Spire Healthcare Group Plc · LSE:SPI
Spire Healthcare — H1 2017 Earnings Presentation
31 slides from Spire Healthcare's earnings presentation, 2017
Slide 1: 2017 Half Year Results Presentation
2017 Half Year Results Presentation www.spirehealthcare.com
Slide 2: Disclaimer
Disclaimer These materials contain certain forward-looking statements relating to the business of Spire Healthcare Group plc (the “Company”), including with respect to the progress, timing and completion of the Company’s development, the Company’s ability to treat, attract, and retain patients and c
Slide 3: Agenda
Agenda Overview 1 Simon Gordon, Interim CEO Financial Review 2 Andrew Goldsmith, Interim CFO Business Review 3 Simon Gordon, Interim CEO 3 www.spirehealthcare.com
Slide 4: Overview
1 Overview Simon Gordon, Interim Chief Executive Officer 4 www.spirehealthcare.com
Slide 5: H1 performance overview
Overview H1 performance overview Spire’s H1 2017 performance was in line with expectations and outlook Underlying financial & cash flow performance was positive, strong capital investment maintained Revenue increased 3.8% to £456.6m, with underlying growth in 2 of our 3 payor categories EBITDA
Slide 6: Business development
Overview Business development We continued to develop our asset base and service offering We opened two new major hospitals, on time and budget - Spire Manchester in January 2017 and Spire Nottingham in April 2017 We added a net seven new operating theatres to the Spire network – now 133 in tota
Slide 7: Financial Review
2 Financial Review Andrew Goldsmith, Interim Chief Financial Officer 7 www.spirehealthcare.com
Slide 8: Trading headlines H1 2017
Financial Trading headlines Review H1 2017 H1 2017 performance was in line with expectations Revenue up overall by 2.4% on H1 2016 to £481.0m Underlying revenue growth of 3.8% with growth in Self Pay and NHS payor categories EBITDA margin of 17.3% in line with guidance for the full year Marg
Slide 9: "Underlying" vs "Total"
Financial “Underlying” vs “Total” Review H1 2017 Spire St Anthony’s - has undergone significant cost base restructuring in H1 Spire Manchester – transitioned from original site to new site during January Spire Nottingham – opened in late April and in ramp-up phase Lifescan – product withdraw
Slide 10: Financial highlights H1 2017
Financial Financial highlights Review H1 2017 H1 2017 H1 2016 Growth £m £m % Underlying Revenue 456.6 439.9 3.8% Non Underlying Revenue 24.4 29.6 (17.6)% Group Revenue 481.0 469.5 2.4% H1 2017 Underlying Revenue mix H1 2016 Underlying Revenue mix 10 www.spirehealthcare.com
Slide 11: Financial highlights H1 2017
Financial Financial highlights Review H1 2017 H1 2017 H1 2016 Growth £m £m % Underlying EBITDA 82.8 81.7 1.3% Non Underlying EBITDA 0.4 2.8 (85.7)% Group EBITDA 83.2 84.5 (1.5)% H1 2017 H2 2016 H1 2016 Underlying EBITDA margin 18.1% 18.2% 18.6% Non Underlying EBITDA margin 1.4% (0.8)% 9.5% EBITDA ma
Slide 12: Revenue and admissions growth – Underlying
Financial Revenue and admissions growth – Review Underlying Revenues H1 2017 H1 2016 Underlying Total Group £m £m growth % growth % PMI 204.1 205.4 (0.6)% (0.6)% Self pay 88.7 77.8 14.0% 10.7% NHS 148.8 140.5 5.9% 3.5% Other 15.0 16.2 (7.4)% (7.7)% Total revenues 456.6 439.9 3.8% 2.4% Admissions H1
Slide 13: NHS revenues analysis – Underlying
Financial NHS revenues analysis – Review Underlying Underlying revenues H1 2017 H1 2016 Growth % £m £m eReferral 124.5 113.0 10.2% NHS Local Contract 24.3 27.5 (11.7)% NHS total revenues 148.8 140.5 5.9% Underlying revenue growth rate H1 2017 H2 2016 H1 2016 % % % eReferral 10.2% 15.6% 15.7% NHS Loc
Slide 14: Revenue bridge by payor – Underlying
Financial Revenue bridge by payor – Review Underlying Underlying revenues H1 2016 Volume Rate OPD H1 2017 £m £m £m £m £m PMI 205.4 (5.2) 4.6 (0.7) 204.1 Self pay 77.8 5.2 4.0 1.7 88.7 NHS 140.5 1.7 5.1 1.5 148.8 Totals 423.7 1.7 13.7 2.5 441.6 (Group revenue excl. other revenues) Day case % admissio
Slide 15: Trading margin analysis – Underlying
Financial Trading margin analysis – Review Underlying Costs as % revenues H1 2017 H1 2016 FY 2016 % % % Clinical staff costs 18.0% 17.7% 18.1% Direct costs 21.9% 22.0% 21.8% Medical fees 11.2% 11.4% 11.4% Cost of sales 51.0% 51.1% 51.3% Costs as % revenues – Underlying H1 2017 H1 2016 FY 2016 % % %
Slide 16: Cash flow impact of Paterson settlement
Financial Cash flow impact of Review Paterson settlement H2 2017 FY 2018 Costs of £27.6m associated with Settlement Insurance disputes expected to be provided for in H1 2017 resolved Cash outflow of Settlement costs expected Unlock up to £30m insurance during H2 2017 recoverable (before costs) 16 ww
Slide 17: Cash flow for the period
Financial Cash flow for the period Review H1 2017 H1 2016 £m £m Operating cash flow before exceptionals and tax 81.2 94.9 Exceptional items (4.9) (2.8) Taxation (0.6) (3.2) Net cash used in investing activities (59.1) (71.5) Net cash used in financing activities (19.6) (19.6) Net increase / (decreas
Slide 18: Cash flow for the period
Financial Cash flow for the period Review H1 2017 H1 2016 £m £m Operating cash flow before exceptionals and tax 81.2 94.9 EBITDA 83.2 84.5 Cash conversion of EBITDA 97.6% 112.3% 18 www.spirehealthcare.com
Slide 19: Business Review
3 Business Review Simon Gordon, Interim Chief Executive Officer 19 www.spirehealthcare.com
Slide 20: UK healthcare environment
Business UK healthcare environment Review NHS rationing and restricting of elective care provides medium term opportunity In the absence of heavily increased funding from the new Government, the NHS will experience a significant & growing funding gap up to the next election and beyond The NHS is
Slide 21: Our business strategy
Business Our business strategy Review Our evolving strategy is based on five pillars, and aims to build value by offering a broad range of elective treatments, more efficiently, to an increasing number of patients Customer Strategy – Our patients are at the heart of what we deliver every day, and
Slide 22: Growth engine – our payor groups
Business Growth engine – Review our payor groups H1 2017 Outlook for H2 2017 and beyond The PMI market: was relatively static with The PMI market: PMI growth will remain continuing downward pressure on the muted in the short to medium term, but we number of lives covered, together with believe c
Slide 23: Growth engine – recent hospital developments
Business Growth engine – Review recent hospital developments Recovery at Ramp-up of Ramp-up of Spire St Anthony’s Spire Manchester Spire Nottingham Focus in H1 2017 on Good consultant Good consultant building orthopaedic acquisition following move engagement - including in business; increased
Slide 24: Growth engine – new hospital planned
Business Growth engine – Review new hospital planned We demonstrate our continuing commitment to growth with our new Milton Keynes facility, expected to cost c. £70m and to open to patients in H1 2020 Milton Keynes is a truly excellent site for a Spire hospital Central location and continually i
Slide 25: Operational excellence
Business Operational excellence Review Our key areas of focus - ensuring patient safety, customer satisfaction and ease of doing business – will also deliver significant business efficiencies Developing new tools to enhance workforce planning – ensuring optimal use of clinical skills within the bu
Slide 26: Our people
Business Our people Review We continue to improve our employee and consultant propositions Reward and benefits – ensuring pay and benefits benchmark well to deliver retention and be the employer of choice, enhancing recruitment success Competencies and performance – creating a clinical and non-c
Slide 27: Clinical quality
Business Clinical quality Review Care Quality Commission All Spire hospitals and 2 clinics have Spire Healthcare - CQC Results now undergone a CQC or equivalent (by Domain) inspection* - 36 reports published Our facilities are mainly rated ‘Good’ (22 hospitals & clinics) or ‘Outstanding’ (2 hosp
Slide 28: Outlook
Business Outlook Review Revised outlook for FY 2017 Although trading performance for H1 2017 was in line with expectations, Spire has seen significantly lower than anticipated revenues in July and August 2017 - this recent trend in performance appears to be continuing into early September While
Slide 29: Spire's business proposition unchanged
Business Spire’s business Review proposition unchanged Spire remains well positioned to capture a growing share of an expanding UK private healthcare market Market opportunity arising from persistent and growing demand & supply gap Well-positioned through a network of well-invested and scalable hosp
Slide 30: Questions
Questions 30 www.spirehealthcare.com
Slide 31: 2017 Half Year Results Presentation
2017 Half Year Results Presentation www.spirehealthcare.com
Spire Healthcare Group — H1 2017 Earnings Presentation on 6ix