Netcare Limited · JSE:NTC
Netcare — H1 2025 Earnings Presentation
51 slides from Netcare's earnings presentation, May 2025
Slide 1: Netcare Limited Unaudited Interim Group Results
Netcare Limited Unaudited Interim Group Results For the six months ended 31 March 2025
Slide 2: Netcare's unique ecosystem of assets and services
Netcare’s unique ecosystem of assets and services 49 14 Acute hospitals Mental health hospitals 9 827 Netcare Netcare Akeso 1 007 Beds Hospitals Beds 10 Day clinics 62 Netcare 91 Primary Netcare 911 bases Netcare 911 ntred health a Medicross healthcare facilities ce nd on ca rs 7 re. Pe Cancer care
Slide 3: Strong financial performance and continued delivery on strategic projects
Strong financial performance and continued delivery on strategic projects R R R984m returned to Strong consistent operational Continued operating Maintained strong shareholders through and financial performance leverage supported by statement of financial ordinary dividends and efficiencies, digitis
Slide 4: Financial performance overview
Financial performance overview Revenue EBITDA1 EBITDA margin1 Adjusted HEPS Net debt / EBITDA1 Interim dividend R12 677m R2 347m 18.5% 58.8 cents 1.2x 36.0 cents ▲ 5.3% ▲ 8.3% ▲ 50 bps ▲ 20.0% H1 2024: 1.3x ▲ 20.0% 1 Normalised to exclude exceptional items comprising property impairments in H1 2024
Slide 5: Operational overview
Operational overview 5
Slide 6: Hospital and emergency services – activity
Hospital and emergency services – activity1 Steady growth in acute paid patient days supported by sector seasonality Paid patient days Full week occupancy2 Total Acute hospitals Mental health Total Acute hospitals Mental health 1 164 739 1 039 667 125 072 63.7% 63.1% 68.2% ▲ 1.1% ▲ 1.4% ▼ 1.3% Avera
Slide 7: Hospital and emergency services
Hospital and emergency services Rm H1 2025 H1 2024 % Revenue 12 347 11 705 5.5 EBITDA1 2 266 2 096 8.1 Operating profit1 1 624 1 474 10.2 EBITDA margin1 (%) 18.4 17.9 Operating profit margin1 (%) 13.2 12.6 Revenue EBITDA margin Growth in clinicians Average price increase aligned to CPI EBITDA margin
Slide 8: Primary Care
Primary Care Rm H1 2025 H1 2024 % Revenue 337 337 EBITDA 81 71 14.1 Operating profit 39 28 39.3 EBITDA margin (%) 24.0 21.1 Operating profit margin (%) 11.6 8.3 Revenue EBITDA margin ▼ 0.9% same-store medical and dental Improved EBITDA margin driven by cost control patient visits Financially constra
Slide 9: Financial review
ie Financial review
Slide 10: Group financial overview
Group financial overview Steady growth and disciplined capital allocation 1.1% growth in total paid patient days Further EBITDA margin expansion and aided by favourable sector seasonality solid operating leverage R R Strong statement of financial position Continuation of share buyback and improved R
Slide 11: Ongoing operating leverage
Ongoing operating leverage Track record of solid operating leverage and conservative net debt maintained Revenue (Rm) ▲5.3% EBITDA1 (Rm) ▲ 8.3% 10 311 11 325 11 537 12 162 12 034 13 168 12 677 1 625 1 871 2 015 2 100 2 167 2 363 2 347 H1 2022 H2 2022 H1 2023 H2 2023 H1 2024 H2 2024 H1 2025 H1 2022 H
Slide 12: Summarised Group statement of profit or loss
Summarised Group statement of profit or loss Rm H1 2025 H1 2024 % ▲ 5.3% in Group revenue driven by resilient Revenue 12 677 12 034 5.3 demand for private healthcare in a constrained and competitive environment EBITDA1 2 347 2 167 8.3 Operating profit1 1 663 1 502 10.7 ▲ 50 basis points in EBITDA ma
Slide 13: Headline earnings per share (HEPS), dividends and share buybacks
Headline earnings per share (HEPS), dividends and share buybacks Cents per share H1 2025 H1 2024 % Share buybacks To FY 2024 H1 2025 H2 20251 Total HEPS 59.1 48.9 20.9 Number of shares (m) 84.8 35.6 10.3 130.7 Adjusted HEPS 58.8 49.0 20.0 Ave market price (cents) 1 227 1 320 1 275 1 256 Interim divi
Slide 14: Summarised Group statement of financial position
Summarised Group statement of financial position Rm 31 Mar 2025 30 Sep 2024 Assets Our policy Netcare’s policy on capital structure is to PPE1, goodwill and intangible assets 16 298 16 333 maintain a strong statement of financial position Right of use assets 4 121 4 418 and to retain an investment g
Slide 15: Debt position
Debt position Rm 31 Mar 2025 30 Sep 2024 31 Mar 2024 Interest environment Gross debt1 6 924 7 108 7 442 • South African interest rates remain elevated despite recent rate reductions Cash (1 298) (1 802) (1 601) • 26.1% of gross debt at fixed rates Net debt 5 626 5 306 5 841 Net debt to EBITDA2 (time
Slide 16: Debt facilities
Debt facilities Access to R2.3bn cash and committed facilities with manageable maturity profile Cash and debt facilities (Rm) Debt maturity profile1 (Rm) 1 900 1 900 1 298 1 500 850 1 050 4 647 500 203 H2 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Committed facilities Uncommitted facilities Cash 1
Slide 17: Strategic update
Strategic update 17
Slide 18: Netcare's strategy
Netcare’s strategy A ten-year journey transforming the way we deliver health and care Netcare’s strategy responds … and leverages off our unique … to transform the way we decisively to the three global ecosystem of assets and services … deliver health and care healthcare megatrends … 01 Customer cen
Slide 19: Netcare's strategy is comprised of three distinct phases
Netcare’s strategy is comprised of three distinct phases Person centred health and care, that is digitally enabled and data driven 1 Digitally 2 Data 3 Person centred Phase Phase Phase enabled driven health and care Timeline Timeline Timeline 4 – 6 years to April 2024 2 – 3 years from 2024 3 – 4 yea
Slide 20: Digitally enabled phase complete with ongoing cash savings and cost avoidance
DIGITALLY ENABLED phase complete with ongoing cash savings and cost avoidance 1 Digitally Phase enabled Rm Rollout capex to April 2024 320 Implementation opex to April 2024 350 Cash savings and cost avoidance (gross) FY 2022 37 FY 2023 104 FY 2024 190 FY FY FY FY FY FY FY FY FY FY FY FY FY 2018 2019
Slide 21: Data driven
PEAS STE sey Data driven 21 Zz S a
Slide 22: Differentiating through clinical data: National Renal Care (NRC)
Differentiating through clinical data: National Renal Care (NRC) 2 Data driven • Nephrologists provided with monthly clinical reports per patient to monitor and inform treatment Phase Phase • EMR1 include pathology results and detailed recording of dialysis machine parameters • The NephrOn app, with
Slide 23: Differentiating through clinical data: Netcare Akeso
Differentiating through clinical data: Netcare Akeso Measuring what matters in mental health 2 Data driven Phase Mental health conditions are It is critical to understand the Netcare Akeso is collecting pervasive, ever increasing and now effectiveness of the programmes anonymised data and using AI r
Slide 24: Differentiating through clinical data: new product offering
Differentiating through clinical data: new product offering 2 Data driven Netcare’s unique access to rich data enables us to develop Phase new product offerings focused on specific market needs An innovative data enabled model that offers a high quality maternity experience with no out-of-pocket exp
Slide 25: Differentiating through clinical data: clinical efficiency case studies
Differentiating through clinical data: clinical efficiency case studies Driving behavioural change among clinicians informed by the power of our data 2 Data driven Phase Generic drugs are cheaper than the originator drug. However, clinicians are often reluctant to use generics citing inferior qualit
Slide 26: Better, safer care: a digitally enabled and data driven approach
Better, safer care: a digitally enabled and data driven approach Netcare has developed AI and digital solutions to combat sepsis 1 and infections in hospitals 2 Data driven Power of these three digital solutions and use of data derived from these solutions allows early Phase interventions to improve
Slide 27: Person centred health and care
P HASE 3 Person centred health and care 27
Slide 28: Netcare mobile app: Phase II
How have Netcare we performed mobile app: Phase- IImobile app – transforming your health and care experience 29
Slide 29: Netcare mobile app: Phase II – your health and care companion
Netcare mobile app: Phase II – your health and care companion Phase II launched in February 2025, focusing on enhancing the in-hospital experience Patients will receive personalised tools to: Assist during their stay with us in-hospital • Free unlimited Wi-Fi • Comprehensive hospital guide • Ability
Slide 30: Netcare mobile app: Phase II - your health and care companion
Netcare mobile app: Phase II - your health and care companion Scan to view the app’s Phase II launch video 31
Slide 31: Other strategic projects
NETCARE (7) V/ Other strategic 7 projects
Slide 32: NetcarePlus delivers more value through the Netcare ecosystem
NetcarePlus delivers more value through the Netcare ecosystem NetcarePlus GapCare claims per benefit NetcarePlus EmergencyCare claims Product B 100% Limit: R500k 90% 80% Product A Limit: R200k % claims costs 70% Out-of- Additional 60% hospital day-to-day 50% Added benefit specialist cover of unlimit
Slide 33: Market leaders in environmental sustainability
Market leaders in environmental sustainability Caring for our environment through innovative solutions Targets set for second phase to 2030 2030 100% Renewable Energy Anaerobic digestion plant – another first power initiative on track Reduce Scope 2 emissions to zero An anaerobic digestion plant is
Slide 34: Operating environment
NETCARE () [Cc Operating = ‘a environment. ee ALS
Slide 35: Ageing and burden of disease continue to drive healthcare utilisation
Ageing and burden of disease continue to drive healthcare utilisation Utilisation is a primary cost driver of healthcare costs Average annual medical scheme contribution increases and the impact of demand1 Medical scheme contribution 8.9% 9.5% 8.8% 11.3% 7.2% 8.2% 6.2% 2.9% 3.6% 9.8% increases Utili
Slide 36: Impact of an ageing insured population and patient base
Impact of an ageing insured population and patient base Medical scheme experience Netcare experience Netcare patient age distribution by admission 10.0% 9.0% 8.0% ▼ 84 500 medical scheme lives Patients aged 60+ years 7.0% aged 20 to 29 years between comprise 36.3% 2008 and 20231 (2014: 29.4%) of Net
Slide 37: Impact of higher burden of disease
Impact of higher burden of disease The incidence of chronic diseases has grown exponentially Increase in average chronic disease prevalence1 Increased chronic disease prevalence Increased cancer prevalence Increased mental health prevalence among younger lives across all age groups among young adult
Slide 38: National Health Insurance (NHI) Act
National Health Insurance (NHI) Act Netcare has long recognised the pressing need to address the deficiencies and inequities in healthcare access and delivery in South Africa. The private sector is well positioned to support government's efforts to expand access to quality healthcare for all South A
Slide 39: Guidance
(\ (ea Guidance
Slide 40: Guidance
Guidance Unchanged from guidance published in November 2024 results Total paid Revenue Strategic patient days projects ▲ 0.8% - 1.3% ▲ 5.0% to 6.0% R60m opex vs. FY 2024 vs. FY 2024 in FY 2025 EBITDA margin Capex Normalised margin FY 2025: R1.5bn expected to benefit from operational efficiencies, of
Slide 41: Thank You
Thank You Unaudited Interim Group Results For the six months ended 31 March 2025 42
Slide 42: Q&A Unaudited Interim Group Results
Q&A Unaudited Interim Group Results For the six months ended 31 March 2025 43
Slide 43: Annexures
[r/ Annexures
Slide 44: Transforming Netcare and contributing to society
Transforming Netcare and contributing to society Level 3 B-BBEE rating with improved overall scores in FY 2024 Preferential procurement spend B-BBEE compliant Black owned Black women Qualifying small suppliers suppliers owned suppliers enterprises R15.3bn (119%) R7.3bn (57%) R5.2bn (40%) R1.4bn (11%
Slide 45: An ongoing force for social good MyWalk made with Soul
An ongoing force for social good MyWalk made with Soul An initiative founded by Netcare and Adcock Ingram Critical Care My Walk recycles PVC into school shoes To date: >148k tons uncontaminated, non-hazardous healthcare waste collected >295 000 pairs of school shoes donated to school children in und
Slide 46: Principles of capital allocation
Principles of capital allocation Netcare remains prudent in managing its capital resources Investment strategy Deployment of capital Cash generation • Identifying opportunities • Return on capital must safely • Target annual cash conversion ratio of 90% - 100% linked to Group strategy exceed the cos
Slide 47: Acute hospital patient day: surgical/medical mix
54.3% 45.7% H1 2019 52.6% 47.4% H2 2019 54.3% 45.6% 0.1% H1 2020 51.3% 31.6% 17.1% H2 2020 49.9% 30.8% 19.3% H1 2021 Surgical 47.2% 29.2% 23.6% H2 2021 53.7% 40.7% 5.6% H1 2022 Medical excl COVID 51.7% 45.4% 3.0% H2 2022 COVID 51.9% 46.8% 1.3% H1 2023 Acute hospital patient day: surgical/medical mix
Slide 48: Acute hospital occupancy range
Acute hospital occupancy range 50 45 40 (excluding day facilities and PPPs1) 35 Number of hospitals 30 25 20 15 10 5 - FY 2021 FY 2022 FY 2023 H1 2024 H2 2024 FY 2024 H1 2025 < = 50% 51% - 60% 61% - 70% >70% 1Public Private Partnership 49
Slide 49: Acute hospital revenue: growth composition
Acute hospital revenue: growth composition Revenue growth 2.6% 2.1% -5.6% 2.1% 11.9% 4.0% 5.1% 50
Slide 50: Investment in key strategic projects
Investment in key strategic projects Capex Opex To To FY 2024 H1 2025 H2 2025 FY 2025 FY 2024 H1 2025 H2 2025 FY 2025 Digital platforms • CareOn (acute hospitals) 320 350 • EMR (other divisions) 38 9 • Wi-Fi infrastructure 78 Digitisation Data analytics • Azure Cloud, ongoing analytics 175 Patient f
Slide 51: Shares in issue
Shares in issue Number of shares Weighted average number of shares Shares in issue Treasury shares Net Shares in issue Treasury shares Net Balance 1 October 2024 1 417 549 301 (168 817 910) 1 248 731 391 1 417 549 301 (168 817 910) 1 248 731 391 Shares repurchased (35 591 034) (35 591 034) (6 762 74