Sonic Healthcare Limited · ASX:SHL
Sonic Healthcare — Shareholder Meeting (November 2004)
21 slides from Sonic Healthcare's shareholder meeting presentation, Nov 25, 2004
Slide 1: Annual General Meeting
Annual General Meeting 25 November 2004 Dr Colin Goldschmidt Managing Director
Slide 2: Sonic Healthcare Current Status
Sonic Healthcare Current Status • Company in excellent shape • Record financial results FY 2004 • On target to achieve FY 2005 guidance • Larger entities showing strong earnings growth • German acquisition outperforming • Major new growth prospects in UK
Slide 3: FY 2004 Highlights
FY 2004 Highlights • Revenue growth 6.4% • Core NPAT growth 17.6% • Core EPS growth 14.8% • EBITA margin expansion 1.1% (110 basis points) • Full year dividend 30 cents per share (up 20%) • Five year funding agreements in place in Australia • Sonic enters German pathology market • Expanding UK patho
Slide 4: 2004 Guidance Delivered
2004 Guidance Delivered Full Year 2004 Sonic Guidance Actuals $M $M Revenue 1,020 - 1,035 1,037 EBITA 185 - 195 197 Sonic 2004 guidance unchanged since first released in August 2003
Slide 5: FY 2005 Guidance Unchanged
FY 2005 Guidance Unchanged 2004 Actuals 2005 Guidance Growth* $M $M % Revenue 1,037 1,290 – 1,330 26.3% EBITA 197 235 -245 21.8% 2005 Guidance ! Growth* calculated using mid-point of 2005 guidance ! Includes full year of Schottdorf ! Includes IPN estimate from 26.8.04 ! Intangibles amortisation $64
Slide 6: Trading Update
Trading Update 4 Months to 31 October, 2004 • Revenue and earnings in line with FY ‘05 guidance • On target to achieve revenue and earnings forecasts • German business tracking strongly since acquisition
Slide 7: Revenue
Revenue 2004 2003 Growth ($M) ($M) (%) Total Revenue 1,037.4 974.8 6.4% • Acquisitions completed in FY 2004/5 – Omnilabs, SDSG Radiology, Schottdorf (29 June 2004) – IPN (August 2004) – Accord Diagnostics (completion pending) • Organic revenue growth (excluding acquisitions) ~ 6% – Australian pathol
Slide 8: SHL Annual Revenue
SHL Annual Revenue 1,400 1,200 1,000 800 $M 600 400 200 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005(F) Revenue ($M) 33 41 47 58 89 133 147 174 387 628 860 975 1,037 1,310
Slide 9: Strong Earnings Growth
Strong Earnings Growth FY 2004 FY 2003 Movement EBITA ($M) 196.6 173.1 13.5% Core NPAT ($M) 117.0 99.5 17.6% Core EPS (cents) 43.4 37.8 14.8% Cash Generation ($M) 156.3 137.4 13.8% Nine consecutive years of double-digit EPS growth! Core = Before Amortisation of Intangibles
Slide 10: Earnings Margin Growth
Earnings Margin Growth FY 2004 FY 2003 Movement (%) (%) (basis points) EBITA Margin 18.9% 17.8% +110 bps EBITDA Margin 23.0% 21.9% +110 bps • Strong margin growth in FY 2004 • Local entity cost management – Outstanding management teams throughout Sonic – Stability and commitment of CEOs, managers, p
Slide 11: Sonic EBITA Margin Expansion
Sonic EBITA Margin Expansion 20% 19% 18.9% 18% 17.8% 17% 17.0% 16% 15% 14% 2002 2003 2004 FY 2005 margins will be diluted by Schottdorf and IPN
Slide 12: Full-year Dividend
Full-year Dividend 2004 2003 Change Full Year Dividend $0.30 $0.25 20% • Growth in dividends continues to increase • Fully franked to 30% • Reflects ongoing strong cash flow in Sonic
Slide 13: Full-year Dividend History
Full-year dividend 10 Year History 35 30 25 Cents 20 per Share 15 10 5 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Dividend (cents) 3 4 5 9 14 15 17 20 25 30
Slide 14: Debt Summary
Debt Summary 30.6.04 30.6.03 Total Interest-bearing Debt $M 641.3 561.3 Gearing (Net IB Debt / Equity) % 74 64 Net Interest-bearing debt / EBITDA X 2.62 2.50 Interest Cover (EBITDA / Net Interest) X 6.98 5.93 • New $700 million senior debt facility – Expected to be finalised by mid-December • Benefi
Slide 15: Australian Diagnostic Funding Agreements
Australian Diagnostic Funding Agreements • Pathology Funding Agreement – New agreement commenced 1 July 2004 – 5 year term – 5% compound industry growth rate – 3% fee increase awarded in November 2003 • Radiology Funding – New agreement commenced 1 July 2003 – 5 year term – 5% average compound indus
Slide 16: IPN
IPN • Sonic’s partial bid for IPN successful – Sonic equity now ~72% – Acquisition cost ~$43 million • IPN to remain independent – Independently listed – Independently managed – Sonic Board representation (Chairman Colin Jackson) • Pathology referrals – Potential to capture additional pathology refe
Slide 17: 27 Operating Companies
27 Operating Companies 14 Pathology Companies 9 Radiology Companies 1. Douglass Hanly Moir Pathology 1. Queensland X-Ray 2. Sullivan Nicolaides Pathology 2. SKG Radiology 3. Melbourne Pathology 3. Castlereagh Imaging 4. Diagnostic Medlab 4. Hunter Imaging Group 5. The Doctors Laboratory 5. Mercy Rad
Slide 18: U.K. Pathology
U.K. Pathology • Three transactions to date – TDL acquisition – Omnilabs acquisition – TDL-UCLH joint venture • TDL business stable and strong – Double digit revenue growth – Merger synergies from Omnilabs acquisition • Relocation to new laboratory and UCLH merger – Completed successfully in late 20
Slide 19: Sonic Expands into Germany
Sonic Expands into Germany • Sonic acquires 56% of The Schottdorf Group – 44% held by Dr Bernd Schottdorf (founding pathologist) • Schottdorf Group – One of Germany’s largest pathology groups – Main lab near Munich, largest lab in Europe – Operations throughout Germany – Outstanding services, highly
Slide 20: Schottdorf Group Key Investment Features
Schottdorf Group Key Investment Features • Leading market position – One of four major national operators • Growth and profitability – Ongoing volume growth – Growth of new doctors – Revenue and earnings growth • Strong reputation • Long-standing customer relationships • Efficient workflow and logis
Slide 21: Future Growth
Future Growth • Australia – Market growth in diagnostics ~5% p.a. – Market share growth, especially pathology – Synergistic acquisitions – Marginal profit from revenue growth • New Zealand – Market growth – Market share growth • U.K. - TDL – Ongoing private pathology growth – Further joint ventures
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