Netcare Limited · JSE:NTC
Netcare — H1 2019 Earnings Presentation
28 slides from Netcare's earnings presentation, May 2019
Slide 1: Netcare Limited Unaudited Interim Group Results
CARE • DIGNITY • TRUTH • PARTICIPATION • PASSION Netcare Limited UNAUDITED INTERIM GROUP RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2019
Slide 2: Thank you to all our nurses
Thank you to all our nurses -_ for their special care You’re in safe hands [ You’re in safe hands #UeCore
Slide 3: Overview: Firmly Focused on Leading Positive Change in Health and Care Delivery
OVERVIEW: WE ARE FIRMLY FOCUSED ON LEADING POSITIVE CHANGE IN HEALTH AND CARE DELIVERY Challenging Medical scheme Strategy aligned to Steady progress economic membership ensure continued in executing and healthcare remains stagnant value creation and strategic objectives environment with more networ
Slide 4: Financial Overview
FINANCIAL OVERVIEW Revenue Normalised Adjusted HEPS² Interim dividend R10 520m EBITDA¹ from continuing 47.0 cents ▲5.6% R2 106m operations ▲ 6.8% ▲1.3% 84.3 cents ▲2.4%³ 1. Normalised to exclude 2018 impairment of contractual economic interest in BMI Healthcare debt 2. Adjusted to exclude Healthcare
Slide 5: Operational overview
Operational overview
Slide 6: Netcare's Operating Platform
NETCARE’S OPERATING PLATFORM 894 56 National Renal Care Acute hospitals dialysis stations DIALYSIS HOSPITALS (10 520 beds)¹ 21 608 MENTAL 12 Employees EMPLOYEES HEALTH Akeso facilities 2 580 (885 beds) PERSON CENTRED Nurses and HEALTH AND CARE paramedics trained DIGITALLY ENABLED PRIMARY EMERGENCY C
Slide 7: Executing on Our Strategy: Building a Sustainable Competitive Advantage
EXECUTING ON OUR STRATEGY: BUILDING A SUSTAINABLE COMPETITIVE ADVANTAGE Utilising the Quadruple Aim¹ to maximise patient satisfaction and promote the wellness and joy of our healthcare delivery team Implementing medical technologies Creating economic value and and digitalisation for the benefit opti
Slide 8: Hospital and Emergency Services
HOSPITAL AND EMERGENCY SERVICES ▲8.5% ▲±20.0% Funder case total patient days Akeso patient days, management and maturing of hospital networks two hospitals impacting acute opened in 2017 demand and 2018 ▼1.0%¹ Acute occupancy:¹ ▲101 acute patient days Full week: 64.5% specialists (2018: 65.3%) with
Slide 9: Hospital and Emergency Services - Financial Performance
HOSPITAL AND EMERGENCY SERVICES - FINANCIAL PERFORMANCE 31 Mar 31 Mar Rm 2018 2019 % Revenue 9 637 10 129 5.1 Akeso consolidated from H2 2018 EBITDA¹ 2 068 2 110 2.0 Acute hospitals: Operating profit¹ 1 745 1 777 1.8 + ▲4.2% revenue per patient day + ▲1.1% length of stay EBITDA margin¹ (%) 21.5 20.8
Slide 10: Primary Care - Financial Performance
PRIMARY CARE - FINANCIAL PERFORMANCE 31 Mar 31 Mar Rm 2018 2019 % Revenue 329 391 18.8 + Growth from expansion of occupational health offering EBITDA 51 52 2.0 and national day clinic network Operating profit 27 27 + Margins impacted by higher rate of growth in lower margin EBITDA margin (%) 15.5 13
Slide 11: Creating Economic Value: Disciplined Investment
CREATING ECONOMIC VALUE: DISCIPLINED INVESTMENT Continued focus No additional 51 mental health beds on systems, acute beds added, Akeso Parktown: 28 beds digitisation and conversion of Akeso George: reopened March 2019 H1 2019 integration 10 beds to higher with an additional 23 beds demand areas Net
Slide 12: Driving Consistency of Care Through Improved Clinical Outcomes
DRIVING CONSISTENCY OF CARE THROUGH IMPROVED CLINICAL OUTCOMES AND PROCESS MEASURES Providing science-based treatment guidelines benchmarked against international best practice Aimed at Scientifically Collaborating with providing founded in and endorsed by Netcare consistently research and relevant
Slide 13: Heart Attacks: Targeting Rapid Recognition, Treatment and Survival
HEART ATTACKS: TARGETING RAPID RECOGNITION, TREATMENT AND SURVIVAL Based on international benchmarks 2019 target Get patient to ECG within 10 minutes¹ 75.0% of cases Remove blockage within 60 minutes¹ 75.0% of cases Clinical Excellence programme endorsed by the following professional clinical associ
Slide 14: Strokes: Targeting Complete Reversal and Recovery
STROKES: TARGETING COMPLETE REVERSAL AND RECOVERY Netcare’s stroke competency based on criteria of South African Stroke Society (SASS) Comprehensive stroke centre Level 1: 10 units with neuro-intervention Level 2: 19 units Comprehensive stroke centre Level 3: 2 units Stroke-ready facility Level 4: 1
Slide 15: Progress on Creating Netcare's Digital Platform
PROGRESS ON CREATING NETCARE’S DIGITAL PLATFORM Hospitals Netcare 911 Cancer Care + Blueprinting phase of + Fully digitised from receipt + Radiotherapy EMR Electronic Medical Record of a call through to dispatch completed (EMR) project complete and recording of all clinical + Chemotherapy EMR scopin
Slide 16: Transforming Netcare and Our Society
TRANSFORMING NETCARE AND OUR SOCIETY Employee profile Skills development Supplier development¹ Enterprise development 21 608 employees R83m spent R4.6bn (80.0%) of R47m invested 81.5% women 80.0% on black measurable spend: in 16 entrepreneurs employees employees B-BBEE compliant creating 147 jobs 77
Slide 17: Ensuring a Safe and Sustainable Network of Services
ENSURING A SAFE AND SUSTAINABLE NETWORK OF SERVICES Group has 200 generators installed at facilities across the country Largest healthcare All Netcare Netcare CBMH² solar photovoltaic hospitals have UPS¹ has a desalination installation and generators plant capable of in the country, supplying power
Slide 18: Committed to Improving Access to Health Care
COMMITTED TO IMPROVING ACCESS TO HEALTH CARE Netcare Netcare Engaging on committed to actively promoting constructive addressing broader private solutions to Health policy inequality sector participation address challenges in access to in nurse and doctor in access to quality healthcare education pu
Slide 19: Financial review
Financial review
Slide 20: Group Financial Overview
GROUP FINANCIAL OVERVIEW Resilient Akeso results Remain committed Higher average trading result in included for to disciplined debt levels: challenging H1 2019 capital balance sheet and economic management cash generation and healthcare guidelines remain strong environment 20
Slide 21: Summarised Group Statement of Profit or Loss
SUMMARISED GROUP STATEMENT OF PROFIT OR LOSS 31 Mar 31 Mar Rm 2018 2019 % Revenue 9 966 10 520 5.6 After: + HMI costs R28m (2018: R8m) EBITDA¹ 2 080 2 106 1.3 + Non-trading costs R56m Operating profit¹ 1 733 1 748 0.9 (2018: R39m) Interest received – BMI debt 104 + Higher average debt levels Other n
Slide 22: Headline Earnings Per Share (HEPS)
HEADLINE EARNINGS PER SHARE (HEPS)¹ 31 Mar 31 Mar Adjusted HEPS² excluding Cents per share 2018 2019 % BMI debt interest (cents) HEPS (10.6) 80.7 83.9 Adjusted HEPS² Including BMI debt interest 87.7 84.3 (3.9) Less: contribution from BMI debt interest (5.4) Excluding BMI debt interest 82.3 84.3 2.4
Slide 23: Summarised Group Statement of Financial Position
SUMMARISED GROUP STATEMENT OF FINANCIAL POSITION 30 Sep 31 Mar Rm 2018 2019 Assets PPE, goodwill and intangible assets 13 847 13 830 Capex of R497m (2018: 742m) Other non-current assets 1 453 1 529 + Netcare Rand and Netcare Bell Current assets 4 951 5 391 Street hospitals: R55m + 56.9% interest in
Slide 24: Debt
DEBT 31 Mar 30 Sep 31 Mar Rm 2018 2018 2019 Gross debt 6 401 6 176 7 495 + Cash outlay of R1 814m (2018: R1 767m) for capex, Cash (819) (1 371) (1 313) ordinary dividends and tax + Repurchase of shares of R452m Net debt 5 582 4 805 6 182 + Special dividends of R542m Net debt to EBITDA¹ (times) 1.3 1
Slide 25: Debt - Manageable Debt Maturity Profile
DEBT - MANAGEABLE DEBT MATURITY PROFILE Facility utilisation (Rm) Debt maturity profile (Rm) 4 839 1 313 7 495 7 1,794 1,191 2,340 2,163 Utilised Cash Available 2019 2020 2021 2022 2023 25
Slide 26: Guidance
Guidance
Slide 27: Guidance for FY 2019
GUIDANCE FOR FY 2019 Activity EBITDA margin Focus areas Capital expenditure Total patient days Hospital and Efficiencies, ±R1.6 billion ▲3.0% - 3.5% emergency services digitisation full year and quality Strong demand EBITDA margin initiatives for mental health contraction between Acute patient days
Slide 28: Thank you
CARE • DIGNITY • TRUTH • PARTICIPATION • PASSION Thank you