Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — UBS Healthcare Conference 2006
19 slides from Ramsay Health Care's conference presentation, Nov 17, 2006
Slide 1: UBS Healthcare Conference
pd WA HEALTH CARE ey ais UBS Healthcare Conference 17 November 2006 Pat Grier, Managing Director
Slide 2: Ramsay Profile
nABeay RAMSAY PROFILE HEALTH CARE Australia’s largest private hospital operator > 65 Australian facilities, 3 Indonesian facilities > 7,230 beds > More than 20,000 employees >» 25% of private hospital beds > 28% of private hospital admissions > Over 750,000 patients per year > Over 455,000 procedure
Slide 3: Ramsay Strategic Strengths
at SAY STRATEGIC STRENGTHS HEALTH CARE Size and strategic position of portfolio brings market strengths and growth prospects > Economies of scale > Operating and financial leverage > Portfolio rationalisation and maximisation > Relationships with stakeholders > Strong influence in growing market > M
Slide 4: Operating in a Growth Industry
= OPERATING IN A GROWTH RAMSAY INDUSTRY Environment and demographics support continuing strong demand for private hospital services > Balanced health care system > Ageing population supports market growth > Private health insurance membership remains at historically high levels >» Ramsay in strong p
Slide 5: Ramsay 2006 Financial Year Overview
aS ramsay 2906 FINANCIAL YEAR OVERVIEW HEALTH CARE » Creation of Australia’s leading hospital portfolio » Pleasing results from Ramsay and Affinity hospitals » Focus on hospital micro-management delivers profit growth ahead of expectations » Integration proceeding well » Core EPS growth ahead of ini
Slide 6: Ramsay Financial Highlights
aS RAMSAY FINANCIAL HIGHLIGHTS HEAL CARE =» Revenue from continuing operations up 73% to $2.0 billion a Total Core Net Profit (including profit from divested operations) up 69% to $93.3 million » Core EPS from continuing operations up 24% to 44.9 cents a Full year dividend 24.0 cents for the year, u
Slide 7: Strong EBIT Growth
Es STRONG EBIT GROWTH RAMSAY Continuing Operations 193.3) 125 107.8 76.9 66.4 75 58.4] 50 39.6 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 = EBIT up 79% for the year
Slide 8: Core NPAT Growth
Es CORE NPAT GROWTH RAMSAY Continuing Operations 91.4 50.3} 42.7 37.7 40 31.6] 16.8} 20 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 mw Core NPAT from continuing operations up 82% for the year
Slide 9: Core EPS Growth
ss CORE EPS GROWTH PASAY Continuing Operations 40 36.2 33.1 25.0 20 14.9 Cents/share 10 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 m Core EPS from continuing operations up 24% for the year m Average annual compound growth rate for continuing operations over 5 years of 25% (base year FY 2001)
Slide 10: Ramsay Balance Sheet Strength
aS RAMSAY BALANCE SHEET STRENGTH HEALTH CARE a Strong cash flow generation and cash conversion a Faster than expected debt reduction creates significant capacity to fund further growth
Slide 11: Ramsay Strong Operational Cash Flow
an RAMSAY STRONG OPERATIONAL CASH FLOW HEALTH CARE $m EBITDA / Cash Flow 280 240 200 160 120 : ino FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 EBITDA O Gross Operating Cash Flow m Continuing effective cash flow management mw Gross operating cash flow of $260 million exceeds EBITDA of $252 millio
Slide 12: De-leverage & Gearing
aS RAMSAY HEALTH CARE DE-LEVERAGE & GEARING $m 1,500 fey = Acquisition > $1.4 bin / _ Divestment _ 1,200 7 14 Hospitals __ 3900 | Benchmark [7 J : $700'm 600 _ Acquisition Divestment LE ; a Divestment _ 5 Hospitals 3 Sth Aust Hospitals, 300 oe Care & Silver | : —@ Net Debt (D) =< Shareholder Equity
Slide 13: Growth Strategy is Delivering Returns
ss GROWTH STRATEGY IS RAMSAY DELIVERING RETURNS a 1%t phase - Continue to grow earnings at hospital level > Organic growth » Achieve Affinity synergies » Earnings uplift from Ramsay management a 2°d phase - Brownfields expansion a 3 phase - Acquisitions > Hospital acquisition opportunities still exi
Slide 14: 1st Growth Phase Proceeding Well
ae Ist GROWTH PHASE RAMSAY PROCEEDING WELL HEALTH CARE a Focus on hospital micro management delivered solid profit growth in FY06 for both Ramsay and Affinity hospitals a Affinity 3 year integration plan on track > Pre-tax cost synergies of approx $15 million achieved in FY06 > On track to achieve r
Slide 15: 2nd Growth Phase: Brownfields Expansion
aS 2nd GROWTH PHASE RAMSAY BROWNFIELDS EXPANSION a In the process of identifying best investment opportunities a Financial headroom to invest up to $400 million in enhancements and capacity expansion a Investment criteria of 15% return on capital targeted over short to medium term a To enhance profi
Slide 16: Brownfields Expansion (Cont)
aS 2nd GROWTH PHASE RAMSAY BROWNFIELDS EXPANSION (Cont) HEALTH CARE Strategic development program: a Develop large multi-service hospitals to attract increased referrals in major metropolitan areas a Invest in other hospitals in portfolio to develop them as niche service providers in particular medi
Slide 17: 3rd Growth Phase: Acquisitions
LS 3rd GROWTH PHASE RAMSAY ACQUISITIONS Investigating acquisitions > Further Australian hospital acquisitions in areas where there are no competition issues > Opportunities to expand Ramsay hospital franchise offshore, particularly Asia > Other areas of health care close to core hospital management
Slide 18: Ramsay FY 2007 Outlook
ae RAMSAY FY 2007 OUTLOOK HEALTH CARE Targeting growth in FY07 of 15%-20% in Core EPS, over FY06 Core EPS of 44.9 cents, based on: > Organic growth of Ramsay and Affinity hospitals > Realisation of synergies and improved earnings from Affinity under Ramsay management
Slide 19: HEALTH CARE:
pd WA HEALTH CARE: