Sonic Healthcare Limited · ASX:SHL
Sonic Healthcare — FY2007 Earnings Presentation
33 slides from Sonic Healthcare's earnings presentation, Aug 23, 2007
Slide 1: Financial and Operational Review
Financial and Operational Review Year to 30 June 2007 Dr Colin Goldschmidt CEO and Managing Director 23 August 2007
Slide 2: FY 2007 Highlights
FY 2007 Highlights ` Sonic delivers record earnings result – guidance achieved ` Net profit up 15% ` Earnings per share up 12% ` Full-year dividend up 12% ` Australian Pathology performing strongly ` US and UK entities deliver strong results ` Result held back by Imaging and NZ Pathology ` Sonic sec
Slide 3: 2007 Financial Highlights
2007 Financial Highlights Growth 2007 vs 2006 Revenue 14% EBITA 12% NPAT 15% EPS 12% Dividend (full-year) 12% > POMS HEALTHCARE
Slide 4: FY 2007 Guidance Delivered
FY 2007 Guidance Delivered FY 2007 Actuals Revenue one 06. A$|,805M | A$I,886M 14% ~10% EPS growth : Earnings per Share onF 06 _ 64.5¢ 65.5¢ 12% > SONIC HEALTHCARE
Slide 5: FY 2008 Guidance
FY 2008 Guidance ` Revenue growth 20 – 25% ` Earnings per share growth >12% Variables: ` Acquisition settlement timing ` Assumes capital raising ` Foreign exchange rates ` Interest rates ` No German synergies assumed in 2008
Slide 6: Revenue FY 2007
Revenue FY 2007 ` Organic revenue growth (excluding acquisitions) ~7% ` Australian pathology revenue growth ~9% ` Strong revenue growth Sullivan Nicolaides Pathology, Melbourne Pathology, Douglass Hanly Moir Pathology, Clinipath ` US organic revenue growth well above market at ~14% ` UK laboratory r
Slide 7: Revenue Growth FY 2008
Revenue Growth FY 2008 ` Acquisitions impacting 2008 revenue ` AEL – acquired 8 January 2007 ` Medica – acquired 30 May 2007 ` Sunrise – acquired 31 July 2007 ` Bioscientia – signed 13 August 2007 ` New acquisitions ` Australia/NZ pathology ` Australia – anticipate 6-8% revenue growth ` New Zealand
Slide 8: Sonic Revenue Mix
Sonic Revenue Mix FY 2007 FY 2007 (Actuals) (Acquisitions normalised*) * Includes full year revenue of acquisitions completed or announced to 23 August 2007
Slide 9: Sonic Revenue Mix
Sonic Revenue Mix 2007 with acquisitions normalised* * Includes full year revenue of acquisitions completed or announced to 23 August 2007
Slide 10: Annual Revenue
Annual Revenue = Forecast FY 2008 revenue at 25% increase on FY 2007
Slide 11: Earnings Growth
os arnings Growth FY 2007 FY 2006 Movement EBITDA 405.7 360.3 13% EBITA (A$M) 343.6 306.0 12% NPAT (A$M) 198.1 172.0 15% EPS (cents) 65.5 58.6 12% Cash Generation (A$M) 267.9 247.2 8% > SONIC HEALTHCARE
Slide 12: Earnings per Share
Earnings per Share EPS and EPS Growth
Slide 13: Earnings Margins
Earnings Margins ` Margin dilution ` Radiology margins – Low revenue growth and cost pressures associated with radiologists’ remuneration restructuring ` Margin dilution from USA acquisitions – Lower margins than average of Sonic’s other businesses ` Australian pathology delivered margin expansion o
Slide 14: Dividend
Dividend ` Dividend fully franked at 30% ` Record Date 5 September 2007 ` Payment Date 20 September 2007 ` Dividend Reinvestment Plan remains suspended
Slide 15: Full-year dividend History
Full-year dividend 13 Year History
Slide 16: Balance Sheet Summary
Balance Sheet Summary 30.6.07 30.6.06 Receivables (current) $M 247.6 188.4 Intangibles (net) $M 2,149.4 1,690.2 Total Interest-bearing Debt $M 1,175.3 810.7 Equity $M 1,438.4 1,302.3 Gearing (Net IB Debt / Equity) % 79 57 Net Interest-bearing debt / EBITDA x 281 2.06 Interest Cover (EBITDA / Net Int
Slide 17: Debt / Capital Structure
Debt / Capital Structure ` Current interest bearing debt ~A$1.4 billion ` Debt at 30 June 2007 – A$1,175 million ` Plus acquisitions of Sunrise, Schottdorf minorities, forex movements ` Bioscientia not yet included ` Current headroom ~A$480 million including bridge facilities (pre- Bioscientia) ` A$
Slide 18: Purpose of Capital Raising
Purpose of Capital Raising ` Capital raising to partly refinance existing bridge facilities ` Acquisitions of >A$1 billion in past nine months: ` Bioscientia ` Schottdorf Group minorities ` Sunrise Medical Laboratories ` Medica Laboratory Group ` Clinical Pathology Laboratories minorities ` American
Slide 19: Operational Overview: Markets and Opportunities
Operational Overview Markets and Opportunities
Slide 20: Australian Pathology
Australian Pathology ` Revenue growth of Australian pathology division – 9% ` Strong growth of large Australian laboratories ` Douglass Hanly Moir Pathology (NSW) ` Sullivan Nicolaides Pathology (Queensland) ` Melbourne Pathology (Victoria) ` Clinipath (Western Australia) ` Sonic Australian patholog
Slide 21: New Zealand Pathology
New Zealand Pathology ` Judicial Review over Auckland laboratory contract ` Landmark victory to Sonic / DML in March 2007 ` DML awarded interim 18-month contract ` Appeal process will be heard in 2008 ` Overwhelming community and medical support for DML ` Unprecedented loyalty and commitment of DML
Slide 22: Sonic Imaging
Sonic Imaging ` Revenue Growth ` FY 2007 revenue of A$327 million, with growth of 4% over FY 2006 ` NZ radiology revenue growth strong ` Queensland X-Ray and SKG growth at market; Castlereagh Imaging below market ` Hong Kong radiology business sold in first half of year ` Earnings margins ` Impacted
Slide 23: IPN
IPN ` IPN continues to perform strongly ` Financial highlights (based on continuing operations) ` Revenue up 13% to A$95 million ` EBITDA up 23% to A$15 million ` Net profit up 44% to A$8 million ` General Practitioners working in IPN centres ` GPs have increased by >100 to 711 through FY 2007 ` IPN
Slide 24: UK: TDL financial performance FY 2007
UK ` TDL financial performance FY 2007 ` Strong revenue and earnings growth ` Ongoing margin expansion ` Ealing contract ` Sonic/TDL won contract in early 2007, commenced 1 July 2007 ` A multi-million pound contract over 5 years ` Synergies between Ealing and TDL labs in London ` NHS Outsourcing ` A
Slide 25: USA
USA ` Sonic entered US lab market in late 2005 ` Acquisitions ` CPL – 82% in October 2005 ` AEL – January 2007 ` CPL minorities – January 2007 ` Sunrise Medical Laboratories – July 2007 ` Other small acquisitions in 2006/7 (Cognoscenti, Mullins) ` Sonic annualised revenue now >A$500 million ` Sonic
Slide 26: USA – Sunrise Medical Laboratories
USA – Sunrise Medical Laboratories ` Sonic acquired Sunrise in July 2007 ` Full service laboratory based on Long Island, New York ` Annual revenues US$75 million ` 16 patient service centres ` Employs ~360 staff ` Contracts with all major insurance companies ` Strong growth potential ` History of st
Slide 27: Sonic Healthcare USA Annual Revenues
Sonic Healthcare USA Annual Revenues (A$M)
Slide 28: Switzerland
Switzerland ` Sonic acquired Medica Laboratory in May 2007 ` Medica’s main laboratory is based in Zurich ` Service provision throughout Switzerland ` Excellent cultural fit with Sonic ` Reputation for service and scientific excellence ` Strong organic growth ongoing ` Management ` Founder Dr Franz K
Slide 29: Germany - Bioscientia
Germany - Bioscientia ` Sonic announced acquisition of Bioscientia on 13 August, 2007 ` Settlement expected by October 2007 ` Bioscientia ` One of Europe’s top laboratories and one of five national labs in Germany ` Central laboratory located in Ingelheim, near Frankfurt ` 20 branch laboratories thr
Slide 30: Germany
Germany ` Sonic has signed agreement to acquire outstanding 44% of Schottdorf Group (12% acquired to date) ` Collaboration between Bioscientia and Schottdorf ` Synergy potential – purchasing , couriers, duplicated laboratories, centralisation of testing, sales, marketing, IT etc ` Expect synergy ben
Slide 31: Future Growth
Future Growth
Slide 32: Future Growth
Future Growth ` European laboratory market ` Entered UK in 2002, Germany in 2004, Switzerland in 2007 ` Annualised revenue now >A$500 million ` Large market with future synergy and acquisition prospects ` USA laboratory market ` Entered market in 2005, ` Annualised revenue now >A$500 million ` Large
Slide 33: Thank you
Thank you = Sea" SONIC HEALTHCARE lf SONIC HEALTHCARE