Sonic Healthcare Limited · ASX:SHL

Sonic Healthcare — H1 FY2024 Earnings Presentation

22 slides from Sonic Healthcare's earnings presentation, Feb 20, 2024

  1. Slide 1: Financial and Operational Review

    Financial and Operational Review Half-year ended 31 December 2023 Dr Colin Goldschmidt CEO, Sonic Healthcare 20 February 2024

  2. Slide 2: Forward-looking Statements

    Forward-looking Statements This presentation may include forward-looking statements about our financial results, guidance and business prospects that may involve risks and uncertainties, many of which are outside the control of Sonic Healthcare. Readers are cautioned not to place undue reliance on f

  3. Slide 3: Headlines

    Headlines A$M H1 FY 2024 H1 FY 2023 Change (Statutory) Base business* revenue 4,267 3,703 15% COVID revenue 39 379 (90)% Total Revenue 4,306 4,082 5% EBITDA 737 920 (20)% Net Profit 202 382 (47)% Cash generated from operations 452 785 (42)% Earnings per share (A$ cents) 42.6 80.9 (47)%  H1 FY 2024

  4. Slide 4: Revenue

    Revenue 5 0.04  H1 FY 2024 base business revenue organic growth 4 1.34 0.38 1.17  Up 6% on H1 FY 2023  Up 14% on H1 FY 2020 (pre-pandemic)  COVID revenue down 90% on H1 FY 2023 3 A$ BILLIONS  Base business growth set to continue, strong underlying drivers 4.27  January 2024 base business reven

  5. Slide 5: FY 2024 Guidance

    FY 2024 Guidance  EBITDA guidance maintained as issued August 2023: A$1.7 – 1.8 billion  More likely towards lower end of guidance range  Belgian fee cut from 1 January 2024  Currency exchange headwinds vs August 2023 rates  Acquisition of initially loss-making PathologyWatch in January 2024 

  6. Slide 6: Accentuated H2 Earnings in FY 2024

    Accentuated H2 Earnings in FY 2024  Underlying normal earnings seasonality accentuated by:  Strong organic revenue growth in setting of tight labour cost control  Ongoing workforce reduction programs to right-size company post-pandemic  Synergies from Synlab Suisse, MLD and Diagnosticum acquisit

  7. Slide 7: Recent Acquisitions and Major Contracts

    Recent Acquisitions and Major Contracts ~A$500 million new annual revenue ~ Annual Acquisition / Contract Timing Revenue (A$M) Germany Medical Laboratories Duesseldorf (MLD) 85 Leading laboratory in Duesseldorf, settled July 2023 Diagnosticum Laboratory Group 110 Laboratories across Eastern Germany,

  8. Slide 8: Earnings Drivers FY 2025 and Beyond

    Earnings Drivers FY 2025 and Beyond  Ongoing strong base business organic revenue growth and consequent operating leverage  Additional revenue and earnings secured from recent acquisitions and contract wins  Synlab Suisse – significant synergy and earnings upside from current low-margin position

  9. Slide 9: Interim Dividend

    Interim Dividend A$ H1 FY 2024 H1 FY 2023 Growth Interim Dividend $0.43 $0.42 2%  Progressive dividend strategy maintained  FY 2024 interim dividend unfranked (following fully-franked FY 2023 dividends)  Record Date 4 March 2024  Payment Date 21 March 2024 Sonic Healthcare Results H1 FY 2024 9

  10. Slide 10: Capital Management

    Capital Management Debt Cover History 3.5 31 December 30 June 2023 2023 3.0 Net interest-bearing debt A$M 1,936 886 2.5 2.0 RATIO (X) Equity A$M 7,902 7,922 1.5 Debt cover X 1.6 0.6 1.0 Long-term average Gearing ratio % 19.5 9.9 0.5 Interest cover X 19.1 29.4 0.0  Increase (A$1.05 billion) in net d

  11. Slide 11: H1 FY 2024 Revenue Split

    H1 FY 2024 Revenue Split SCS/Other A$220M 5% Radiology NZ A$432M 10% USA A$17M A$1,047M Belgium 24% A$73M 2% UK A$328M 8% Revenue in A$ millions Total Revenue A$4,306 million (including A$12 Switzerland million interest) A$405M 10% SCS / Other = Sonic Clinical Services (IPN Australia Medical Centres

  12. Slide 12: USA

    USA  H1 FY 2024 revenue (constant currency)  Base business organic growth 4%  Operations  Implementation of enhanced revenue collection system, national roll-out commenced with smaller divisions, earnings gains to date as expected USA A$1,047M  Ongoing strong growth of ThyroSeq® (exclusively li

  13. Slide 13: Australian Pathology

    Australian Pathology  H1 FY 2024 revenue  Base business organic growth 9%  Operations  Base business revenue growth outperforming historical rates, with market share gains  Pre-eminent position in specialist referrals and complex testing, driving growth  Strong growth in genetic testing, inclu

  14. Slide 14: Germany

    Germany  H1 FY 2024 revenue (constant currency)  Base business organic growth 8%  Operations  Continued strong growth from specialists and hospitals, including anatomical pathology, molecular, microbiome and genetic testing  Strong growth in Oncotype DX® breast cancer genetic test revenues  Ac

  15. Slide 15: Switzerland

    Switzerland  H1 FY 2024 revenue (constant currency)  Base business organic growth 4%  Revenue growth impacted by fee cut from 1 August 2022  Operations  Acquisition integration proceeding as planned, rebranding of Synlab Suisse laboratories completed (to MEDISYN)  Integration and harmonisation

  16. Slide 16: UK

    UK  H1 FY 2024 revenue (constant currency)  Base business organic growth 13%  Operations  Ongoing strong private and NHS base business growth  Sonic awarded 10-year laboratory contract for the Whittington Health NHS Trust UK  Sonic preferred bidder for large 15-year NHS laboratory contract (He

  17. Slide 17: Belgium

    Belgium  H1 FY 2024 revenue (constant currency)  Base business underlying organic growth 6% Belgium A$73M  Operations 2%  15% cut to national fee schedule, partially offset by fee indexation of 6%, both effective 1 January 2024  Mitigations include price increases for tests not on fee schedule

  18. Slide 18: Radiology

    Radiology  H1 FY 2024 revenue and earnings  Organic revenue growth 11% Radiology  EBITDA growth 19% A$432M 10%  Margin expansion 160 basis points  Operations  Ongoing investment and growth in higher-value modalities with strategic greenfield and brownfield expansion  Commissioned a new PET CT

  19. Slide 19: Sonic Clinical Services (SCS)

    Sonic Clinical Services (SCS)  H1 FY 2024 revenue and earnings SCS/Other  Revenue growth 12%, organic growth 4% A$220M 5%  EBITDA growth 9%  Operations  Organic revenue growth reflects increased GP private billing and Government funding increases (indexation from 1 July 2023, targeted fee incre

  20. Slide 20: Digital Pathology and AI

    Digital Pathology and AI  Anatomical pathology is the study of organs and tissues to determine the cause and effect of disease  Anatomical pathology is required for the diagnosis of all cancers  Digital pathology is the digitisation of anatomical pathology workflow  Digital pathology and AI are

  21. Slide 21: Digital Pathology and AI Strategy

    Digital Pathology and AI Strategy  Digital pathology  Sonic Healthcare is one of the world’s largest anatomical pathology (AP) providers with annual AP revenue >A$1 billion and employing >1,000 anatomical pathologists  Sonic is making significant investments in digital pathology and AI to unlock

  22. Slide 22: Thank you

    Sy SONIC SY HEALTHCARE Thank you

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