Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — Shareholder Meeting (November 2003)
23 slides from Ramsay Health Care's shareholder meeting presentation, Nov 25, 2003
Slide 1: Annual General Meeting
ANNUAL GENERAL MEETING 25 November 2003
Slide 2: Chairman's Overview
Chairman’s Overview Net profit up 19%, building on record profit growth of previous 2 years Total year dividend up 41% to 15.5 cents (fully franked) vs. 11 cents (unfranked) Strong result underlines strength and importance of Ramsay’s relationships with doctors and staff and its strategic port
Slide 3: Financial Highlights
Financial Highlights Net Profit up 19% to $37.1m Group Revenue up 20% to $662.2m Group EBIT up 14% to $66.4m (11% excluding acquisitions) ¾ Expansion program accounted for 6% EBIT growth ¾ Organic growth accounted for 5% EBIT growth EBIT margin of 10.4% (excluding new hospital acquisitions)
Slide 4: Financial Highlights FY 2003
Financial Highlights FY 2003 Year Ended 30 June 2002 2003 % Inc. $m $m Operating Revenue 549.8 662.2 20% EBITDA 80.8 91.0 13% EBIT 58.4 66.4 14% Profit before tax 43.6 53.5 23% NPAT 31.1 37.1 19% EPS (cents/share) 24.5¢ 28.9¢ 18% Full year Dividend 11.0¢ 15.5¢ 41% (cents/share) (Unfranked) (Franked)
Slide 5: NPAT Growth
NPAT Growth $m 37.1 40.0 35.0 31.1 30.0 25.0 20.0 16.0 15.0 6.6 10.0 5.0 0.0 FY 2000 FY 2001 FY 2002 FY 2003 Strong NPAT growth, year on year
Slide 6: Earnings per share
Earnings per share 28.9 30 24.5 25 Cents per Share 20 14.2 15 10 6.1 5 0 FY 2000 FY 2001 FY 2002 FY 2003 EPS up 18% in the year Return on investment 13.8% for FY03 Return on equity 14.6% for FY03
Slide 7: Dividend Growth
Dividend Growth 15.5# 16 11.0* 12 Cents per Share 8.5* 7.4* 8 4 0 FY 2000 FY 2001 FY 2002 FY 2003 Dividend increased 41% in latest year * Unfranked # Fully franked
Slide 8: Operational Highlights
Operational Highlights Focus on cost containment resulted in 2nd half NPAT matching 1st half despite higher nursing wages and seasonal factors Health Fund negotiations ¾ Positive relationships ¾ Aim to cover cost increases Medical Indemnity ¾ Excellent risk management record in keeping down cl
Slide 9: Occupancy – Patient Days
Occupancy – Patient Days 440 380 Inpatient 320 Total (Inpatient & Day Patients) 260 200 Jun'00 Dec'00 Jun'01 Dec'01 Jun'02 Dec'02 Jun'03 Half-year Ended Occupancy levels for the second half maintained despite seasonality
Slide 10: Revenue Growth Time Line
Revenue Growth Time Line Perth Alpha Hosp Veteran Hosp RHC listed Group Privatisation on the ASX Acquired $m Feb’94 Sept’97 May’01 700 650 Co-located Brisbane 600 Veteran Hosp North Shore 550 Privatisation Private Hosp Jan’95 Opened Jul’98 500 450 400 350 300 250 200 150 100 50 0 1993 1994 1995 1996
Slide 11: EBIT Growth
EBIT Growth $m 66.4 70.0 58.4 60.0 50.0 39.6 40.0 30.8 30.0 20.0 10.0 0.0 FY 2000 FY 2001 FY 2002 FY 2003 Group EBIT increased by 14% Breakdown of EBIT Growth: ¾ Brownfield developments - 6% ¾ Organic growth - 5% ¾ Acquisitions - 3% Group EBIT margin 10.4% (excluding acquisitions)
Slide 12: Brownfield Developments: Hollywood Private Hospital
Brownfield Developments Hollywood Private Hospital • Development: ¾ 60 new beds ¾ 10 new psychiatric beds ¾ 2 additional operating theatres (with capacity for two more theatres) ¾ A new Intensive Care Unit ¾ An additional Cardiac Catheter Lab ¾ Palliative care unit ¾ Medical suite complex • Came on-
Slide 13: Brownfield Developments: Greenslopes Private Hospital
Brownfield Developments Greenslopes Private Hospital • Development ¾ 90 new beds ¾ 4 additional operating theatres ¾ Medical suite complex • Largest private hospital in Australia at 527 beds • Opened late FY 2003 • Already exceeding current year EBIT target and investment hurdle rate
Slide 14: Brownfield Developments: Lake Macquarie Private Hospital
Brownfield Developments Lake Macquarie Private Hospital • Acquired April 2002 • Hospital development ¾ 44 new beds; total of 122 beds ¾ 2 additional operating theatres (with capacity for a third theatre) ¾ expanded day surgery ¾ medical consulting suite complex • Development largely complete - openi
Slide 15: Brownfield Developments: Mt Wilga Private Hospital
Brownfield Developments Mt Wilga Private Hospital • Hospital redevelopment ¾ New ward block; total of 80 beds ¾ New administration block, reception and entry ¾ Additional services • Completion targeted for end of 2004 calendar year
Slide 16: Cairns Acquisition
Cairns Acquisition Cairns Private Hospital • Acquired November 2002 • 141-bed former not-for-profit hospital servicing a large population in Northern Queensland • Exceeding budget • EPS positive in the current year • Improved performance under Ramsay management
Slide 17: DVA Contract Extended
DVA Contract Extended Ramsay will continue to have a contract with DVA for services to veterans at Greenslopes and Hollywood post-2006 Facilitates the continuation of vital service to veterans Greenslopes and Hollywood will continue as major providers of hospital services to veterans in Perth
Slide 18: Strategy
Strategy Management still pursuing growth strategy ¾ Organic growth through micro-management ¾ Target lower risk, higher returns through investment in existing hospital portfolio and capacity expansion ¾ Continue to investigate opportunities for growth both within the private hospital sector and o
Slide 19: Strategy: Aged Care and Hospitals
Strategy Aged Care ¾ Focus on specific profitable sectors of market, accommodation bonds and chargeable extra services ¾ Funding through free cash flow, enhanced by accommodation bonds ¾ Silver Circle acquisition ¾ Continue to pursue opportunities Hospitals ¾ Continue to pursue hospital acquisit
Slide 20: Mayne Hospitals Bid
Mayne Hospitals Bid Final acquisition terms did not meet Ramsay investment parameters One off costs in relation to the bid, approximately $2.5m, to be accounted for as a “specific” item in 1st half FY 2004 ¾ no impact on core profitability and ongoing cash flow generation
Slide 21: FY 2004 on Track
FY 2004 on Track Payer negotiations successfully completed for 90% of revenue First Quarter FY 2004 core profit in line with Budget ¾ Gross revenue up 19% ¾ Admissions and patient days up 13% (5.5% excluding Cairns and Greenslopes development) ¾ EBIT margins holding up above 10% Barring unfore
Slide 22: Outlook
Outlook Strategic position of RHC hospitals expected to keep demand strong against a slight industry softening Focus on cost containment and growing business Expansion program benefits continue to contribute to earnings - Greenslopes, Lake Macquarie Remain in a strong position to pursue stra
Slide 23: Questions
Ba AS RAMSAY HEALTH CARE Questions
Ramsay Health Care — Shareholder Meeting (November 2003) on 6ix