Sonic Healthcare Limited · ASX:SHL

Sonic Healthcare — H1 FY2022 Earnings Presentation

25 slides from Sonic Healthcare's earnings presentation, Feb 21, 2022

  1. Slide 1: CEO Presentation – Half-Year Results to 31 December 2021

    21 February 2022 The Manager – Listings Australian Securities Exchange Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2000 Via electronic lodgement Dear Sir / Madam CEO PRESENTATION – HALF-YEAR RESULTS TO 31 DECEMBER 2021 At 10.00am AEDT today, Dr Colin Goldschmidt, Chief Executive Officer, wil

  2. Slide 2: Financial and Operational Review

    Financial and Operational Review Half-year ended 31 December 2021 Colin Goldschmidt CEO, Sonic Healthcare 21 February 2022

  3. Slide 3: 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

  4. Slide 4: Headlines

    Headlines  Record financial performance driven by pandemic testing and base business growth  H1 FY 2022 results  Revenue A$4.8 billion (7% growth)  EBITDA A$1.5 billion (18% growth)  Net profit A$828 million (22% growth)  Acquisitions  A$585 million invested in period, with active pipeline of

  5. Slide 5: Financial Summary

    Financial Summary A$ million (Actual Currency) H1 FY 2022 H1 FY 2021 Growth Revenue 4,757 4,432 7% EBITDA 1,540 1,307 18% Net profit 828 678 22% Cash generated from operations 1,041 810 28%  Revenue and earnings  Result demonstrates strong operating leverage in laboratory division, with significan

  6. Slide 6: Revenue

    Revenue  H1 FY 2022 base business revenue* Base business COVID  Up 4.3% on H1 FY 2021 $5.0  Up 2.5% on H1 FY 2020 (pre-pandemic)  Expect ongoing growth of base business – strong underlying $4.5 drivers, including catch-up of testing postponed through pandemic $4.0  H1 FY 2022 COVID revenue $3.5

  7. Slide 7: H1 FY 2022 Revenue Split

    H1 FY 2022 Revenue Split SCS/Other A$223M NZ 5% A$17M Radiology A$353M Belgium 7% A$96M 2% Australia A$1,349M Switzerland 28% A$311M 7% Revenue in A$ millions UK A$373M Total Revenue A$4,757 million (including A$1 8% million interest) SCS / Other = Sonic Clinical Services (IPN Medical Centres, Sonic

  8. Slide 8: Australian Pathology

    Australian Pathology  H1 FY 2022 revenue  Base business organic growth 1%, reflecting effects of pandemic  COVID revenue growth 215%  Operations  Contract to provide COVID testing in aged care facilities for Federal Department of Health extended to at least June 2022 Australia  COVID PCR Medic

  9. Slide 9: USA

    USA  H1 FY 2022 revenue (constant currency)  Base business organic growth 4%  COVID revenue down 34%  Operations  ProPath acquisition completed December 2021, integration proceeding well  PAMA (Medicare Clinical Laboratory Fee Schedule) fee reductions deferred to January 2023, annual impact ~U

  10. Slide 10: Germany

    Germany  H1 FY 2022 revenue (constant currency)  Base business organic growth 6%  COVID revenue down 15%  Operations  COVID testing reached unprecedented levels during January and early February 2022  Ongoing utilisation of COVID PCR testing, school/government screening, sequencing of variants

  11. Slide 11: UK

    UK  H1 FY 2022 revenue (constant currency)  Base business organic growth 31% (16% growth on H1 FY 2020)  Strong private and NHS base business growth including recovery from pandemic impact in prior period  COVID revenue down 20% (volumes up, revenue impacted by public/private referral mix)  Ope

  12. Slide 12: Switzerland

    Switzerland  H1 FY 2022 revenue (constant currency)  Base business organic growth 4%  COVID revenue growth 15%  Operations Switzerland A$311M  Additional COVID PCR testing capacity installed in early 2021, fully 7% utilised during Delta and Omicron waves  Participation in large-scale cantonal

  13. Slide 13: Belgium

    Belgium  H1 FY 2022 revenue (constant currency)  Base business down 5%  COVID revenue down 2%  Operations Belgium  Strong COVID testing volumes in January and February 2022 A$96M 2%  Successful core lab instrumentation and automation upgrades Sonic Healthcare Results H1 FY 2022 12 21 February

  14. Slide 14: Radiology

    Radiology  H1 FY 2022 revenue and earnings  Revenue growth 16%, including contributions from Epworth Medical Imaging (EMI) and Canberra Imaging Group acquisitions  Organic revenue growth 3%  EBITDA growth 7% Radiology A$353M 7%  Margin compression due to pandemic impacts and relatively low marg

  15. Slide 15: Sonic Clinical Services (SCS)

    Sonic Clinical Services (SCS)  H1 FY 2022 revenue and earnings  Revenue growth 7%  Modest earnings growth  Operations SCS/Other A$223M 5%  Medical centres continue to be negatively impacted by pandemic  Occupational Health business has rebounded strongly  Revenue from COVID vaccination initia

  16. Slide 16: Partnership with Harrison.ai

    Partnership with Harrison.ai  Artificial Intelligence (AI) has significant potential to enhance diagnostic accuracy, reproducibility and efficiency in pathology and radiology  Following global search, Sonic elected to partner with Harrison.ai, a world leader in healthcare AI  Harrison.ai partnere

  17. Slide 17: Acquisitions

    Acquisitions  Outlay of A$585 million for synergistic acquisitions/investments in H1 FY 2022 including:  ProPath acquisition (Dallas, TX), revenue US$110 million (December 2021)  Canberra Imaging Group acquisition (Australia), revenue A$60 million (September 2021)  Investment in Harrison.ai and

  18. Slide 18: Capital Management

    Capital Management 31 December 30 June 2021 2021 Net interest-bearing debt A$M 1,054 921 Equity A$M 7,193 6,504  Gearing ratio = Net debt / Net debt + equity (covenant limit <55%)  Interest cover = EBITA / Net interest expense (covenant limit >3.25) Gearing ratio % 12.9 12.5  Debt cover = Net deb

  19. Slide 19: On-Market Share Buy-Back – up to A$500 million

    On-Market Share Buy-Back – up to A$500 million Debt Cover Ratio  Sonic’s gearing currently at record low level Dec 1999 – Dec 2021 3.5  Intention to move towards long-term average gearing 3.0 through a combination of synergistic acquisitions and 2.5 share buy-back 2.0 RATIO (X)  On-market share b

  20. Slide 20: Interim Dividend

    Interim Dividend A$ H1 FY 2022 H1 FY 2021 Growth Interim Dividend $0.40 $0.36 11%  Progressive dividend strategy maintained  Franked to 100%  Record Date 9 March 2022  Payment Date 23 March 2022  Dividend Reinvestment Plan suspended Sonic Healthcare Results H1 FY 2022 19 21 February 2022

  21. Slide 21: Sustainability

    Sustainability  Environment  Global data for Scope 1 and 2 emissions to be reported in Sonic’s FY 2022 Sustainability Report (previously only Australia and UK included)  Australian energy RFP underway, considering renewable options  Accelerating global programs to reduce waste, emissions and ene

  22. Slide 22: Sonic Healthcare Foundation

    Sonic Healthcare Foundation  Establishing the Sonic Healthcare Foundation as part of Sonic’s social commitment to support communities  Sonic has expensed its initial contribution to the Foundation of A$40 million  Mandate to be determined in consultation with Sonic’s global leadership teams  Cha

  23. Slide 23: Outlook – H2 FY 2022

    Outlook – H2 FY 2022 COVID Testing Revenue July 2020 – January 2022 350  Guidance not provided as COVID revenues remain 300 unpredictable  January 2022 constant currency revenue A$818 250 million vs A$693 million in January 2021 (18% growth, A$ MILLION 15% organic) 200  February 2022 COVID testin

  24. Slide 24: Summary

    Summary  Record financial performance driven by COVID testing and growth of base business  Expect COVID testing to continue into future, level dependent on pandemic evolution  Acquisitions of ~$585 million in period, active pipeline of opportunities  Dividend growth of 11% to A$0.40 per share, 1

  25. Slide 25: Thank you

    Sy SONIC SY HEALTHCARE Thank you

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