Sonic Healthcare Limited · ASX:SHL
Sonic Healthcare — Shareholder Meeting (November 2008)
30 slides from Sonic Healthcare's shareholder meeting presentation, Nov 20, 2008
Slide 1: Annual General Meeting
Annual General Meeting 20 November 2008 Colin Goldschmidt CEO and Managing Director
Slide 2: FY 2008 Highlights
FY 2008 Highlights ` Outstanding performance with record result ` Strong revenue, earnings and cash flow growth ` Guidance achieved despite currency headwind ` Synergy / margin expansion in USA and Germany ` Sonic well set for ongoing growth
Slide 3: 2008 Financial Highlights
2008 Financial Highlights Growth 2008 vs 2007 Revenue 26% EBITA 17% NPAT 24% EPS 12% Cash Generation 24% Dividend (full‐year) 13%
Slide 4: FY 2008 Guidance Delivered
FY 2008 Guidance Delivered FY 2008 FY 2008 FY 2008 Constant currency Guidance Actuals basis* Revenue growth “20 – 25%” 26% 30% Earnings per share growth “>12%” 12.2% 14.7% * FY 2008 actuals at FY 2007 currency exchange rates
Slide 5: FY 2009 Guidance
FY 2009 Guidance (Issued August 2008) FY 2009 Guidance Revenue Growth >15% Earnings per share >10% Variables: ` Foreign exchange rates ` Interest rates ` Assumes underwritten DRP ` Excludes new acquisitions
Slide 6: Guidance Update FY 2009
Guidance Update FY 2009 ` Sonic reaffirms original guidance on post‐equity raising basis ` Revenue growth >15% ` EPS growth >10% ` Underlying global business remains robust ` In local currency terms, global operations delivering to expectations ` Volumes not impacted by global financial crisis ` Med
Slide 7: Equity Raising
Equity Raising ` Institutional placement of A$425 million ` Conducted on 12 November, 2008 ` Raising 2.5X oversubscribed ` Issue price of A$11.60 (~10.8% discount to previous closing price) ` Issue of ~36.6 million shares ` Share Purchase Plan (SPP) ` Eligible shareholders may subscribe for up to A$
Slide 8: Debt Update
Debt Update ` Recent restructure of Sonic’s senior bank facilities ` Majority of Sonic’s debt drawn in US dollars and Euro ` Facility limits now fixed in foreign currencies ` Small Australian dollar limit for other currencies ` Net debt currently A$1,650 million ` Debt held in foreign currencies, ma
Slide 9: Revenue FY 2008
Revenue FY 2008 2008 2007 Growth (A$M) (A$M) (%) Total Revenue 2,380 1,886 26% ` Total organic revenue growth (excluding acquisitions) >7% ` Australian pathology organic revenue growth ~8% ` US organic revenue growth >8% ` UK organic revenue growth >10% ` Germany and Switzerland organic revenue grow
Slide 10: Acquisitions impacting FY'09 revenue
Acquisitions impacting FY’09 revenue FY 2007/8 FY 2008/9 J A S O N D J F M A M J J A S O N D J F M A M J Sunrise (USA) Bioscientia (GER) Labor‐28 (GER) GLP Medical (GER) Clin Labs Hawaii (USA) Gemini (IPN – AUS) Others (small)
Slide 11: Revenue Mix
Revenue Mix For full‐year ended 30.6.08
Slide 12: Sonic Revenue Mix
Sonic Revenue Mix For full‐year ended 30.6.08
Slide 13: Annual Revenue
Annual Revenue 3,000 2,500 2,000 1,500 ASM 1,000 500 +— 2001 2002 2003 2004 2005 2006 2007 2008 > SONIC HEALTHCARE
Slide 14: Earnings per Share
Earnings per Share EPS and EPS Growth 13 consecutive years of double‐digit EPS growth
Slide 15: Full-year dividend history
Full‐year dividend 14 Year History
Slide 16: Dividend
Dividend 2008 2007 Change Interim Dividend $0.20 $0.17 18% Final Dividend $0.32 $0.29 10% Full Year Dividends $0.52 $0.46 13% ` Dividend fully franked at 30% ` Record Date 12 September 2008 ` Payment Date 9 October 2008 ` Dividend Reinvestment Plan operated
Slide 17: Dividend Reinvestment Plan (DRP)
Dividend Reinvestment Plan (DRP) ` DRP activated for the first time since 2004 ` Complemented capital management strategy in light of recent and ongoing acquisitional growth ` Fully underwritten by Citi ` Total DRP raising ~$107 million ` Discount 2.5% ` Shareholder uptake ~40% ` Shares allotted on
Slide 18: Operational Summary
Operational Summary = Australian Pathology m USA m= Germany = NZ Pathology mUK = Switzerland = IPN = Radiology > POMS HEALTHCARE
Slide 19: Australian Pathology
Australian Pathology ` Revenue growth of ~8% in FY 2008 ` Ongoing strong revenue growth in FY 2009 to date ` Douglass Hanly Moir Pathology (Sydney) ` Successfully relocated to new laboratory November 2007 ` Successfully installed Sonic’s Apollo IT system October 2008 ` Australian Medicare reimbursem
Slide 20: USA
USA ` Sonic Healthcare USA performing strongly ` Organic growth (excluding acquisitions) >8% ` Synergy activity escalating ` Internal mergers, centralisation, purchasing, IT, sales, marketing ` Margin expansion of 190 basis points (H2 ‘08 vs H1 ’08) ` Fee/pricing status ` 4.5% increase to Medicare f
Slide 21: Germany
Germany ` Sonic Healthcare Germany ` Schottdorf and Bioscientia organic revenue growth ~8% ` Labor‐28 (Berlin) – settled 1 July 2008 ` GLP Medical (Hamburg) – settled 1 September 2008 ` Synergy benefits ` >€10 million over 2‐5 years (Schottdorf/Bioscientia) – 25% already locked in ` Additional >€5 m
Slide 22: Switzerland
Switzerland ` Strong result for FY 2008 year ` Solid revenue/earnings growth, with margin expansion ` Strong management team ` Acquisition of Lab. Prof. Krech ` Completed 1 July 2008 ` A synergistic “bolt‐on” acquisition ` 2 small labs: Zurich lab closed, Kreuzlingen lab downsized ` Synergies ` Prof
Slide 23: UK
UK ` Robust revenue and earnings growth ` Harley Street market growth strong ` NHS contracts ` UCLH contract progressing well ` Ealing contract operating well (commenced 1 July 2008) ` Further outsourcing opportunities
Slide 24: New Zealand Pathology
New Zealand Pathology ` Revenue and earnings flat ` Outstanding laboratories, managers, pathologists ` Reimbursement structures forcing service contraction ` Auckland laboratory contract appeal process ` Court of Appeal, Wellington, May 5‐14 2008 ` Appellant – Lab Tests Auckland (Healthscope) ` Resp
Slide 25: Radiology
Radiology ` Difficult market conditions persisted through FY 2008 ` Cost and competitive pressures ` Medicare reimbursement rates flat for >10 years ` Sonic Imaging performance FY 2008 ` Revenue growth ~2% ` EBITA margin compression of 1.6% ` Sonic Imaging trading update ` Improving revenue and earn
Slide 26: IPN – Acquisition of minority interests
IPN – Acquisition of minority interests ` Sonic moved to 100% ownership of IPN on 30 September 2008 ` Acquisition of outstanding 28.53% ` Achieved via Scheme of Arrangement ` Sonic paid 27 cents per share (~$75.6 million) ` IPN management to remain in place ` Sonic and IPN working together for mutua
Slide 27: IPN Performance
IPN Performance ` IPN continues to perform strongly ` Financial highlights ` Revenue up 29% to A$123 million ` EBITDA up 32% to A$19.9 million ` Net profit up 27% to A$8.7 million ` Ongoing growth via recruitment and acquisition ` GP numbers increased by 132 to 843 at year end ` Gemini acquisition –
Slide 28: Future Growth
Future Growth ` European laboratory market ` German synergies flowing ` UK and Switzerland strong ` Organic and acquisitional growth ` USA laboratory market ` Synergies flowing ` Organic and acquisitional growth ` Australian pathology market ` Annual revenue >$800 million ` Ongoing strong organic gr
Slide 29: The Sonic Difference
The Sonic Difference ` Sonic culture embraced by staff and customers globally ` Medical Leadership ` Federation structure ` Personalised service ` Respect for our >20,000 people ` Sonic model underlies success to date ` Strong, loyal and flexible leadership teams ` Staff commitment ` 13 years of dou
Slide 30: Thank you
SONIC HEALTHCARE Thank you I [ GC E > POMS HEALTHCARE
Sonic Healthcare — Shareholder Meeting (November 2008) on 6ix