9m (FY17: $48.7m) Cash and cash equivalents 20.8 24.2 25.4 - 1.2xEBITDA prior to one off transactions as at 30 June 2018 (FY1
Slide 11: Cashflow and cash conversion
Cashflow and cash conversion Strong business performance and cash conversion reflected in free cash flow growth • Normalised free cash flow conversion of 80.6% (FY17 $ millions FY18 FY17 72%) – 104% net of replacement capex Operating EBITDA 38.1 33.5 • Replacement capex $8.8m lower in FY18 v FY17 dr
Slide 12: Capital expenditure
Capital expenditure Management and Radiologists’ collaborative focus on “smart capex spending” (1) $ millions FY18 FY17 FY16 Replacement 8.8 11.1 9.5 Growth 5.2 2.3 7.4 Depreciation 9.2 9.1 8.7 • FY18 capex of $14m (forecast $17m) - Replacement capex of $8.8m - Reduced from budgeted $11m due to leve
Slide 13: Market update
2. Market update Confidential / Draft 12
Slide 14: Industry continuing cycle towards higher growth
Industry continuing cycle towards higher growth Industry growth is supported by: - Aging population - Increased prevalence of chronic disease - Advancements in technology for early diagnosis and screening MBS indexation will be reintroduced for targeted DI services from July 2020 The FY19 Federal bu
Slide 15: Regulatory environment generally positive
Regulatory environment generally positive Australia: July 1, 2018 • Consultation items indexed on the Medicare Benefits Schedule (MBS) • Introduction on the MBS of MRI Prostate items – strongly positive for patients and referrers • MRI prostate provides non invasive evaluation of the prostate for th
Slide 16: Strategy
3. Strategy Confidential / Draft 15
Slide 17: Management's FY18 strategy – good medicine is good business
Management’s FY18 strategy – good medicine is good business Strategy 1 Grow existing business and contain costs 2 Strategic acquisitions Increase Develop Drivers of Flex staff to Select bolt-on capacity Centres of Disciplined execution strategy demand acquisitions utilisation Excellence Geographic E
Slide 18: We did what we said we would do
We did what we said we would do FY18 achievements • Clinical leadership committees involved in strategic and operational decision making Medical • Progressed review of radiologist recruitment, retention, incentive and escrow arrangements leadership • Successfully defended unsolicited, hostile takeov
Slide 19: New Zealand Acquisition
New Zealand Acquisition Transaction • Purchase of Specialist Radiology Group, Trinity MRI and Cavendish Radiology overview • Represents leading specialist radiology clinics in Auckland • Employs leading New Zealand specialists in musculoskeletal radiology and neuroradiology • Completed in July 2018
Slide 20: IDX now operates in four key markets
IDX now operates in four key markets Total IDX Geographic Market Victoria Queensland Western Australia New Zealand Ballarat, Geelong, Gold Coast, Warrnambool and South West Western Core markets Toowoomba and Auckland outer western areas Australia Mackay of Melbourne Sites (includes hospital 27 13 9
Slide 21: Management's FY19 strategy – good medicine is still good business
Management’s FY19 strategy – good medicine is still good business Strategy 1 Grow existing business and contain costs 2 Strategic acquisitions Drive organic growth and Medical efficiency Leading edge Develop Drivers of leadership and Further disciplined execution of initiatives by technology Centres
Slide 22: Continued positive outlook
Continued positive outlook Following completion of the acquisition in New Zealand and Geelong, IDX operates 53 radiology clinics, including 13 hospital sites. The On-going market fundamentals in Australia and New Zealand will drive continued organic growth. In FY19 our priorities are to: • Leverage
Slide 23: Questions?
Questions? integral “yen “22
Slide 24: Disclaimer
Disclaimer Some of the information contained in this presentation contains “forward-looking statements” which may not directly or exclusively relate to historical facts. These forward-looking statements reflect Integral Diagnostics Limited (IDX) current intentions, plans, expectations, assumptions a
Slide 25: Contact us
Contact us Investors & Media Dr Ian Kadish, CEO P: +61 3 5339 0704 E: kadishi@integraldiagnostics.com.au