Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — 5th Annual Citi Australia and New Zealand Investment Conference (March 2008)
26 slides from Ramsay Health Care's conference presentation, Mar 11, 2008
Slide 1: 5th Annual Citi Australia and New Zealand Investment Conference
For personal use only 5th Annual Citi Australia and New Zealand Investment Conference London 10 March 2008 Pat Grier, Managing Director
Slide 2: Agenda
For personal use only AGENDA • About Ramsay Health Care • The Reason for Ramsay’s Success • December 07 Half Year Results Overview • Rationale for Going Offshore • The Acquisition of Capio UK • Outlook 2
Slide 3: About Ramsay
For personal use only ABOUT RAMSAY • Established in 1964 • Listed on the Australian Stock Exchange September 1997 • Since listing Ramsay has: ¾ Grown to become Australia’s largest private hospital operator ¾ 28% of Australian private hospital market ¾ Led the way in developing the role of the privat
Slide 4: Remarkable Transformation at Listing vs Today
REMARKABLE TRANSFORMATION For personal use only AT LISTING TODAY (Sept 1997) More than 100 hospitals and facilities 11 hospitals • 65 in Australia • 3 in Indonesia • 34 hospitals and day surgery facilities in the UK 1,351 beds More than 8,000 beds •7,067 in Australia and Indonesia •1,071 in the UK 2
Slide 5: Revenue Growth Milestones
REVENUE GROWTH MILESTONES For personal use only Capio UK Acq. 2007 Affinity Group Acq. Apr’05 Benchmark Group Acq. Jul’04 Greenslopes Major Expansion Opened May’03 Hollywood Major Expansion Opened Jul’02 Alpha Group Acq. May’01 North Shore Private Hosp Opened Jul’98 RHC Listed Sep’97 Greenslopes Acq
Slide 6: Operating in an Industry with Strong Fundamentals
OPERATING IN AN INDUSTRY WITH For personal use only STRONG FUNDAMENTALS • Strong industry fundamentals underpin Ramsay’s growth • Ageing population • Private health insurance at historically high levels and growing • Balanced health care system to be continued by new Labor Government ¾ 30% rebate to
Slide 7: Reason for Success – Strong Growth Strategy
REASON FOR SUCCESS – For personal use only STRONG GROWTH STRATEGY • Organic growth ¾ seeking to optimise growth at existing hospitals, micro management • Investing in existing business ¾ Improving the quality of our facilities and acuity of our hospitals ¾ Brownfield expansion programme • Acquisitio
Slide 8: Reason for Success – Management & Culture
REASON FOR SUCCESS – For personal use only MANAGEMENT & CULTURE • Strong management : experienced and committed • Strive for continuous quality improvement in patient care • Our culture ¾ Encouraging development of “The Ramsay Way” ¾ Committed to managing and recognising staff performance • Strong r
Slide 9: Growth Strategy Delivering Strong Returns
GROWTH STRATEGY DELIVERING For personal use only STRONG RETURNS Ramsay Total Shareholder Return 400% 350% 345% 300% 250% 200% 150% 112% 100% 91% 50% 0% (50)% 29-Jun-01 29-Jun-03 29-Jun-05 29-Jun-07 28-Feb-08 Ramsay ASX 200 Accumulation Index ASX 200 Healthcare Accumulation Index 9
Slide 10: Reason for Success – Financially Disciplined
REASON FOR SUCCESS – For personal use only FINANCIALLY DISCIPLINED • Growth only pursued if financial criteria and hurdles are satisfied ¾ Targeting 15% ROI over to short-to-medium term • Willing to consider investments outside hospitals if financial criteria is met and if compatible with hospitals
Slide 11: Half Year Results Overview (Pre Capio UK)
HALF YEAR RESULTS OVERVIEW For personal use only (PRE CAPIO UK) • Strong half-year result on like-for-like basis ¾ Half-year core EPS growth tracking towards full-year guidance for low double-digit growth ¾ Strong organic growth across the portfolio with the minimal remaining synergies from Affinity
Slide 12: Financial Performance (Pre Capio UK)
FINANCIAL PERFORMANCE (PRE CAPIO UK) For personal use only Half Year ended 31 December 2007 2006 $m $m % Inc. Continuing Operations Operating Revenue 1,128.9 1,055.2 7.0% EBITDA 153.5 138.5 10.8% EBIT 120.4 108.5 11.0% Core NPAT – continuing operations 63.6 56.2 13.2% Core EPS – continuing operation
Slide 13: Group Financial Performance (Including Capio UK)
GROUP FINANCIAL PERFORMANCE (INCLUDING CAPIO UK) For personal use only Half Year ended 31 December 2007 2006 $m $m % Inc. Continuing Operations (including Capio UK) Operating Revenue 1,188.1 1,055.2 12.6% EBITDA 156.6 138.5 13.0% EBIT 120.1 108.5 10.7% Core NPAT – continuing operations 61.2 56.2 9.0
Slide 14: Core EPS Growth (Pre Capio UK)
CORE EPS GROWTH (PRE CAPIO UK) For personal use only • Core EPS up 13.5% • Better than planned 14
Slide 15: Interim Dividend Up 15.4%
INTERIM DIVIDEND UP 15.4 % For personal use only Final Dividend Interim Dividend 15
Slide 16: Half Year Operational Highlights (Pre Capio UK)
HALF YEAR OPERATIONAL HIGHLIGHTS For personal use only (PRE CAPIO UK) • Strong growth on like-for-like basis • Group EBIT up 11% on strong performance across portfolio • Strong organic EBIT growth in all states except Western Australia (marginally diluted by Hollywood) • Hospital EBIT growth 9% • Ve
Slide 17: Brownfields
For personal use only BROWNFIELDS • Brownfield developments to start being commissioned and delivering earnings growth from the end of FY08 onwards • Ramsay already committed $550M for enhancements and capacity expansion which includes the creation of mega referral centres • Approx 25% spent • Avera
Slide 18: Rationale for Offshore Expansion
For personal use only RATIONALE FOR OFFSHORE EXPANSION • Competition constraints mean Ramsay cannot make further meaningful acquisitions in Australia • Ramsay can be successful offshore ¾ Ability to run our business on relatively low revenue base ¾ Ability to generate good returns from running a cos
Slide 19: Rationale for the UK
For personal use only RATIONALE FOR THE UK • Strong growth potential ¾ Outsourcing of National Health Service to private sector presents significant upside ¾ All indications are that Government is fully committed to NHS reform agenda • Private Medical Insurance (PMI) ¾ Stable market • Similar cultur
Slide 20: Ramsay UK - Profile
For personal use only RAMSAY UK - PROFILE • 4th largest operator of private hospitals in the UK • Diverse business and revenue source ¾ 23 private hospitals across England with 895 beds and 50 operating theatres ¾ 9 Independent Sector Treatment Centres (ISTCs) ¾ 2 neurological rehabilitation homes ¾
Slide 21: Rationale for Capio UK
For personal use only RATIONALE FOR CAPIO UK • Well positioned to capitalise on changing landscape • Size and dynamics perfect for Ramsay to make foray into UK market ¾ Good strategic fit ¾ Easy to manage, integrate • Forced sale due to competition regulations • Experienced, self sufficient Capio UK
Slide 22: Ramsay UK – Future Growth
RAMSAY UK – For personal use only FUTURE GROWTH • Rising NHS activity encouraging ¾ Increasing number of spot contracts have been negotiated ¾ Choose & Book rising through improved marketing ¾ Number of NHS patients treated at Ramsay UK hospitals in calendar 2007 more than double 2006 • Well positio
Slide 23: Ramsay UK – Future Growth
RAMSAY UK – For personal use only FUTURE GROWTH • Full patient choice to be officially launched in April 2008 but staged use of Choose & Book already in place and increasing • Ramsay model forecasts slow growth in patient choice. Current activity suggests model is conservative • Still investigating
Slide 24: Outlook: Ramsay Group Next Years
OUTLOOK For personal use only RAMSAY GROUP NEXT 3 YRS • Australia ¾ Strong organic growth to continue ¾ Strong industry fundamentals to underpin growth ¾ Will investigate opportunities to invest in hospitals where there are no competition issues and/or in health care businesses close to core compete
Slide 25: Outlook: Ramsay Group FY08
OUTLOOK For personal use only RAMSAY GROUP FY08 • Capio UK performing to expectations,1.5-2.0 cents/share dilutive in FY08 • Capio UK expected to be Core EPS accretive in FY10 and beyond • Including Capio UK, Ramsay is targeting low double-digit growth for the total group for FY08, on the back of st
Slide 26: Questions
For personal use only QUESTIONS