Healius Limited · ASX:HLS
Healius — Shareholder Meeting (February 2016)
31 slides from Healius's shareholder meeting presentation, Feb 11, 2016
Slide 1: Annual General Meeting
Annual General Meeting 28 November 2014
Slide 2: AGM agenda
AGM agenda 1 Chairman’s address: Rob Ferguson 2 Business update • The Primary business and FY2014: Andrew Duff • Medical Centres: Henry Bateman • Pathology and Imaging: James Bateman • Outlook: Andrew Duff 3 Items of business: Rob Ferguson 4 Other business: Rob Ferguson 2
Slide 3: Timeline
Timeline Primary’s services and scale have dramatically developed since 1985 1985 1998 2008 2013 1st centre opened Primary lists on ASX Acquisition of Symbion Opening of relocated (Brookvale, NSW) Revenue $12m Brookvale centre NPAT $2m 2000 Acquisition of SDS (Pathology) 2005 Acquisition of Medical
Slide 4: Our core principles
Our core principles Patients Unyielding focus on delivering affordable and accessible high-quality healthcare Practitioners Investors Partner of choice for medical professionals Attractive risk-return framework • Focus on patients not administration • Strong industry fundamentals • Attractive work /
Slide 5: Primary Health Care today
Primary Health Care today • #1 national provider of large-scale medical centres (58) Medical • Continue to increase the number of GPs, specialists and other allied health providers Centres • Significant growth opportunities – backfill existing centres, new centre rollout • Improving margins demonstr
Slide 6: Our footprint
Our footprint Primary has an Australia-wide network of providers and market-leading infrastructure1 16 Pathology Sites 12 Medical Centres 35 Imaging Sites Northern 526 Pathology Sites Territory Queensland Western Australia South 24 Medical Centres Australia 74 Imaging Sites New South 623 Pathology S
Slide 7: Health industry
Health industry Strong fundamentals underpin the growth of the Australian healthcare industry Positive demographic trends • Australia’s population forecast to grow at 1.9% p.a. from 2012 to 20241 • Number of Australians aged over 65 years expected to increase by 3.4% pa over this period1 • Highest h
Slide 8: Health industry (cont'd)
Health industry (cont’d) Demand for healthcare services reflects strong industry fundamentals Number of GP services (millions)1,2 Referral rate per GP encounter (2005 = 100)1,2 140 200 120 180 100 160 80 140 60 40 120 20 100 2005 2008 2011 2014 0 2005 2008 2011 2014 Allied Health Imaging Pathology N
Slide 9: Divisional scale
Divisional scale Divisional scale is critical to the Primary model • Scale in each of Primary’s divisions delivers: - Benefits for patients, doctors and funders - Ability to better manage funding dynamics - Range of services to offer comprehensive healthcare outcomes - Capacity to make significant i
Slide 10: Key FY2014 group financial results
Key FY2014 group financial results Year ended Year ended $m 30 June 2014 30 June 20131 Revenue 1,524.1 1,440.0 EBITDA 399.1 381.2 Net profit after tax 162.5 150.1 Earnings per share (cps) 32.2 29.9 Final dividend per share - fully franked (cps) 11.0 11.0 FY2014 result highlights • EBITDA up 4.7% to
Slide 11: Group historical earnings performance
Group historical earnings performance Strong earnings growth since FY2011 EBITDA ($m) EPS (cents per share) c.8% EBITDA CAGR c.16% EPS CAGR 32.2 cps $399m $381m 29.9 cps $351m 1 $319m 23.3 cps 2 20.7 cps FY2011 FY2012 FY2013 FY2014 FY2011 FY2012 FY2013 FY2014 Notes 1 Excludes $9m non-recurring incom
Slide 12: Medical Centres: Sector themes
Medical Centres: Sector themes GPs are the cornerstone of the Australian health care system • Demand for primary healthcare providers will continue to grow: - Demographic trends - Increasing prevalence of chronic diseases - Technological advances in medicine - Increasing breadth of GP services avail
Slide 13: Medical Centres: Our unique model
Medical Centres: Our unique model Primary’s medical centres are attractive to patients and medical practitioners Significant benefits to patients… … and medical practitioners • Community-based location • Opportunity to earn materially higher incomes via • Attractive, well-equipped and purpose-built
Slide 14: Medical Centres: Growth potential of existing centres
Medical Centres: Growth potential of existing centres Centre age profile highlights growth potential of existing centres Commentary Age profile of existing large scale centres • Revenue and profitability increase as centres mature - c.7 years to reach initial “steady state” maturity Open - Performan
Slide 15: Medical Centres: EBITDA performance
Medical Centres: EBITDA performance Strong 2H2014 EBITDA performance $200m 56.8% 58% 56.0% 54.8% 55.2% 55% $160m $91m 52% $84m $120m $81m $76m 49% $80m 46% $40m $75m $79m $84m $85m 43% $0m 40% FY2011 FY2012 FY2013 FY2014 1H EBITDA 2H EBITDA EBITDA margin (RHS) • 8.3% increase in 2H2014 over pcp desp
Slide 16: Medical Centres: Growth opportunities
Medical Centres: Growth opportunities 1 Leverage improving doctor recruitment dynamics • Capital payments to doctors continue to trend favourably • Doctor retention strong • Current trend of a significant increase in registrar numbers 2 Backfill existing centres • Newest 19 centres are currently und
Slide 17: Medical Centres: Primary IVF
Medical Centres: Primary IVF Primary IVF has surpassed initial expectations since its launch in July 2014 • IVF Medicare services are bulk-billed (i.e. no co-payment) • Initial site co-located at our George Street, Sydney medical centre • Leading fertility specialists are contracted • Initial focus
Slide 18: Health Technology
Health Technology National leader in GP software and online knowledge resources for hospitals Industry trends • Growing investment in Health IT (compared to historical underspend) • Uncertain funding environment driving need for efficiencies • Patient expectation to transact digitally (as they do el
Slide 19: Health insurance
Health insurance Transport Health acquisition provides an initial, measured platform for our broader PHI objectives Acquisition rationale • Facilitates Primary’s entry to private health insurance (PHI) market • Provides Primary with a platform for future growth - Use PHI to increase volumes of exist
Slide 20: Pathology: Our infrastructure, expertise and scale
Pathology: Our infrastructure, expertise and scale A leader in efficient and accessible high-quality pathology services • 6 State-based pathology practices • Team of over 300 specialist pathologists • Largest national footprint of collection centres and laboratories: - Provides over 1/3 of the patho
Slide 21: Pathology: Sector themes
Pathology: Sector themes Favourable industry dynamics despite funding pressures • As previously advised to market: - Industry wide volumes subdued in late FY2014, and through into 1Q FY2015 • Referral volumes have normalised in September and October 2014 • Budgetary pressures resulting in increasing
Slide 22: Pathology: Collection centres and deregulation
Pathology: Collection centres and deregulation Primary is moderating its Collection Centre (“ACC”) activities Commentary Primary’s “Like with Like” ACC market share • We are moderating our ACC activities 37.0% • Our current national market share of collection centres is in line with pre-deregulation
Slide 23: Pathology: EBITDA performance
Pathology: EBITDA performance Consistent growth in EBITDA despite weak funding environment $180m 20% 17.7% 17.7% 16.9% 16.0% $150m 16% $120m $82m $78m 12% $71m $90m $63m 8% $60m $70m $75m 4% $30m $55m $61m $0m 0% FY2011 FY2012 FY2013 FY2014 1H EBITDA 2H EBITDA EBITDA margin (RHS) • EBITDA growth sup
Slide 24: Pathology: Growth opportunities
Pathology: Growth opportunities 1 Ongoing investment in infrastructure and automation • Maintain and extend quality, and efficiency leadership 2 “Bolt-on” acquisitions plus organic growth • Early stage commencement of pathology services into Tasmania • Acquisitions used to enhance capabilities, expa
Slide 25: Imaging: Overview of our business
Imaging: Overview of our business One of Australia’s leading network of imaging practices • National network of over 150 imaging practices - Includes community, medical centre and hospital sites • Approximately 130 FTE radiologists - Many are recognised leaders / experts in their fields • Largest pr
Slide 26: Imaging: Sector themes
Imaging: Sector themes Imaging sector continues to benefit from attractive growth dynamics • Growth in demand for and utility of medical imaging services • Driven by: - Ageing demographics + increasing within age cohort intensity - Improving technology = improved diagnostics - Improving medical and
Slide 27: Imaging: Summary financials
Imaging: Summary financials Imaging division showing improving returns Year ended Year ended $m 30 June 2014 30 June 20131 Revenue 316.1 293.4 EBITDA 73.0 68.1 EBITDA margin (%) 23.1% 23.2% EBITA 45.9 40.8 EBITA margin (%) 14.5% 13.9% • 7.7% revenue growth • Strong growth in MRI revenue since Medica
Slide 28: Imaging: Growth opportunities
Imaging: Growth opportunities 1 Improving utilisation of high end technologies • November 2013 changes broadened the range of GP referrals for MRI covered by Medicare • We are seeing increasing revenues at higher end • Growth in molecular imaging 2 Ongoing focus on radiologist led practices • Contin
Slide 29: Group outlook
Group outlook FY2015 earnings guidance • EBITDA $410m-$425m • EPS growth of 5%-12% Positioned for future growth • 8 new medical centre sites identified for roll-out in mid FY2016 and beyond • Successful tender for immigration visa medical screening contract highlights outsourcing potential • Utilise
Slide 30: Items of business
Items of business 1 Receipt of Annual Financial Report 2 Adoption of Remuneration Report 3 To re-elect Mr Brian Ball as a director 4 To re-elect Dr Paul Jones as a director 5 To re-elect Mr Andrew Duff as a director 6 To re-elect Mr Henry Bateman as a director 30
Slide 31: Disclaimer
Disclaimer • This presentation has been prepared by Primary Health Care Limited (ACN 064 530 516) (‘PRY’). • Material in this presentation provides general background information about PRY which is current as at the date this presentation is made. Information in this presentation remains subject to