Slide 1: Integral Diagnostics FY19 Results
Integral Diagnostics Providing Excellence in Diagnostic Imaging in Australia and New Zealand I FY19 Results Dr. Ian Kadish (MD & CEO) Anne Lockwood (CFCO) 26 August 2019 “Good Medicine is Good Business”
Slide 2: Today’s presenters
Today’s presenters Dr. Ian Kadish Anne Lockwood Managing Director and Chief Executive Officer Chief Financial and Commercial Officer • Joined Integral Diagnostics in May 2017 • Joined Integral Diagnostics in 2016 and appointed as Chief Financial Officer in September 2017 • Has held roles including C
Slide 3: FY19 Highlights
FY19 Highlights • Delivered solid growth in FY19 40.7% in operating NPAT 39.1% in operating EBITDA 29.9% in operating EPS 22.9% in operating revenue 39.1% in Statutory NPAT • Successful integration of significant acquisitions in Auckland and Geelong with both acquisitions performing in lin
Slide 4: FY19 Highlights continued
FY19 Highlights continued • Completed restructure of radiologist remuneration schemes Revised and implemented Radiologist Loan Funded Share Plan (Australia) and Option Plan (NZ) which will broaden and diversify the radiologist shareholder base FY19 plan implemented February 2019 and FY 20 plan i
Slide 5: 1. FY19 Financial performance
1. FY19 Financial performance Confidential / Draft 4
Slide 6: Delivered growth across all key financial metrics
Delivered growth across all key financial metrics Operating FY19 results delivered strong performance and successfully integrated acquisitions $ million FY19 FY18 Change ($) Change (%) Operating revenue(1) 231.0 188.0 43.0 22.9% Operating(2) EBITDA 53.0 38.1 14.9 39.1% Operating(2) EBIT 42.0 28.5 13
Slide 7: Reconciliation of operating to statutory profit
Reconciliation of operating to statutory profit $ million FY19 FY18 Change ($) Change (%) Operating NPAT 25.6 18.2 7.4 40.7% Non operating transactions net of tax Transaction costs and takeover response costs (1.9) (3.0) Share based payments (0.6) (0.1) Amortisation customer contracts (2.5) - Busine
Slide 8: FY19 Revenue
FY19 Revenue Strong FY19 growth driven by leveraging IDX's platform, investing in high end equipment and integrating acquisitions Operating revenue up 22.9% to $231m • Organic revenue growth of 7.4% and volume growth of 5% - higher than industry averages for the states in which we operate (6.1% and
Slide 9: FY19 Operating Expenditure
FY19 Operating Expenditure Leveraging the expanded platform and successfully integrating acquisitions Operating EBITDA margin of 23% across Australia and New Zealand • Expenses declined as a % of revenue across labour, consumables, equipment, and occupancy • Organic operating EBITDA margin above 20.
Slide 10: Capital Management
Capital Management Strong balance sheet with increasing net assets to support growth and acquisitions • FY19 net debt of $119m (FY18: $ million 30 Jun 19 30 Jun 18 30 Jun 17 $44.9m) Cash and cash equivalents 21.0 20.8 24.2 Trade and other receivables 9.0 5.6 5.1 2.2x Operating EBITDA prior Other c
Slide 11: Cashflow and cash conversion
Cashflow and cash conversion Strong business performance and cash conversion reflected in free cash flow growth • Normalised free cash flow conversion of 76.2% $ million FY19 FY18 (FY18 80.6%) - 97% net of replacement capex Operating EBITDA 53.0 38.1 (FY18 103.6%) Non-cash items in EBITDA (0.3) 0.0
Slide 12: Capital expenditure
Capital expenditure Major growth capex projects $ millions(1) FY19 FY18 FY17 Replacement 10.7 8.8 11.1 Growth 9.7 5.2 2.3 Depreciation 10.5 9.2 9.2 FY19 Capex of $20.4m • Replacement Capex $10.7m Replacement of ultrasounds across the business - $3m Replacement of 2* CT's in Western Australia - $
Slide 13: 2. Market update
2. Market update Confidential / Draft 12
Slide 14: Strong long-term industry growth drivers remain
Strong long-term industry growth drivers remain. The move towards higher end, higher margin modalities (CT, MRI and Nuclear Medicine) drives higher revenue vs volume growth. Industry growth 12 month rolling growth rate by services 12 month rolling growth rate by benefits 0.14 -- Long Term Average 5.
Slide 15: Regulatory environment was active in election year
Regulatory environment was active in election year Australia: July 1, 2018 • Introduction on the Medicare Benefits Schedule (MBS) of MRI Prostate items – strongly positive result for patients and referrers which has been a contributor to IDX growth in FY19 which we expect to continue MRI prostate
Slide 16: Regulatory environment was active in election year continued
Regulatory environment was active in election year continued Australia cont.: Future Expected Changes • Introduction of MBS indexation for 80% of Diagnostic Imaging (DI) services from July 2020 for a period of three years. • Introduction of new MBS codes for Breast MRI from 1 November 2019 – item nu
Slide 17: 3. Strategy
3. Strategy Confidential / Draft 16
Slide 18: IDX will operate in five key markets in FY20
IDX will operate in five key markets in FY20 Total IDX Geographic Western Victoria Queensland New Zealand Queensland Market Australia Ballarat, Geelong, Gold Coast, South West Sunshine Coast, Warrnambool Core markets Toowoomba and Western Auckland Rockhampton and outer Mackay Australia and Gladstone
Slide 19: Management’s strategy – good medicine is good business
Management’s strategy – good medicine is good business Strategy 1 Grow existing business and margin 2 Strategic acquisitions Drive organic Drivers of growth & Optimise Develop strategy efficiency Medical Disciplined execution of strategic technology Centres of by leveraging leadership acquisitions s
Slide 20: We did what we said we would do
We did what we said we would do FY19 achievements Achieved organic growth and further efficiency gains • Minimised the impact of new competitor MRI licence allocations as well as removal of GP referred knee MRI for over 50’s by implementing focussed marketing and pricing strategies, leveraging off o
Slide 21: We did what we said we would do continued
We did what we said we would do continued FY19 achievements Implemented new radiologist • Broadened and diversified the radiologist shareholder base recruitment, retention and The FY19 and FY20 Radiologist share plan was over-subscribed with 26 Radiologists incentive structures participating and c
Slide 22: FY20 – Capitalise on extensive investments
FY20 – Capitalise on extensive investments and continue to develop platform to support further growth FY20 Focus Capitalise on capital • Complete the re-development of the John Flynn Private Hospital on the Gold Coast including a investments to drive organic new PET facility growth • Install a secon
Slide 23: FY20 – Capitalise on extensive investments continued
FY20 – Capitalise on extensive investments and continue to develop platform to support further growth continued FY20 Focus Invest in recruitment and retention of highly skilled • Continue to promote the radiologist equity scheme to current and potential radiologists Radiologists, clinical and • Cont
Slide 24: Investment in Artificial Intelligence
Investment in Artificial Intelligence IDX - first to market in Australia for FDA and TGA cleared, proven Artificial Intelligence (AI) software developed by AIDoc to improve clinical workflows and ensure better patient outcomes • The AI solution analyses medical images and prioritises the patient lis
Slide 25: Impact of AASB 16 “Leases” from 1 July 2019
Impact of AASB 16 “Leases” from 1 July 2019 Based on the current lease profile as at 30 June 2019 we have estimated the likely impact of the adoption of the new leases standard will be: Balance Sheet • Recognition of right of use asset $48m-$52m • Recognition of Lease Liability $54m-$59m • Net adjus
Slide 26: Questions?
Questions? integral “A oiaenosries
Slide 27: Disclaimer
Disclaimer Some of the information contained in this presentation contains “forward-looking statements” which may not directly or exclusively relate to historical facts. These forward-looking statements reflect Integral Diagnostics Limited (IDX) current intentions, plans, expectations, assumptions a
Slide 28: Contact us
Contact us Investors & Media Dr Ian Kadish, CEO P: +61 3 5339 0704 E: ikadish@idxgroup.com.au