Sonic Healthcare Limited · ASX:SHL
Sonic Healthcare — FY2011 Earnings Presentation
22 slides from Sonic Healthcare's earnings presentation, Aug 23, 2011
Slide 1: Financial and Operational Review
Financial and Operational Review Year ended 30 June 2011 Colin Goldschmidt CEO, Sonic Healthcare 23 August 2011
Slide 2: Forward-looking statements
Forward-looking statements This presentation may include forward-looking statements about our financial results, guidance and business prospects that may involve risks and uncertainties, many of which are outside the control of Sonic Healthcare. Readers are cautioned not to place undue reliance on f
Slide 3: Summary
Summary Financial summary Revenue up 10% (constant currency) EBITDA up 11% (constant currency) NPAT up 6% (constant currency) – guidance met Margin expansion in major divisions Germany up 120 bps, USA up 60 bps Australian pathology business – H2 turnaround Negative H1 revenue / earni
Slide 4: Financial Summary
Financial Summary FY ‘11 GROWTH FY ‘11 CURRENCY FY ‘11 v FY ‘10 TRANSLATION A$M Constant Currency * Constant Currency * Statutory EFFECTS Revenue 3,287 10% 3,096 (191) EBITDA 605 11% 570 (35) Interest Expense 74 51% 65 (9) NPAT 311 6% 295 (16) EPS – 79.7 cents (constant currency), up 6% on FY ‘10
Slide 5: Final Dividend
Final Dividend FY ‘11 FY ‘10 Final Dividend A$0.35 A$0.35 Dividend franked to 28% Record Date 7 September 2011 Payment Date 21 September 2011 Dividend Reinvestment Plan remains suspended
Slide 6: FY '12 Guidance
FY ‘12 Guidance EBITDA growth of 10-15% Interest expense to increase by ~30% Due to increased margins and growth in debt since July 2010 Effective tax rate ~26% Reflecting expansion in countries with higher tax rates Based on constant currency (FY ‘11 FX rates) Excludes future acquisit
Slide 7: Sonic Healthcare Model
Sonic Healthcare Model Building a strong and successful company Enhancing value for stakeholders Sonic people Core Values Customer services Sonic Foundation Principles Shareholder value EPS and ROIC EPS – Earnings per share ROIC – Return on invested capital (return after tax)
Slide 8: Sonic People
Sonic People Core Values Our Values Commit to Service Excellence To wilingly serve a those with whem we deal with unsurpasted excellence. Treat each other with Respect & Honesty To grow a workplace where trust, team spirit, and equity are an integral part of everything we do. Demonstrate Responsibil
Slide 9: Customer Services
Customer Services Sonic Foundation Principles
Slide 10: Shareholder Value
Shareholder Value Business Model Model designed to drive EPS and ROIC accretion Proven in Australia over past two decades Well-advanced in USA and Europe Phase 1 Initial acquisition in new market EPS accretion Low ROIC Phase 2 Add synergistic acquisitions EPS accretion Initiall
Slide 11: Return on Invested Capital (ROIC) – Australian Pathology
Return on Invested Capital (ROIC) Australian Pathology 20.0% 4 18.0% 5 16.0% 1 ROIC 14.0% 1 – SGS Medical Group, Hi-Tech acquisitions 2 2 – SGS minority interests acquisitions 3 3 – Clinipath, Cairns Pathology acquisitions 12.0% 4 – Regulatory impacts (fee cuts, collection centres) 5 – Forecast FY ‘
Slide 12: Return on Invested Capital (ROIC) – USA and Germany
Return on Invested Capital (ROIC) USA and Germany Critical mass and significant infrastructure platforms established in both markets (Phase 1) Synergistic bolt-on acquisitions (Phase 2) Current focus on organic growth, synergy capture, margin expansion and ROIC accretion (Phase 3) Initial RO
Slide 13: Revenue Split
Revenue Split FY ’11 IPN $221 Radiology 7% $362 Australia New Zealand 12% $65 2% $923 Switzerland 30% $71 2% Belgium $92 3% UK & Ireland $94 3% Germany $541 USA 18% $721 23% Statutory revenue in A$ M
Slide 14: Sonic Australian Pathology
Sonic Australian Pathology Operations Sonic Australian pathology division – H2 turnaround Follows fee cuts, low market growth, collection centre deregulation H2 ‘11 vs H2 ‘10: Revenue growth 6%, margin expansion 190 bps Organic growth returned to market Oct 2010 Sonic’s volume growth H2 ‘1
Slide 15: USA
USA Revenue growth 17% Margin expansion* ongoing FY ‘11 60 bps FY ‘10 50 bps FY ‘09 200 bps Synergy programs active Procurement, IT standardisation, centralisation, benchmarking Sonic’s Apollo IT platform rolled out into third Sonic US lab In-sourcing >150 new esoteric tests into e
Slide 16: Europe – Germany
Europe Germany Revenue growth 7% Margin expansion* ongoing FY ’11 120 bps FY ’10 20 bps FY ’09 100 bps Berlin head office coordinating national synergy drive Procurement tenders Courier network rationalisation In-sourcing of esoteric tests Lab mergers continuing – two in H1 FY ‘1
Slide 17: Europe – UK/Ireland, Belgium, Switzerland
Europe UK/Ireland, Belgium, Switzerland UK and Ireland Strong revenue and earnings growth in UK BMI contract (70 hospitals) – implementation well-advanced, revenue and earnings to commence in FY ‘12 Irish cytology contract successful Government and private hospital outsourcing opportunitie
Slide 18: Sonic Imaging, Medical Centres – IPN
Sonic Imaging Medical Centres – IPN Sonic Imaging Revenue growth 2% Margin expansion 100 bps Ongoing focus on cost control, efficiency gains, Sonic synergies Completed roll-out of Sonic broadband network Improved performance despite inadequate Government funding IPN Revenue growth 21
Slide 19: Sonic Debt Summary
Sonic Debt Summary Investment Grade Credit Metrics 30 Jun ‘11 30 Jun ‘10 Net interest-bearing debt A$M 1,536 1,501 Gearing ratio % 37.9 37.0 Interest cover X 7.4 9.4 Debt cover X 2.8 2.6 All debt drawn in foreign currencies and affected by exchange rates Available headroom ~A$370 million after f
Slide 20: Interest and Tax Expense
Interest and Tax Expense FY ‘11 FY ‘10 CHANGE A$M Constant Currency % Interest Expense 73.7 48.8 51% Tax Expense 100.2 92.8 8% A$25 million additional interest expense ~A$12 million – interest on additional debt to fund acquisitions since July 2009 ~A$13 million – higher interest rates due to
Slide 21: Outlook
Outlook Underlying company strength – all divisions performing well Australian pathology – strong market position / business turnaround USA – margin expansion / ROIC accretion Europe – margin expansion / ROIC accretion Imaging – improving performance despite tough market A$620 million (i
Slide 22: Thank You
SONIC HEALTHCARE Thank You aa oe eS + = * = =—= 7 INS