Medibank Private Ltd. · ASX:MPL
Medibank Private — Macquarie Australia Conference 2015
21 slides from Medibank Private's conference presentation, May 8, 2015
Slide 1: George Savvides – Managing Director, Macquarie Australia Conference
George Savvides – Managing Director Macquarie Australia Conference, 8 May 2015
Slide 2: Important Notice
IMPORTANT NOTICE The information contained in this presentation is for information purposes only. The information contained in this presentation is not investment or financial product advice and has been prepared without taking into account the investment objectives, financial situation or particula
Slide 3: Introduction to Medibank
INTRODUCTION TO MEDIBANK 1
Slide 4: Private health insurance at the core, but a differentiated approach
PRIVATE HEALTH INSURANCE AT THE CORE, BUT A DIFFERENTIATED APPROACH Pro forma forecast FY15 revenue1 $6.6 billion Health Insurance Health Insurance 90% Reporting segments Complementary Services Complementary Services 10% Two brands Active health provider Population health Differentiators relationshi
Slide 5: Organisation structure: aligned with strategy, clear accountabilities
ORGANISATION STRUCTURE: ALIGNED WITH STRATEGY, CLEAR ACCOUNTABILITIES George Savvides Managing Director David Koczkar Dr Andrew Wilson Paul Koppelman Kylie Bishop Chief Operating Officer EGM Provider Networks Chief Financial Officer EGM People & Culture and Integrated Care • PHI (product, service, •
Slide 6: Recent Financial Performance
RECENT FINANCIAL PERFORMANCE 2
Slide 7: Clear focus on profitable growth
CLEAR FOCUS ON PROFITABLE GROWTH 1H15 Pro forma Health Insurance Drivers of Health 1H15 Pro forma operating profit Insurance result Health Insurance metrics #1 Premium revenue $2,943m $173m ● Population growth $(235)m 5.9% Premium revenue ● Policyholder retention and growth $(2,535)m 8.0% growth of
Slide 8: Largest player in an attractive market
LARGEST PLAYER IN AN ATTRACTIVE MARKET 35% Australian PHI market1 (total policyholders, 30 June 2014) 30% 29.1% 26.7% Others Members 5% 25% Own 2 Market share (30 June 2014)1 20% 20% 15% Top 4 74% 10.8% 10% 7.7% 7.4% 5% 3.2% 28 funds =15.1% 2 not shown 0% 3 2,3 2 Source: PHIAC, Operations of Private
Slide 9: Steady gross margin against downward industry trend
STEADY GROSS MARGIN AGAINST DOWNWARD INDUSTRY TREND Health Insurance gross margin: Top 6 vs. rest of industry1 20% 18% 2 16% 14% 12% Rest of Industry3 10% 8% 6% FY11 FY12 FY13 FY14 Source: PHIAC 1. The gross margin includes Australian residents only. 2. Bupa FY14 margin has been adjusted to reflect
Slide 10: Strong reduction in MER, but differentiate good and bad costs
STRONG REDUCTION IN MER, BUT DIFFERENTIATE GOOD AND BAD COSTS Health Insurance management expense ratio: Top 6 vs. rest of industry1 12% 11% 10% 9% Rest of Industry2 8% 7% 6% FY11 FY12 FY13 FY14 Source: PHIAC 1. The management expense ratio includes Australian residents only. 2. Rest of industry rep
Slide 11: Operating profit margin expansion; top tier is our benchmark
OPERATING PROFIT MARGIN EXPANSION; TOP TIER IS OUR BENCHMARK Health Insurance operating profit margin: Top 6 vs. rest of industry1 8% 2 6% 4% 2% Rest of Industry3 0% FY11 FY12 FY13 FY14 -2% Source: PHIAC, Medibank 1. The operating profit margin includes Australian residents only. 2. Bupa FY14 margin
Slide 12: Clear track record of delivering operating profit growth
CLEAR TRACK RECORD OF DELIVERING OPERATING PROFIT GROWTH Pro forma Health Insurance operating profit 350 300 250 200 ($m) 150 100 50 0 FY12 FY13 FY14 FY15 Prospectus 1 forecast 1. FY15 Propectus forecast operating profit adjusted to include $14m for release of 30 June 2014 provision net of risk equa
Slide 13: Strategy
Hospital & Extras Package Victoria Hospital & Extras Package Northern Territory Hospital & Extras Package Queensland * ety % % os Pndind Hospital & Extras Package Tasmania $ ~ RY Health Insurance 2008 - 2014 Health Insurance - Extras Victoria Health Insurance - Extras Northern Territory Health Insur
Slide 14: The changing industry landscape
THE CHANGING INDUSTRY LANDSCAPE A combination of factors are putting some pressures on the private health insurance industry Healthcare costs are escalating, faster than CPI or increases in PHI premiums Consumers and their behaviour are changing: increasingly value seeking Aggregators continue to ta
Slide 15: Medibank's approach to sustaining profitable growth
MEDIBANK’S APPROACH TO SUSTAINING PROFITABLE GROWTH The ‘core’ Medibank retail Health Insurer Optimise current business (HI) Medibank corporate Evolve Re-shape the cost curve; Health Medibank overseas Integrated care; Assurance (HA) Health & wellbeing; ahm Quality-based purchasing Complementary Cont
Slide 16: Health assurance: impacting the entire customer value chain
HEALTH ASSURANCE: IMPACTING THE ENTIRE CUSTOMER VALUE CHAIN Traditional health insurers play at the ends of the value chain Health assurers play across the entire value chain: have ability to influence different parts of the care chain to meet the needs of their customers Getting Receiving Insurance
Slide 17: Fragmented health system offers significant opportunities to save costs
FRAGMENTED HEALTH SYSTEM OFFERS SIGNIFICANT OPPORTUNITIES TO SAVE COSTS Source: http://www.aihw.gov.au/australias-health/2014/health-system/. 17
Slide 18: Different segments need tailored solutions
DIFFERENT SEGMENTS NEED TAILORED SOLUTIONS Proportion of PHI Proportion of PHI Segmentation by illness members hospital benefit outlays Catastrophic conditions • Extremely heavy health care users with significant costs Multiple chronic conditions • Heavy users ; costs well above average, at risk for
Slide 19: Strategy for sustainable growth and shareholder value creation
STRATEGY FOR SUSTAINABLE GROWTH AND SHAREHOLDER VALUE CREATION 1 Profitable revenue growth through Health Insurer disciplined customer acquisition and Optimise current business retention initiatives 2 Health Assurance Re-shape the cost curve; Active enhancement of Health Insurance Integrated care; u
Slide 20: Summary
SUMMARY • Changing industry landscape: past is not the future • Nearer term focus on high performance PHI • Medium to longer term focus on evolution to health assurer enables us to − impact the entire customer value chain − bend the cost curve − drive better health outcomes for members Medibank has
Slide 21: Q&A
Q&A medibank For Better Health
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