Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — Australia and New Zealand 6th Annual Investment Conference 2009
28 slides from Ramsay Health Care's conference presentation, Mar 10, 2009
Slide 1: Australia and New Zealand 6th Annual Investment Conference
For personal use only Australia and New Zealand 6th Annual Investment Conference London 9 March, 2009 Christopher Rex, Managing Director
Slide 2: Agenda
AGENDA For personal use only • About Ramsay Health Care • Remarkable growth story • Formula for success – Management & culture – Strong growth strategy – Financially disciplined • Half-year financial overview • Australian market dynamics • Rationale for offshore expansion • UK market dynamics • Stra
Slide 3: About Ramsay Health Care
ABOUT RAMSAY HEALTH CARE For personal use only • Established in 1964 • Listed on the Australian Stock Exchange in September 1997 • Since become Australia’s largest private hospital operator, approx. 30% market share • In top 75 Australian-listed companies by market capitalisation • Expanded offshore
Slide 4: Remarkable Growth Story
REMARKABLE GROWTH STORY For personal use only AT LISTING TODAY (Sept 1997) More than 100 hospitals and facilities 11 hospitals • 65 in Australia • 3 in Indonesia • 38 in the UK More than 8,400 beds 1,351 beds • 6,724 in Australia • 615 in Indonesia • 1,098 in the UK 2,000 staff Approx. 25,000 staff
Slide 5: Australia & Indonesia
AUSTRALIA & INDONESIA For personal use only Ramsay Health Care is Australia’s largest operator of private hospitals Australia – 65 Western Australia – 4 South Australia – 3 Victoria – 16 New South Wales – 27 Queensland – 15 Indonesia – 3 5 5
Slide 6: United Kingdom
UNITED KINGDOM For personal use only England – Hospitals – 25 Day surgery facilities – 11 Neuro-rehabilitation homes – 2 Diagnostic services 6
Slide 7: Revenue Growth Milestones
REVENUE GROWTH MILESTONES For personal use only Capio UK Acq. Nov’07 Affinity Acq. Apr’05 Benchmark Acq. Jul’04 Greenslopes Major Exp. Opened May’03 Revenue Hollywood Major Exp. Opened Jul’02 Alpha Acq. May’01 Greenslopes Acq. Feb’95 North Shore Private Hosp. Opened Jul’98 Hollywood RHC Listed Sep’9
Slide 8: Formula for Success – Management & Culture
FORMULA FOR SUCCESS – MANAGEMENT & CULTURE For personal use only • The Ramsay vision – To deliver high quality care while ensuring long term profitability • Long term, stable management team – Benchmarked operational leaders – Good relationship with key industry players • Special culture (“The Ramsa
Slide 9: Formula for Success – Strong Growth Strategy
FORMULA FOR SUCCESS – STRONG GROWTH STRATEGY For personal use only • Ramsay has three major drivers of growth: – Organic growth: • Underpinned by patient demographics • Quality portfolio of hospitals • Continual business management improvement – Brownfields: • Investing A$580 million (net) to expand
Slide 10: Formula for Success – Financially Disciplined
FORMULA FOR SUCCESS – FINANCIALLY DISCIPLINED For personal use only • Growth only pursued if financial and strategic criteria and investment hurdles are satisfied – Targeting 15% ROI over the short-to-medium term • Willing to consider investments outside hospitals if financial criteria are met and i
Slide 11: Growth Strategy Delivering Strong Returns
GROWTH STRATEGY DELIVERING STRONG RETURNS For personal use only Ramsay Total Shareholder Return Feb-09 11 Source: Citi
Slide 12: Half-Year Financial Overview
HALF-YEAR FINANCIAL OVERVIEW For personal use only Strong rise in Group net profit six months ended 31 December 2008 • Core Net Profit After Tax up 11.6% to $68.7 million • Core EPS up 11.0% to 33.8 cents • Group revenues up 35.5% to $1.6 billion – Australia and Indonesia revenue up 12.0% to $1.3 bi
Slide 13: Group Financial Performance
GROUP FINANCIAL PERFORMANCE For personal use only HALF YEAR ENDED 31 DECEMBER 2008 2007 % Increase $m $m Continuing Operations Australia & UK (1) Group (1) Group (1) Indonesia Operating Revenue 1,264.1 343.6 1,607.7 1,186.7 35.5% EBITDAR (2) 183.8 74.1 258.0 177.1 45.6% EBITDA 171.4 30.4 201.8 157.0
Slide 14: Group Core NPAT and EPS
GROUP CORE NPAT AND EPS For personal use only CORE NPAT 80.0 70.0 68.7 60.0 61.5 61.5 50.0 54.8 56.2 $m 40.0 46.2 30.0 20.0 10.0 • Group core 0.0 Jun'06 Jun'07 Jun'08 Dec'06 Dec'07 Dec'08 NPAT up 11.6% Half Year Ended CORE EPS • Group core EPS 38.0 up 11.0% 34.0 33.8 11.0% Cents/Share 30.0 30.3 30.4
Slide 15: Interim Dividend
INTERIM DIVIDEND For personal use only Final Dividend Interim Dividend 18 16 17.5 16.5 Cents/Share 10.0% 16.0 14 15.0 12 13.5 13.0 10 8 6 Jun'06 Jun'07 Jun'08 Dec'06 Dec'07 Dec'08 • Interim dividend up 10.0%, tracking growth in core EPS of 11.0% • Capacity to grow dividends highlights resilience of
Slide 16: Strong Cash Flow and Capital Management
STRONG CASH FLOW AND CAPITAL MANAGEMENT For personal use only • Ramsay is very focused on cash flow and working capital management • High cash conversion of EBITDA to gross operating cash flow of over 100% • Business generates strong and consistent cash flow which underwrites debt servicing • Ramsay
Slide 17: Strong Cash Flow and Capital Management (cont)
STRONG CASH FLOW AND CAPITAL MANAGEMENT (cont) For personal use only • Ramsay adopts a conservative approach to management of interest rate exposure • Leverage ratio (net debt/EBITDA) currently 3.5 x and well within bank covenants • Leverage ratio is expected to trend down as a result of increased p
Slide 18: Financial Performance - Australia & Indonesia
FINANCIAL PERFORMANCE - AUSTRALIA & INDONESIA For personal use only HALF YEAR ENDED 31 DECEMBER 2008 2007 % Continuing Operations $m $m Increase Operating Revenue 1,264.0 1,127.5 12.1% EBITDAR 183.8 165.3 11.2% EBITDA 171.4 153.8 11.4% EBIT 134.1 120.9 10.9% • Australia and Indonesia, the Group’s hi
Slide 19: Operational Highlights – Australia & Indonesia
OPERATIONAL HIGHLIGHTS – AUSTRALIA & INDONESIA For personal use only • Australia & Indonesia revenue growth up 12.1% • Australia & Indonesia EBIT growth up 10.9% • Australia & Indonesia EBITDA hospital margins (excluding prostheses) rose to 18.2% from 18.0% • Total admissions for Ramsay’s Australian
Slide 20: Operational Highlights – UK
OPERATIONAL HIGHLIGHTS – UK For personal use only • NHS (National Health Service) work is continuing to grow in private hospitals, now comprises more than 40% of Ramsay UK admissions, up from 20% a year ago • Whilst NHS volumes grow, PMI (Private Medical Insurance) remains stable • Patient referrals
Slide 21: Ramsay UK – Growth of 'Choose and Book'
RAMSAY UK – GROWTH OF ‘CHOOSE AND BOOK’ For personal use only 08 09 Monthly Appts Booked Source: Connecting for Health 21
Slide 22: Australian Market Dynamics
AUSTRALIAN MARKET DYNAMICS For personal use only • Bipartisan support for a balanced health care system • 30% Government tax rebate for private health insurance membership • 44.8% of all Australians covered by private health insurance 22
Slide 23: Australian Market Dynamics (cont)
AUSTRALIAN MARKET DYNAMICS (cont) For personal use only • Government legislative and regulatory support • Favourable demographics (i.e. ageing population) • Private health care largely funded by consumers and is inexpensive for the service provided – Very different environment from USA for example 2
Slide 24: Rationale for Offshore Expansion
RATIONALE FOR OFFSHORE EXPANSION For personal use only • Competition constraints means it is difficult for Ramsay to make significant hospital acquisitions in Australia • Ramsay can export its proven management model and blend it with local expertise – Ability to run our business on relatively low r
Slide 25: UK Market Dynamics
UK MARKET DYNAMICS For personal use only • Exciting market dynamics – Major reform in publicly funded health care – Patient Choice in the process of becoming a legal right – Government committed to sustaining its investment in the NHS, despite the economic downturn – Relatively stable PMI market – A
Slide 26: Strategy for Ramsay UK
STRATEGY FOR RAMSAY UK For personal use only • Integration largely complete – Remaining work focused on improvements and efficiencies • Focused on developing and growing the business • Ramsay has approved £28 million to be spent over 2009 and 2010 financial years for improvements and capital expansi
Slide 27: Outlook
OUTLOOK For personal use only • Ramsay’s underlying business remains solid and tracking in line with expectations • Ramsay is well positioned in current climate • Strong industry fundamentals to underpin future growth • Ramsay UK on track to be EPS accretive in FY09, one year ahead of schedule (as p
Slide 28: Questions
For personal use only QUESTIONS
Ramsay Health Care — Australia and New Zealand 6th Annual Investment Conference 2009 on 6ix