Netcare Limited · JSE:NTC
Netcare — H1 2022 Earnings Presentation
37 slides from Netcare's earnings presentation, May 2022
Slide 1: Unaudited interim Group results for six months ended 31 March 2022
Netcare Limited Unaudited interim Group results For the six months ended 31 March 2022
Slide 2: Recovering demand driving improved performance
Recovering demand driving improved performance 1 Steady improvement in financial performance for H1 2022 against H1 2021 2 4th wave saw decoupling of rate of community spread from hospital admissions 3 Strong demand for private healthcare services since 4th wave subsided 4 Rollout of hospital Electr
Slide 3: Strong recovery in financial performance
Strong recovery in financial performance 1 Cash & EBITDA Adjusted HEPS Net debt / Interim Revenue committed EBITDA dividend facilities R10 311m R1 625m 35.2 cents 1.7x R3.4bn 20.0 cents ▲ 2.3% ▲ 8.8% ▲ 28.9% 2021: 2.0x 2021: 6.6bn 2021: Nil NETCARE LIMITED 1 Normalised to exclude impact of exception
Slide 4: Operational overview
01 Operational overview NETCARE LIMITED 4
Slide 5: 4th wave decoupling of COVID-19 spread and hospitalisation
4th wave decoupling of rate of COVID-19 spread and hospitalisation and emergence of “incidental” COVID-19 SA COVID-19 cases and Netcare COVID-19 patient days The Omicron variant saw a decoupling of direct correlation between the rate of community transmission and the rate of hospitalisation1 reflect
Slide 6: Robust improvement in key activity drivers
Robust improvement in key activity drivers Total Acute hospital Mental health Primary care patient days patient days patient days visits ▲ 2.7% ▲ 2.3% ▲ 6.1% ▲ 3.1% Acute hospital full week occupancy (%) 75% Acute hospital full week occupancy (%) 70% 62.3 62.4 ▲ 36.6% ▲ 35.0% 65% 60% 55.5 55% 53.8 5
Slide 7: Hospital and emergency services
Hospital and emergency services A stronger finish after a slow start Rm 31 Mar 2022 31 Mar 2021 % Revenue 10 008 9 794 2.2 EBITDA ¹ 1 554 1 439 8.0 Operating profit¹ 1 018 905 12.5 EBITDA margin (%) 15.5 14.7 Operating profit margin (%) 10.2 9.2 Revenue Margin Case mix starting to normalise towards
Slide 8: Primary care
Primary care A strong recovery Rm 31 Mar 2022 31 Mar 2021 % Revenue 309 293 5.5 EBITDA 71 54 31.5 Operating profit 25 10 150.0 EBITDA margin (%) 23.0 18.4 Operating profit margin (%) 8.1 3.4 Revenue EBITDA Patient visits 180 000 170 000 • ▲ 3.1% medical and dental • Stringent cost 160 000 150 000 pa
Slide 9: Long COVID: patients suffering long-term complications
Long COVID: emergence of patients suffering from long-term complications of COVID-19 Describes wide range of Over 200 conditions and Early Netcare data Potential of future physical and mental symptoms with wide supports studies showing medical demand health symptoms that spectrum and different incre
Slide 10: Long COVID: long-term effects reported
Long COVID: Over 200 long-term effects reported1 Respiratory Gastro-intestinal • Shortness of breath • Abdominal pain • Cough • Diarrhea Neurological Cardiological • Headache • Chest pain • Strokes • Palpitations and/or changes in heart rate Neuropsychiatric • Fatigue, post exertional malaise Haemat
Slide 11: Financial review
02 Financial review NETCARE LIMITED 11
Slide 12: Group financial overview
Group financial overview Improving financial performance, strong financial position and cash generation 1 Ongoing recovery in financial performance towards pre-COVID-19 levels 2 Operating leverage from increasing activity and cost efficiencies 3 Strong statement of financial position allows for cont
Slide 13: Summarised Group statement of profit or loss
Summarised Group statement of profit or loss Revenue Rm 31 Mar 2022 31 Mar 2021 % • Lower occupancies during 4th wave Revenue 10 311 10 081 2.3 absorbed by strong demand since mid-January 2022 EBITDA ¹ 1 625 1 493 8.8 Operating profit ¹ 1 043 915 14.0 EBITDA Other net financial expenses (171) (206)
Slide 14: Headline earnings per share (HEPS)
Headline earnings per share (HEPS) Improved HEPS and continuation of dividends Cents per share 31 Mar 2022 31 Mar 2021 % HEPS 31.9 26.6 19.9 Adjusted HEPS 35.2 27.3 28.9 Dividend 20.0 Adjusted HEPS (cents) Dividends (cents) 40.1 27.3 35.2 34.0 20.0 2021 2022 2021 2022 NETCARE LIMITED H1 H2 Interim F
Slide 15: Summarised Group statement of financial position
Summarised Group statement of financial position Allowing ongoing investment in facilities and key strategic projects Our policy Rm 31 Mar 2022 30 Sep 2021 Netcare’s policy on capital structure is Assets to maintain a strong statement of financial position and to retain an PPE 1, goodwill and intang
Slide 16: Debt position
Debt position Comfortable leverage and strong cash generation Our policy Rm 31 Mar 2022 30 Sep 2021 31 Mar 2021 Netcare’s policy on capital structure is to Gross debt 6 769 6 787 8 485 maintain a strong statement of financial position and to retain an investment Cash (1 390) (1 456) (2 413) grade cr
Slide 17: Debt facilities
Debt facilities Access to R3.4 billion cash and committed facilities with manageable maturity profile 1 Cash and debt facilities (Rm) Debt maturity profile (Rm) 31 March 2022 1 585 1 522 1 072 1 050 1 000 1 390 2 243 500 2 000 H2 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 NETCARE LIMITED Uncommitt
Slide 18: Strategic update
03 Strategic update NETCARE LIMITED 18
Slide 19: Netcare Alberton Hospital – a flagship in Southern Gauteng
Netcare Alberton Hospital – a flagship in Southern Gauteng Opened new Netcare Alberton Hospital in April 2022, replacing Netcare Union and Clinton hospitals 427 beds with 135 ICU and High Care beds Level 11 accredited accident and emergency department equipped to deal with the highest level of traum
Slide 20: Netcare Akeso Richards Bay – new mental health facility
Netcare Akeso Richards Bay – new mental health facility on KZN North Coast Opened 36 bed facility 12 May 2022 Underlying regional demand for Forms part of expansion pipeline mental health reflected in high of mental health offerings, with occupancies in Netcare Akeso facilities in Eastern Cape and K
Slide 21: Electronic Medical Records projects progressing well
Electronic Medical Records (EMR) projects progressing well across the Group Within budget and good adoption by healthcare workers Hospitals Primary care Akeso NRC Cancer CareOn Heal CareOn nephrOn Care • 7 hospitals fully • Rollout to all • Rollout of • Completed in May • Development implemented in
Slide 22: CareOn – redesigning our healthcare ecosystem
CareOn – redesigning our healthcare ecosystem A transformational project of unprecedented size, scale and complexity The digitisation of our hospitals and real-time, mobile enabled clinical records integrates all aspects of healthcare delivery involving our doctors, nurses, pharmacists, allied healt
Slide 23: Electronic Medical Records – tangible benefits to doctors and patients
Electronic Medical Records – bringing tangible benefits to doctors and patients A landmark partnership between Netcare and EthiQal South Africa continues to experience a high burden of medicolegal claims USA is experiencing significant decline in frequency and quantum of claims. Pervasive use of ele
Slide 24: National Renal Care – health and care in the palm of your hand
National Renal Care – placing health and care in the palm of your hand Implemented fully integrated EMR (nephrOn) for patients receiving dialysis, as well as the National Renal Care app1 Treatment records available to patients after each dialysis session via National Renal Care app App also provides
Slide 25: MyNetcare Online
MyNetcare Online Our enhanced patient portal is tailored to the user and their specific healthcare needs Netcare Online appointmed™ pre-admissions Find an appropriate Avoid paperwork and medical professional and queues with online book appointments online pre-admission 25 Patient feedback Summary su
Slide 26: Driving continual improvement in best and safest patient care
Driving continual improvement in best and safest patient care Compassion is one of Netcare’s core values. At Netcare we strive to listen with empathy and respond with action, because at its core, compassion is empathy with action Compassion based training Quality of Care Partnered with Stanford Univ
Slide 27: Providing affordable quality access to Netcare's ecosystem
Providing affordable quality access to Netcare’s ecosystem Progress over last 6 months GapCare GapCare300 GapCare500 NetcarePlus registered Vouchers available at Vouchers available at Launch of prepaid Ear, Launch of Dental Vouchers as a Financial Services Launch of GapCare Checkers Mr Price Nose an
Slide 28: Empowering enterprise supplier development
Empowering enterprise supplier development Netcare Diagnostics Dosimeter Services • Partnered with newly established black • Established 51% black female-owned female owned pathology practice dosimetry services1 business enhancing protection of healthcare • Netcare provides equipment and professiona
Slide 29: Leading environmental sustainability in healthcare
Leading environmental sustainability in healthcare ü Only healthcare ü First healthcare ü Awarded the Commercial ü Environmental institution in the world to organisation in Africa to Corporate Company of performance now win Gold Medals in all join UN’s Race to Zero the Year Award in South linked to
Slide 30: Outlook and guidance
04 Outlook and guidance NETCARE LIMITED 30
Slide 31: Outlook: driven by COVID-19 and external factors
Outlook: driven by COVID-19 and external factors Evolution of COVID-19 Long COVID External factors Sub-variants of Omicron New variants Emergence of • Stability of national (serial mutation) (parallel mutation) chronic conditions electricity grid • Milder • Potentially more • Emergence of both sympt
Slide 32: Guidance
Guidance In absence of further severe COVID-19 waves and / or abnormal inflation Patient days Revenue Strategic EBITDA Capex projects margin ▲ 2.0% – 3.0% ▲ 3.0% – 4.0% FY 2022: Underlying FY 2022: vs. FY 2021 vs. FY 2021 R 273m opex H1 2022 margins R 1.4bn R 227m capex (excluding strategic costs) e
Slide 33: Thank you
Thank you Netcare Limited Providing. YOU with the best and safest care.
Slide 34: Appendices
05 Appendices NETCARE LIMITED 34
Slide 35: A bold 2030 environmental strategy
A bold 2030 environmental strategy 2030 environmental development goals Comply with 2030 global best A global leader in healthcare Drive long-term security, efficiencies practices including Science Based sustainability solutions and cost savings for the business Targets (SBT) and carbon budget goals
Slide 36: Key initiatives to achieving 2030 sustainability goals
Key initiatives to achieving 2030 sustainability goals Pillar 1: Pillar 2: Pillar 3: Pillar 4: Energy Waste Water Plant maintenance • Energy wheeling project • Zero waste to landfill • Grey and blackwater • Real time plant - 100% renewable strategies harvesting to monitoring and energy • HCRW1 innov
Slide 37: Investment in key strategic projects
Investment in key strategic projects Capex Opex Up to FY 2021 H1 2022 H2 2022 FY 2023 Up to FY 2021 H1 2022 H2 2022 FY 2023 Digital platforms CareOn 146 24 88 85 96 39 72 132 EMR: Akeso, Primary care, Netcare 17 1 9 2 8 2 911, Occupational Health Wi-Fi infrastructure 20 36 21 Data analytics Azure Cl