Integral Diagnostics Ltd · ASX:IDX
Integral Diagnostics — Shareholder Meeting (November 2016)
23 slides from Integral Diagnostics's shareholder meeting presentation, Nov 18, 2016
Slide 1: Integral Diagnostics Limited Annual General Meeting 2016
Integral Diagnostics Limited ANNUAL GENERAL MEETING 20 16 CEO Address to Shareholders
Slide 2: Business Overview
BUSINESS OVERVIEW Leading • >1 million scans per annum diagnostic • Network of 45 sites including 13 hospital sites imaging • 3 brands: Lake imaging, South Coast Radiology, Global Diagnostics provider • Over 65s in Australia forecast to grow at a compound annual growth Servicing a rate (CAGR) of 3.0
Slide 3: FY16 Operational Achievements
FY16 OPERATIONAL ACHIEVEMENTS Growth consistent with IDX’s key strengths in hospital and higher value modalities • Acquired Western District Radiology and the remaining 50% interest in South West MRI • Opened new site at Sunbury in Apr 2016 - Comprehensive site and only current provider of MRI servi
Slide 4: FY16 Operational Achievements
FY16 OPERATIONAL ACHIEVEMENTS Growth consistent with IDX’s key strengths in hospital and higher value modalities • Relocated to new premise at Ocean Grove (VIC) in Dec 15 providing increased capacity to meet growing demand in the Bellarine Peninsula region • New premises at Toowoomba (Queensland) op
Slide 5: Strategic Acquisition Consistent with Growth Strategy
STRATEGIC ACQUISITION CONSISTENT WITH GROWTH STRATEGY • Acquired Western District Radiology and the remaining 50% interest in South West MRI - Long term lease and existing strong working relationship with St John of God Hospital - Revenue of the two businesses is $4.3m and EBITDA of $1.2m p.a. - Com
Slide 6: FY16 Financial Performance
FY16 FINANCIAL PERFORMANCE • Results in line with FY16 guidance provided at the time of our 1H16 results - 2H16 financial performance above 1H16 - FY16 Prospectus forecast not achieved due to slower industry growth following unforeseen changes to industry referral patterns • Statutory FY16 result -
Slide 7: Growing Revenue
GROWING REVENUE • Revenue up 4.9% to $167.8m Pro-forma revenue ($m) - MRI, CT & XR volume growth 167.8 160.0 above industry (Medicare data) 149.9 - Organic growth across all 138.7 businesses - Short term industry uncertainty reduced referral patterns from November 2015 • Despite industry headwinds I
Slide 8: Growing Earnings
GROWING EARNINGS Pro-forma EBITDA ($m) 34.6 34.9 • EBITDA up 0.9% to $34.9m 30.7 - Expense growth in line with budget and Prospectus 25.6 forecasts - Full year impact of new radiologists employed late FY15 • Investment in staff and systems to support future growth FY2013 FY2014 FY2015 FY2016 7
Slide 9: LT Demand Underpinned by Aging Population
LT DEMAND UNDERPINNED BY AGING POPULATION And here they are! The Baby-boomers! But note, also, that the Baby-boomers had kids – so there is another cohort following through • As the baby boomers move through their 60s and beyond, they increase demand on the health system • The inflection point where
Slide 10: Strategic Focus
STRATEGIC FOCUS • Growing existing business and expand capacity Market • Investment in sites such as Toowoomba and Ocean Grove delivering share an improved range of services and increased patient examination • Technology and systems investment to improve efficiency and Improve outcomes for patients
Slide 11: Trading Conditions Over First 4 Months of FY17
TRADING CONDITIONS OVER FIRST 4 MONTHS OF FY17 • Continued inconsistency in referral patterns - Medicare data shows broader volumes recovering from slow down experienced at end of CY15 - However, while volumes have been increasing, they are still highly volatile - Increased competition in select are
Slide 12: 5 Year Contract Secured with WACHS
5 YEAR CONTRACT SECURED WITH WACHS • Renewed and expanded contract with Western Australian Country Health Services (WACHS) to provide radiology reporting and procedural services (Services) at selected sites, has been renewed and expanded • Under the agreement, Integral Diagnostics will continue to p
Slide 13: Outlook
OUTLOOK • If the 4 months to October referral trend continues, it is likely that we will generate modestly lower FY17 earnings when compared to FY16 - HY17 earnings expected to be c10% below HY16 (after removing the abnormal fair value gain related to the full acquisition of SWMRI) - Broader volumes
Slide 14: Delivering on FY17 Outlook
DELIVERING ON FY17 OUTLOOK • Expect H2 to be stronger than H1 • Assumes referral patterns continue on similar trend to first 4 months • Key initiatives / priorities underpinning H2 growth and our FY17 earnings expectations: - Increased services in existing WACHS regions - Benefits flowing from effic
Slide 15: 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 16: 2016 AGM Speech by John Livingston, Managing Director & CEO
Release to the Australian Securities Exchange Integral Diagnostics Limited 2016 Annual General Meeting Speech delivered by John Livingston, Managing Director & CEO Cover slide Thank you Helen. I am pleased to be presenting to you today at our first AGM as a listed company. As you’ll see from this
Slide 17: Speech: increasing demand from an aging population
We operate in an industry that will see increasing demand coming from an aging population requiring access to high quality medical services to keep them healthy and productive members of the community. Part of our community obligation is to continue to promote and advance the capabilities for early
Slide 18: Speech: prostate cancer and acquisition
prostate cancer, which is projected to be the most commonly diagnosed cancer in Australia this year according to the estimations of Cancer Australia. We are investing for growth and will continue to invest in new equipment to both expand our services and replace equipment as it reaches the end of it
Slide 19: Speech: revenue growth above industry
The growth in revenue was largely driven by the business’ higher than industry growth in the states in which we operate when compared with the Medicare data for MRI, CT and X- Ray. Our ability to grow above market reflected the greater share of more specialised scans undertaken in our hospital and a
Slide 20: Speech: baby boomers and strategic focus
Furthermore this is not a one off – the baby boomers had children – so a one off but permanent increase in the demand for healthcare services is now coming into effect and will drive a substantial increase in demand over the long term. Slide 9 In line with the underlying long term growth in the he
Slide 21: Speech: investing in growth and managing costs
As you saw on the earlier slides, there is substantial long term demand for health services now building. We believe Integral Diagnostics is well placed to address this demand, and we believe it is important to continue investing in staff, systems and equipment to support long term growth. However,
Slide 22: Speech: regulatory environment and Medicare rebates
Once implemented the government will, subject to the outcomes of the review, fund $50m per annum back into the Diagnostic Imaging Services Table for services that will improve access to affordable and safe scans and imaging procedures. To date clarity on implementation and any further information on
Slide 23: Thank you for your time today
Thank you for your time today. I am happy to answer any questions from shareholders. -ENDS- John Livingston CEO Integral Diagnostics Limited 18 November 2016 8
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