Life Healthcare Group Holdings Limited · JSE:LHC
Life Healthcare — Corporate Update (September 2016)
12 slides from Life Healthcare's corporate update, Sep 21, 2016
Slide 1: Pre-Close Investor call
Pre-Close Investor call 21 September 2016 www.lifehealthcare.co.za
Slide 2: Outlook as per the 2016 Interim results: Southern Africa
Outlook as per the 2016 Interim results Southern Africa SA: • Bed growth: − Addition of 119 beds in H2 • PPD growth: − Between 2.5% - 3.5% • EBITDA margins: − Margins may come under pressure due to Rand weakness − Between 27.5% - 28.5% • Continued focus on improving clinical quality outcomes 2
Slide 3: Outlook as per 2016 Interim results: International
Outlook as per 2016 Interim results International Poland: • Continued revenue and EBITDA growth • Focus on completing integration of acquired businesses to drive efficiencies − Secondment of LHC staff • Continue M & A activity India: • Continued focus on bedding down Vaishali Hospital and Max Smart
Slide 4: SA Introduction
SA Introduction • A difficult economic environment in SA with low to non-existent economic growth • Expect the lack of growth in new lives into the private healthcare market has continued in 2016 • Despite the strengthening of the Rand over the last few months, the Rand is still at weaker levels to
Slide 5: SA – Business Update: Acute business
SA – Business Update SA: Acute business • Bed growth for 2016 FY: − Additional brownfield beds: +- 140 beds • Expect PPD growth of between 3 - 3.5% (subject to September) • Occupancy consistent at between 71 – 72% • Pricing similar to H1 • Continued faster growth in medical cases 5
Slide 6: SA – Business Update: Complementary and Healthcare Services businesses
SA – Business Update SA: Complementary business • Continued strong growth in mental health − 35 mental health beds at Life Vincent Pallotti complete, awaiting inspection and should open end of September/early October − 55 mental health beds at Life Carstenhof running a few months late - open Q1 201
Slide 7: SA – Business Update: Regulatory environment
SA – Business Update SA: Regulatory environment • HMI process delayed - not sure when the provisional report will be released • Still on-going interaction between LHC and the HMI • HMI hearings continuing but in a closed format rather than open public hearings • At this stage difficult to say what
Slide 8: International: Poland business update
International: Poland business update Poland: • New Cardiac pricing came into effect 1 July: • Approximately a 20% decrease in pricing • Cardiology represents 45% of the Scanmed business • Limited impact in 2016 due to timing but will have a significant impact in 2017 • Expect some Orthopaedic price
Slide 9: International: India business update
International: India business update MHC: • Continue to see good revenue growth with improved occupancies in Vaishali and Max Smart hospitals • MHC has approximately 2,330 operational beds • Listing of Max India: • Occurred in July and consists of • Max Healthcare: LHC has a 46.25% shareholding • Ma
Slide 10: Finance overview: Margins and cash flow
Finance overview Margins: • SA: − Ebitda Margins are under a little pressure due to the impact of the weaker currency. Expect a slight decrease in margins • Poland: − Introduction of the Cardiac pricing as of 1 July will result in a decrease in overall Scanmed margins, particularly in 2017 − Will co
Slide 11: Finance overview: Balance Sheet
Finance overview Balance Sheet: • At interims our net debt was R7 927bn – net debt to normalised ebitda of 1.73x. Similar levels expected • Announced an impairment of not more than R380m in the Scanmed business due to the new Cardiac tariffs • Our Finance costs in H2 will be slightly higher than H1
Slide 12: Conclusion
Conclusion Annual Results presentation: • We will be doing a webcast of our annual results: − On Friday 11 November − 10am CAT • We will be doing an annual results road show: − London: 16-18 November (including attending the Investec CEO Conference) − SA: 21-23 November 12
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