Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — FY2006 Earnings Presentation
23 slides from Ramsay Health Care's earnings presentation, Aug 28, 2006
Slide 1: Financial Results Briefing, Year ended June 2006
Briefing — 28 August 2006 Financial Results Year ended 30 June 2006
Slide 2: Ramsay Financial Year Overview
aS RAMSAY FINANCIAL YEAR OVERVIEW HEALTH CAR » Creation of Australia’s leading hospital portfolio » Pleasing results from Ramsay and Affinity hospitals » Focus on hospital micro-management delivers profit growth ahead of expectations » Integration proceeding well » Core EPS growth ahead of initial F
Slide 3: Ramsay Financial Highlights
Es RAMSAY FINANCIAL HIGHLIGHTS HEALTH CARE a» Revenue from continuing operations up 73% to $2.0 billion » Total Core Net Profit (including profit from divested operations) up 69% to $93.3 million « Total Core EPS up 16% to 46 cents » Core EPS from continuing operations up 24% to 45 cents a 24 half d
Slide 4: Ramsay Financial Performance
ES RAMSAY FINANCIAL PERFORMANCE HEALTH CARE Continuing Operations: Operating Revenue 1,144.0 1,983.4 73% EBITDA 145.3 251.6 73% EBIT 107.8 193.3 79% Core NPAT - continuing operations 50.3 91.4 82% Divested Operations: Core NPAT - divested operations 4.8 1.9 Total Core Net Profit after Tax 55.1 93.3
Slide 5: Financial Performance: EPS and Final Dividend
a FINANCIAL PERFORMANCE RAMSAY EPS and Final Dividend Total Core NPAT $55.1 m $93.3 m 69% Less Preference Dividend - $14.1 m NPAT used to Calculate Total Core EPS $55.1 m $79.2 m 44% Shares on issue 138.8 m 171.9 m Total Core EPS 39.7 ¢ 46.0 ¢ 16% Core EPS from continuing operations 36.2 ¢ 44.9 ¢ 24
Slide 6: Financial Performance: Specific Items
a FINANCIAL PERFORMANCE RAN Specific Items $m Specific Items (net of tax) Costs associated with the Affinity acquisition (9.6) (Corporate restructuring costs, borrowing costs associated with divested hospitals, and one-off malpractice insurance costs) Profit on sale of divested operations 5.3 Amorti
Slide 7: Financial Performance: Continuing Operations
aS FINANCIAL PERFORMANCE RAMSAY Continuing Operations Breakdown of continuing Ramsay and retained Affinity operations Ramsay Affinity Operating Revenue ($m) 997.9 985.5 EBITDAR ($m) 138.4 134.0 Total Patient Days (000’s) 1,065.6 996.2 EBITDAR Margin 13.9% 13.6%
Slide 8: Strong EBIT Growth
Es STRONG EBIT GROWTH RAMSAY Continuing Operations 193.3) 125 107.8 76.9 66.4 75 58.4] 50 39.6 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 = EBIT up 79% for the year
Slide 9: Core NPAT Growth
Es CORE NPAT GROWTH RAMSAY Continuing Operations 91.4 50.3} 42.7 37.7 40 31.6] 16.8} 20 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 mw Core NPAT from continuing operations up 82% for the year
Slide 10: Core EPS Growth
ss CORE EPS GROWTH PANS AY Continuing Operations 39.0) 33.1 25.0 20 14.9 Cents/share 10 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 m Core EPS from continuing operations up 24% for the year m Average annual compound growth rate for continuing operations over 5 years of 25% (base year FY 2001)
Slide 11: Strong Operational Cash Flow
an RAMSAY STRONG OPERATIONAL CASH FLOW HEALTH CARE & $m EBITDA / Cash Flow 280 240 200 160 120 : in & «o_o , | | | FY 2001 FY 2002 FY 2003 FY 2004 Fy 2005 FY 2006 @ EBITDA O Gross Operating Cash Flow m Continuing effective cash flow management m Gross operating cash flow of $260m exceeds EBITDA of $
Slide 12: De-leverage & Gearing
aS RAMSAY HEALTH CARE DE-LEVERAGE & GEARING $m 1,500 fey = Acquisition > $1.4 bin / _ Divestment _ 1,200 7 14 Hospitals __ 3900 | Benchmark [7 J : $700 m 600 _ Acquisition Divestment LF a a __ Divestment 5 Hospitals 3 Sth Aust. Hospitals, 300 oe Care & Silver | : —@ Net Debt (D) =< Shareholder Equit
Slide 13: FY06 Objectives Achieved
FYO6 OBJECTIVES ACHIEVED Focus on core hospital management - delivered strong organic growth at Ramsay and Affinity hospitals Strategic review — portfolio restructuring completed, maximising value and positioning of facilities Divestments - realised strong proceeds of over $650 mln De-leverage and d
Slide 14: Ramsay Uniquely Positioned to Meet Challenges, Capture Growth
a RAMSAY UNIQUELY POSITIONED TO MEET RAMSAY CHALLENGES, CAPTURE GROWTH | HEALTH CARE » Market leader Economies of scale e 65 Australian facilities, 3 Indonesian facilities » © 7,230 beds » Operating and financial © 20,000 staff leverage ° 25% of private hospital beds » Portfolio rationalisation and
Slide 15: Strong Hospital Growth
os STRONG HOSPITAL GROWTH RAMSAY (year on year comparison) HEALTH CARE spital: Hospitals. Admissions Up 5.2% Up 17.7% Patient Days Up 2.2% Up 15.8% EBIT Up 7.4% Up 15.1% EBIT Margins 12.0% (vs 11.9%) | 11.2% (vs 10.9%) | 21.6% (vs 22.3%) » Exceeding overall industry growth # Solid hospital margin en
Slide 16: Integration Plan Proceeding Well
RAMSAY He CARE. INTEGRATION PLAN PROCEEDING WELL 3 year integration plan on track > To achieve pre-tax cost synergies of approx $35 mln by end 2008 > To realise pre-tax revenue synergies of $15 mln over 2 years, by end FY08 > 1% year ahead of schedule
Slide 17: RAMSAY
RAMSAY HEALTH CARE
Slide 18: Growth Strategy is Delivering Returns
a GROWTH STRATEGY IS RAMSAY DELIVERING RETURNS a Continue to grow earnings at hospital level > Organic growth >» Achieve Affinity synergies and earnings uplift a Brownfields expansion a Acquisitions > Hospital acquisition opportunities still exist in Australia > Explore offshore opportunities
Slide 19: Brownfields Expansion Strategy
HRAL RAMSAY TH CARE BROWNFIELDS EXPANSION STRATEGY Financial headroom to invest up to $400 mln in enhancements and capacity expansion In the process of identifying best investment opportunities investment criteria of 15% return on capital targeted over medium term To enhance profit growth in FY2008
Slide 20: Brownfield Capacity Expansion
aS RAMSAY HE 4 ALTH CARE BROWNFIELD CAPACITY EXPANSION Strategic development program: > Develop large multi-service hospitals to attract increased referrals in major metropolitan areas > Invest in other hospitals in portfolio to develop them as niche service providers in particular medical specialti
Slide 21: Hollywood Private Hospital Redevelopment Project
aS HOLLYWOOD PRIVATE HOSPITAL Revi Y Redevelopment Project m Strategic repositioning of Hollywood continues = Master Plan includes additional >» 90 Beds » 4 Operating Theatres >» Consulting Suites » Carparking >» Day Surgery/Facilities » Expanded Infrastructure # Development to be staged over 3 year
Slide 22: Ramsay FY 2007 Outlook
aS RAMSAY FY 2007 OUTLOOK HEALTH CARE » Targeting growth in FY07 of 15%-20% in Core EPS, over FY06 Core EPS of 44.9 cents, based on: >» Organic growth of Ramsay and Affinity hospitals > Realisation of synergies and improved earnings from Affinity under Ramsay management a Investigating: > Further Au
Slide 23: HEALTH CARE:
pd WA HEALTH CARE: