Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — H1 FY2000 Earnings Presentation
22 slides from Ramsay Health Care's earnings presentation, 2000
Slide 1: Interim Results Six months to 31 December 1999
RAMSAY HEALTH CARE LIMITED Interim Results Six months to 31 December 1999 RAMSAY HEALTH CARE
Slide 2: Chairman's Overview
CHAIRMAN’S OVERVIEW • $4.1 million profit achieved in tough health insurance environment – Good performance from established non co-located hospitals – Profitability of high acuity co-located hospitals continues to be impacted by health insurance squeeze RAMSAY HEALTH CARE
Slide 3: Chairman's Overview
CHAIRMAN’S OVERVIEW • Concentrating on increasing profitability – Withdrawal from privatisation of Berwick Community Hospital – Finalised withdrawal from Princess Alexandra co-location • Construction of Mildura Base Hospital on time and on budget to open in late September 2000 • Maintained 3c interi
Slide 4: Financial Highlights
FINANCIAL HIGHLIGHTS • NPAT before abnormals $4.1 million • Group revenue up 35% • Revenue from established hospitals up 12% • Group EBIT up 5% • EBIT from established hospitals up 19% • EBIT margin from established hospitals up from 12.7% to 13.5% RAMSAY HEALTH CARE
Slide 5: Financial Performance
FINANCIAL PERFORMANCE Six Months Ended 31 December 1999 $ million Established Hospitals Co-located Total Hospitals 1998 1999 1998 1999 1998 1999 Operating Revenue 113.8 127.8 6.1 34.2 119.8 162.0 EBITDA 20.1 23.5 0.7 2.1 20.8 25.6 Depreciation (5.6) (6.3) (0.6) (3.9) (6.2) (10.2) EBIT 14.5 17.2 0.1
Slide 6: Financial Performance
FINANCIAL PERFORMANCE 6 months to 31 Dec 1999 Interim dividend, unfranked 3c Pre abnormal EPS 3.8c EPS 2.5c RAMSAY HEALTH CARE
Slide 7: Overview of Operations
OVERVIEW OF OPERATIONS Operating Revenue Co-located 21% Veteran 53% Psychiatric 15% Rural Medical Surgical 11% RAMSAY HEALTH CARE
Slide 8: Overview of Operations
OVERVIEW OF OPERATIONS All Hospitals 6 months to Dec ’98 6 months to Jun ‘99 6 months to Dec ‘99 Revenue ($m) 119.8 140.0 162.0 EBIT ($m) 14.6 12.2 15.4 EBIT Margin (%) 12.2 8.7 9.5 Revenue PP Day ($) 520 551 574 Labour Hours PP Day 10.13 10.11 9.84 RAMSAY HEALTH CARE
Slide 9: Operational Performance
OPERATIONAL PERFORMANCE Inpatient occupancy 77 77 77 77 76 75 73 73 73 Established % Total 12 Mths to 12 Mths to 12 Mths to 12 Mths to 6 Mths to 6 Mths to Jun'96 Jun'97 Jun'98 Jun'99 Dec'98 Dec'99 RAMSAY HEALTH CARE
Slide 10: Established Hospitals - Veteran
ESTABLISHED HOSPITALS - VETERAN Strong result reinforces our decision to invest in new services and facilities in our veteran hospitals • Additional 60 beds • Expanded services at Hollywood • New step down unit at Greenslopes • Managed length of stay • Further cost efficiencies Revenue EBIT EBIT 20%
Slide 11: Established Hospitals - Rural Medical-Surgical
ESTABLISHED HOSPITALS - RURAL MEDICAL-SURGICAL Increased profits in a flat market • Aggressive cost reduction strategy • Managed length of stay with introduction of case mix funding • Additional 10 beds at Albury Wodonga Private Hospital • New stand alone day surgery unit Revenue EBIT EBIT in Coffs
Slide 12: Established Hospitals - Psychiatric
ESTABLISHED HOSPITALS - PSYCHIATRIC Management of patient mix led to increased profit in a mature market • Reduced length of stay and rationalisation of case mix has increased profitability • Introduced continuum of care with health funds • Further cost efficiencies Revenue EBIT EBIT 2% Margin RAMSA
Slide 13: Co-located Hospitals
CO-LOCATED HOSPITALS Increased occupancy and cost efficiencies have improved profitability. Progress slow due to non- recognition of high acuity services by health funds. • Continue to negotiate and build relationships with health funds to secure preferential arrangements – now in a stronger negotia
Slide 14: Co-located Hospitals
CO-LOCATED HOSPITALS • North Shore Private – increased volume of day surgery – Catheritisation Laboratory opened • Flinders Private Hospital – Doctors consulting suites opened – Continuing increase in occupancy from additional doctors and intensive marketing campaign Revenue EBIT EBIT 8% Margin – DV
Slide 15: Co-located Hospitals - Occupancy
CO-LOCATED HOSPITALS -OCCUPANCY 88 85 88 82 84 80 66 64 57 % 53 47 48 49 46 44 38 Jul '99 Aug '99 Sep '99 Oct '99 Nov '99 Dec '99 Jan '00 Feb '00 North Shore Private Flinders RAMSAY HEALTH CARE
Slide 16: Co-located Hospitals Performance Analysis
CO-LOCATED HOSPITALS Performance Analysis - Monthly average: 6 month to 31 Dec’99 over 6 months to 30 Jun’99 • High occupancy for North Shore, Occupancy improving at Flinders • Revenue improving - up 8% • EBIT Loss slow improvement of 8% • Slow Margin Improvement RAMSAY HEALTH CARE
Slide 17: Report Card
REPORT CARD • Focused on established business – margins up from 12.7% to 13.5% – EBIT + 19% • Rigorously assessed new projects – withdrawal from Princess Alexandra – withdrawal from Berwick Community Hospital RAMSAY HEALTH CARE
Slide 18: Report Card
REPORT CARD • Invested in Veteran Hospitals – revenue up 20% – EBIT and margin increases • Focus on profitability and efficiency of co-located hospitals – occupancy trending upwards – revenue increased – productivity improvements – EBIT and margins improving slowly RAMSAY HEALTH CARE
Slide 19: Report Card
REPORT CARD • Improve reimbursement rates from health insurers – 1-2% increase against cost increase of 5-6% – matter of timing • Ensure success of Mildura Base Hospital project – on time and on budget RAMSAY HEALTH CARE
Slide 20: Environment
ENVIRONMENT • Improved health insurance industry – increased membership, first time in 13 years – dramatically improved financial position of health funds – minimal flow-on of benefits to hospitals RAMSAY HEALTH CARE
Slide 21: Environment
ENVIRONMENT • Positive Federal Government initiatives – 30% rebate, Opposition commitment – support for no-gap insurance – life-time cover, break down of community rating – $35 million advertising campaign RAMSAY HEALTH CARE
Slide 22: Interim Results Six months to 31 December 1999
RAMSAY HEALTH CARE LIMITED Interim Results Six months to 31 December 1999 RAMSAY HEALTH CARE