Sonic Healthcare Limited · ASX:SHL

Sonic Healthcare — FY2023 Earnings Presentation

24 slides from Sonic Healthcare's earnings presentation, Aug 17, 2023

  1. Slide 1: Results for the Year Ended 30 June 2023 (ASX cover letter)

    17 August 2023 The Manager – Listings Australian Securities Exchange Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2000 Via electronic lodgement Dear Sir / Madam, RESULTS FOR THE YEAR ENDED 30 JUNE 2023 Attached in accordance with Listing Rule 4.3A is the Appendix 4E for Sonic Healthcare Limit

  2. Slide 2: Financial and Operational Review

    Financial and Operational Review Year ended 30 June 2023 Dr Colin Goldschmidt CEO, Sonic Healthcare 17 August 2023

  3. Slide 3: Forward-looking Statements

    Forward-looking Statements This presentation may include forward-looking statements about our financial results, guidance and business prospects that may involve risks and uncertainties, many of which are outside the control of Sonic Healthcare. Readers are cautioned not to place undue reliance on f

  4. Slide 4: Headlines

    Headlines A$M (Statutory) FY 2023 FY 2022 Change Base business* revenue 7,684 6,912 11% COVID revenue 485 2,428 (80)% Total Revenue 8,169 9,340 (13)% EBITDA 1,708 2,830 (40)% Net Profit 685 1,461 (53)%  Revenue and earnings comparisons with FY 2022 impacted materially by reduction in COVID revenue

  5. Slide 5: FY 2024 Guidance

    FY 2024 Guidance  Guidance  EBITDA A$1.7 – 1.8 billion  Equates to up to 5% growth on FY 2023 EBITDA, with base business performance offsetting material reduction in COVID-related earnings  Interest expense to increase by ~25%, reflecting recently announced acquisitions  Effective tax rate 25 –

  6. Slide 6: Earnings Growth

    Earnings Growth  Transitioning from high volume COVID testing environment to intense focus on base business revenue and earnings growth  H2 FY 2023 margins impacted by legacy COVID-related labour and infrastructure costs  Major drivers and initiatives locked in for earnings growth in FY 2024 and

  7. Slide 7: AI and Digital Pathology Strategy

    AI and Digital Pathology Strategy  AI to transform pathology and radiology through step-change gains in efficiency, quality and capacity in coming years  Digital pathology (digitisation in anatomical pathology)  Sonic Healthcare is one of the world’s largest anatomical pathology providers with an

  8. Slide 8: Dividends

    Dividends Dividend History – 30 Years A$ FY 2023 FY 2022 Growth $1.10 Interim Dividend $0.42 $0.40 5% $1.00 $0.90 Final Dividend $0.62 $0.60 3% $0.80 Total Dividends $1.04 $1.00 4% $0.70 $0.60 A$ $0.50  Final dividend franked to 100% $0.40 $0.30  Record Date 7 September 2023 $0.20  Payment Date 2

  9. Slide 9: Capital Management

    Capital Management Debt Cover History 3.5 30 June 30 June 2023 2022 3.0 2.5 Net interest-bearing debt A$M 886 812 2.0 Ratio (X) Equity A$M 7,922 7,428 1.5 Debt cover X 0.6 0.3 1.0 Gearing ratio % 9.9 9.7 0.5 0.0 Interest cover X 29.4 47.3 12 months ended  Increase (A$74 million) in net debt include

  10. Slide 10: Revenue

    Revenue  Base business revenue  COVID revenue  11% base business revenue growth  80% reduction on FY 2022 (peak COVID testing year)  7% organic growth on FY 2022 (6% in H1, 9% in H2)  FY 2023 split: H1 A$379 million, H2 A$106 million  13% organic growth on FY 2019 (pre-pandemic)  COVID testi

  11. Slide 11: FY 2023 Revenue Split

    FY 2023 Revenue Split SCS/Other A$382M 5% Radiology NZ A$796M A$29M 10% USA Belgium A$2,114M A$155M 26% 2% Switzerland A$595M 7% Revenue in A$ millions UK Total Revenue A$8,169 million (including A$14 A$595M million interest) 7% SCS / Other = Sonic Clinical Services (IPN Medical Centres, Sonic Healt

  12. Slide 12: USA

    USA  FY 2023 base business revenue (constant currency)  Base business organic growth 4%  Operations  Excluding acquisitions, workforce maintained at below pre-pandemic levels  Ongoing strong Thyroseq revenue growth (exclusively licensed thyroid cancer genetic test)  Successful implementation o

  13. Slide 13: Australian Pathology

    Australian Pathology  FY 2023 base business revenue  Base business organic growth 11%  Strong growth from specialists, driving anatomical pathology and genetic testing  Operations  Sonic selected as only private laboratory for landmark national cancer genomics profiling study (PrOSPeCT) to enab

  14. Slide 14: Germany

    Germany  FY 2023 base business revenue (constant currency)  Base business organic growth 10%  Strong organic growth from specialists, driving anatomical pathology, molecular and genetic testing  Operations  Two regional laboratory mergers completed with further mergers planned for Hamburg and M

  15. Slide 15: German Acquisitions

    German Acquisitions  Diagnosticum Laboratory Group  Annual revenue ~€65 million (~A$110 million)  Closing of acquisition expected Q2 FY 2024  Highly complementary footprint with laboratories across eastern Germany offering broad range of testing, including genetics  Medical Laboratories Duessel

  16. Slide 16: UK

    UK  FY 2023 base business revenue (constant currency)  Base business organic growth 6% following 24% growth in FY 2022  Strong private and NHS base business growth  Operations  Contract for 15-year UK NHS laboratory outsourcing (Hertfordshire and West Essex) now in final governance process  Aw

  17. Slide 17: Switzerland

    Switzerland  FY 2023 base business revenue (constant currency)  Base business organic revenue growth 1%  Fee cut from 1 August 2022 – effective impact ~7% on total revenue  Strong organic volume growth, including market share gains, offsetting impact of fee cut  Operations Switzerland A$595M 

  18. Slide 18: Swiss Acquisition of Synlab Suisse

    Swiss Acquisition of Synlab Suisse  Synlab Suisse  Annual revenue ~CHF 100 million (~A$175 million)  Settled 3 July 2023  Business currently at breakeven profitability level  Highly complementary footprint of 19 laboratories across all 3 Swiss language regions  Integration and synergy plans we

  19. Slide 19: Belgium

    Belgium  FY 2023 base business revenue (constant currency)  Base business organic growth 12%  Strong growth augmented by fee indexation (6% effective 1 January 2023)  Operations  New Antwerp central lab workflow and automation successfully completed Belgium A$155M 2% Sonic Healthcare Results FY

  20. Slide 20: Radiology

    Radiology  FY 2023 revenue and earnings  Revenue growth 13%  Organic revenue growth 11%  EBITDA growth 20%  Margin expansion of ~150 bps Radiology A$796M 10%  Operations  Improved same site revenues underpinned by brownfield expansions (MRI, CT, PET CT)  Focus on cost control augmenting marg

  21. Slide 21: Sonic Clinical Services (SCS)

    Sonic Clinical Services (SCS)  FY 2023 revenue and earnings  Revenue down 10%, mainly due to cessation of COVID-related services  Revenue improving in H2 due to increasing doctor hours and private billing by GPs SCS/Other A$382M  Decline in earnings reflecting lower revenue 5%  Operations  Pos

  22. Slide 22: Sustainability

    Sustainability  Progress on key short-term goals  Sustainability clauses added to new supplier contracts – completed  Submission of Climate Disclosure Project (CDP) questionnaire – completed  Global scope 3 (value chain) emissions inventory – in progress  Baseline Qualitative Taskforce for Clim

  23. Slide 23: Summary

    Summary  Strong organic base business revenue growth gaining momentum  6% in H1 FY 2023, 9% in H2 FY 2023  Organic revenue growth enhanced by  Market strength, particularly in specialist and hospital market segments  Exclusive rights to novel diagnostic tests (Thyroseq®, OncotypeDX®, Microba et

  24. Slide 24: Thank you

    Sy SONIC SY HEALTHCARE Thank you

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