Spire Healthcare Group Plc · LSE:SPI
Spire Healthcare — H1 2014 Earnings Presentation
25 slides from Spire Healthcare's earnings presentation, Aug 28, 2014
Slide 1: 2014 Half-Year Results Presentation
2014 Half-Year Results Presentation Thursday 28th August 2014
Slide 2: Presentation Team
Presentation Team Chief Executive Officer Chief Financial Officer Rob Roger Simon Gordon CEO of Spire since May 2011, previously CFO from 2007 Joined Spire in July 2011 after 8 years as Group Finance Director of Virgin Active Formerly CFO of Tussauds Group, where he successfully grew EBITDA fr
Slide 3: H1 Key Highlights – Financial
H1 Key Highlights – Financial Revenue increased 10.5% to £417.2m Growth in all payor categories: PMI, Self-Pay, NHS In-patient & day case volumes up 9.2% Adjusted EBITDA up 9.3% (£79.9m) (1) Adjusted operating profit up 7.9% (£57.3m) (2) PF Adj. EPS of 8.43p (2)(3) Private (£5bn) (2) H1 Perf
Slide 4: H1 Key Highlights – Operational
H1 Key Highlights – Operational Acquisition of St. Anthony’s hospital Bristol radiotherapy centre opened and reached breakeven EBITDA within two months Cardiac catheterisation lab in Cardiff completed H1 capacity utilisation at 64% (+4%) Two theatre developments to be delivered in H2 2014 Priva
Slide 5: Financial Review
Financial Review Spire Healthcare
Slide 6: Income Statement – Positive Growth
Income Statement – Positive Growth Key Highlights Six months ended 30/06/2014 2014 2013 % Change Strong revenue growth across all payor Unaudited Unaudited (£ million) categories Revenue 417.2 377.5 10.5% Adjusted EBITDA up 9.3% Cost of sales (210.2) (186.3) 12.8% Gross profit 207.0 191.2 8.3% G
Slide 7: Continued Top-Line Momentum
Continued Top-Line Momentum Strong Recent Revenue Growth... ...Across All Payor Categories Revenue Growth 10.5% H1 2014 2.5% PMI H2 2013 1.6% H1 2013 (1.6%) 6.3% 6.0% H1 2014 8.9% Self Pay H2 2013 10.9% 3.5% H1 2013 5.0% H1 2014 29.2% 0.9% NHS H2 2013 14.1% 2009-12 CAGR FY 2013 H1 2013 H2 2013 H1 20
Slide 8: Payor Highlights – PMI
Payor Highlights – PMI PMI Revenues up by 2.5% to £214.5m 53% Volumes flat at c.62,100 H1 2014 Rates up by 1.7% Revenues (1) 73.4% of total discharges Day Case Less complex than in previous year including push into ophthalmology Rate increase positive but sub-inflationary Strong rate g
Slide 9: Payor Highlights – Self Pay & NHS
Payor Highlights – Self Pay & NHS Self Pay Rates declined by 1.0% 18% Revenues up 8.9% Early 2013 impacted by DePuy hip revision procedures artificially increasing rates masking positive rates improvement in underlying recurring case mix Volumes H1 2014 up 10.1% Revenues (1) Out-patient re
Slide 10: Gross Profit Growth Breakdown
Gross Profit Growth Breakdown Total Growth VAR % 9.0% 1.7% 5.2% 11.9% (8.1)% (15.9)% (14.6)% 8.3% £m 250 11.2 225 1.7 (5.4) 4.3 22.5 (12.5) 207.0 (6.0) 200 191.2 175 150 H1 2013 Gross Volume Yield MRI/CT Other Clinical staff Direct costs Medical fees H1 2014 Gross profit Outpatients costs profit 8
Slide 11: Operating Costs
Operating Costs % 2014 £m Revenues 2013 H1 Other Operating Costs 143.5 34.4% Movements in the Period: Exceptional Items 5.6 1.3% Rent 3.7 0.9% St. Anthony's and Radiotherapy 1.2 0.3% Underlying Operating Cost Increase 6.8 1.6% 2014 H1 Other Operating Costs 160.8 38.5% 9
Slide 12: Positive Earnings Momentum
Positive Earnings Momentum Key Highlights Adjusted EBITDA Six months ended 30/06/2014 Strong Adjusted EBITDA growth of 9.3% 2014 2013 % Change Rent increased by 14.2% to £29.8m Unaudited Unaudited £m £m Cost of sales increased by 12.8%, reducing gross margin to Operating Profit 46.2 47.7 (3.1%
Slide 13: Strong Cash Flow Generation with High Cash Conversion
Strong Cash Flow Generation with High Cash Conversion Key Highlights Six months ended 30/06/2014 2014 2013 % Change (£ million) Unaudited Unaudited Net cash from operating activities 71.0 28.8 146.5% Of which: Positive operating cash flow of £71.0m (Loss) / profit before taxation (1.7) 43.8 (103.9
Slide 14: Maintaining a Robust, Appropriate Capital Structure
Maintaining a Robust, Appropriate Capital Structure Key Highlights £m Primary IPO net proceeds of £255m Net debt as at 30 June 2014 (incl. shareholder loans) 1,627.0 used to reduce leverage Capital restructuring: All outstanding mark to market Shareholder loans (894.0) derivatives settled at IPO
Slide 15: Financial Outlook & Guidance
Financial Outlook & Guidance Improving Payor Trends: Driving High Single Digit Growth Volume expected to show early signs of recovery in H2 2014 PMI Overall revenues above recent market trends post-market recovery in 2015 Revenue growth in line with 2013 Self Pay Expected to grow ahead of hi
Slide 16: Operational Review
Operational Review Spire Healthcare
Slide 17: Spire's Unique Proposition
Spire’s Unique Proposition Spire is uniquely positioned to capture a growing share of a rapidly expanding private healthcare market Bushey Hospital 1 Fast growing market: persistent and growing supply gap Manchester Development 2 Well positioned through well invested and scalable hospitals 3 Leicest
Slide 18: Market Overview
Market Overview Rapidly Growing Healthcare Supply Gap H1 Highlights NHS Funding Progression Market continues to recover YE March PMI BUPA contract negotiations ongoing £160bn (4) Total Market continues to grow as Market Opportunity Estimated Self economic recovery gains pace (c.£35bn) Funding
Slide 19: Operational Review
Operational Review PMI Self-Pay NHS Develop simple, transparent Continue to build Choose & Book Continue to invest in driving message around the cost of self through GP and CCG acuity pay treatment engagement Correlated to top 30 rationed procedures e.g. hernias, Introduce improved efficie
Slide 20: Acquisition of St. Anthony's
Acquisition of St. Anthony’s Current Proposition Stage 1: Plug into Spire Platform Stage 2: Reconfiguring the Hospital Sept A 4 theatre facility with the ability to carry 2016-18 2014 out high-acuity work Shared service centre and in-house Increase from 4 to 6 theatres capabilities 2 theatre
Slide 21: Delivery of New Services
Delivery of New Services Flagship Cancer Centres Other Developments Diagnostics Chemotherapy Radiotherapy Cancer Surgery Cardiac catheterisation lab in Cardiff completed Recently completed Radiotherapy Centre in Bristol allows Major reconfiguration at Tunbridge Wells Spire to deliver entire canc
Slide 22: Projects in the Pipeline
Projects in the Pipeline Manchester Development 2 Further Regional Sites 2 Central London Sites New Spire hospital offering broader range Two additional regional sites identified and Additional sites in central London in early of complex surgery and care to be constructed stages of planning
Slide 23: Multiple Growth Drivers
Multiple Growth Drivers Near Term New Spire Developments: Driving Double Digit Growth Medium Term St. Anthony’s New Theatres Radiotherapy New Hospitals £60m capex employed 10 new theatres over next 4+ further sites to be Manchester + 2 further four years developed by 2017 regional sites open
Slide 24: Summary
Summary 1 Strong revenue growth across all payor groups 2 Strong earnings growth – Adjusted EBITDA up 9.3% 3 Strong balance sheet providing solid platform for further growth 4 Strong market dynamics offering multiple future growth opportunities 21
Slide 25: Any Questions?
Any Questions? Spire Healthcare
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