Healius Limited · ASX:HLS
Healius — FY2021 Earnings Presentation
35 slides from Healius's earnings presentation, Aug 30, 2021
Slide 1: FY 2021 Results
FY 2021 Results Year ended 30 June 2021 30 August 2021
Slide 2: Pivotal role in country's response to COVID-19 pandemic
Pivotal role in country’s response to COVID-19 pandemic Huge effort by all staff with 5.75 million COVID-19 PCR tests to date • Reconfiguring laboratories and investing in equipment to perform PCR testing • Setting up and servicing multiple COVID testing centres • Sourcing reagents, equipment, PPE,
Slide 3: Building a sustainable business
Building a sustainable business Our Business Our Shareholders Our People Our Communities Our Customers Sustainable Improvement Streamlined portfolio Extra 3 days leave to all Focus went far beyond Commitment to carbon Program aptly named with delivering higher returns over Christmas budgeted metrics
Slide 4: Group results
Group results 1 2 Group Underlying Reported $m FY 2021 FY 2020 FY 2021 FY 2020 Revenue 1,913.1 1,572.4 1,900.7 1,557.0 EBIT 266.5 129.0 255.4 92.1 NPAT (Reported inc. discontinued operations) 148.4 53.1 43.7 (70.5) Cash flow from operating and investing activities 912.9 285.0 Dividend cps 100% frank
Slide 5: Pathology
Pathology Underlying FY 2021 FY 2020 Better/ $m $m (worse) % 1 Revenue 1,452.1 1,160.1 25.2 EBITDA 428.3 274.2 56.2 Depreciation (168.2) (143.5) (17.2) Amortisation (7.3) (6.3) (15.9) EBIT 252.8 124.4 103.2 Total capital expenditure 32.5 36.9 11.9 Revenue up 25% and EBIT up 103% • Extensive COVID-19
Slide 6: Imaging
Imaging Underlying Better/ FY 2021 FY 2020 $m $m (worse) % Revenue 406.9 376.7 8.0 EBITDA 84.5 70.2 20.4 Depreciation (50.8) (45.8) (10.9) Amortisation (2.8) (2.5) (12.0) EBIT 30.9 21.9 41.1 Total capital expenditure 18.6 13.4 (38.8) Revenue up 8% and EBIT up 41% • Revenue up, with a strong 2H 2021
Slide 7: Day Hospitals
Day Hospitals Underlying FY 2021 FY 2020 Better/ $m $m (worse) % Revenue 49.5 37.4 32.4 EBITDA 15.5 9.7 59.8 Depreciation (6.5) (6.0) (8.3) Amortisation 0.0 0.0 n.a. EBIT 9.0 3.7 143.2 Total capital expenditure 2.9 2.9 0.0 Significant growth1 • Strong top line growth, with Montserrat hospitals contr
Slide 8: Corporate
Corporate Underlying Better/ FY 2021 FY 2020 $m $m (worse) % Revenue1 6.8 0.1 n.a. EBITDA (14.5) (10.4) (39.4) Depreciation (8.0) (7.5) (6.7) Amortisation (3.7) (3.1) (19.4) EBIT (26.2) (21.0) (24.8) Total capital expenditure 5.8 9.7 40.2 Corporate overheads remain tightly controlled, under 2% of co
Slide 9: Sustainability
Sustainability Comprehensive review in progress to embed Sustainability across the Group Environmental Initiatives • Stated goal to become carbon neutral by FY 2025 • 34,000 CO2-e scope 1 & 2 emissions in FY2021 (33,000 from Continuing Operations) • Rolled-out solar panels & LED lights, consolidated
Slide 10: Trading update
Trading update Very strong COVID-19 testing with emergence of Delta in Australia Pathology • Surge in COVID testing, especially in NSW, resulting in strong revenue • COVID test numbers average above 40k per working day • Non-COVID revenue ahead of pcp Imaging • Revenue slightly ahead of pcp with NSW
Slide 11: Capital management
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Slide 12: Capital Management
Capital Management Delivering substantial improvement in shareholder returns Capital Management Review December 2020 Outcomes Options to deploy the HPC sale proceeds On-market share buy-back $101 million completed by June 2021 (24.35 million shares at average of $4.14 per share) Sustainable di
Slide 13: Capital position
Capital position Strong balance sheet and cash conversion at 106% Increasing cash generation Reduction in capital requirements Flexible balance sheet Gross Free cash flow1 Capital Expenditure Net debt2 operating cash flow 777 678 666 +41% -40% +38% 122.0 571.9 405.2 486.0 48.1 73.4 351.0 13.5 Contin
Slide 14: Sustainable Improvement Program
Sustainable Improvement Program
Slide 15: Cost management performance
Cost management performance Disciplined cost management: Costs +12% (before D&A) Revenue +22% +22% COVID volumes and recovered BAU while reallocating staff and 1,914 Revenue managing spend Cost management discipline and cost control initiatives 255 EBIT +177% Savings through SIP 1,570 Mostly increas
Slide 16: Sustainable Improvement Program Outcomes
Sustainable Improvement Program Continued progress on strategic commitments SIP Phase I SIP Phase II • $70 million by FY 2021/22 • 300 bps margin expansion by FY 2023 • • Growing capabilities in data-led operations, consumer-centricity, product Target Target Addressable savings innovation, network o
Slide 17: Capital Investment
Capital Investment Additional investment planned for FY 2022 Focus on growth & maintenance Operating Cash Flow Expenditure: Ratios capex investment in FY22 Investing in the digital, commercial FY21 FY22 and operational in Pathology and Imaging under SIP: 14.6% • Pathology information systems • Advan
Slide 18: Healius Digital in Pathology
Healius Digital in Pathology Continuing our technology modernisation Current LIS is working well and has stood the test of COVID volumes • Over 5.75 million COVID-19 tests conducted over normal testing • Deployed QR-code based digital order automation for COVID • Launched eCommerce portal for Travel
Slide 19: Healius Group today
Healius Group today tthealius
Slide 20: FY 2021 in review
FY 2021 in review Year in review Results Focus went far beyond budgeted metrics to ensuring we played a Record EBIT of $266.5 million with strong trading in Pathology, pivotal role in Australia’s public health response to the pandemic underpinned by COVID testing, and high growth in Montserrat
Slide 21: A specialist diagnostic and day hospitals business
A specialist diagnostic and day hospitals business With the successful sale of Medical Centres, we are focused on leveraging established market positions, management capability and scalability in Pathology, Imaging and Day Hospitals Pathology Imaging Day Hospitals • Scale player in mature market (#2
Slide 22: A market leading network
A market leading network Australia-wide coverage 14 Total Sites 612 Total Sites 2,251 Total sites 14 197 Total Sites 576 30 6 2,105 2,010 ACCs Pathology 95 Laboratories 43 Total Sites 187 5 5 757 Total Sites 37 6 12 11 Montserrat ACT Day Hospitals 1 Brookvale Day Hospital 36 Total Sites 700 56 1 33
Slide 23: Appendices
Appendices tthealius
Slide 24: Divisional Reconciliation
Divisional Reconciliation Underlying EBIT FY 2021 1 Pathology Imaging Day Hospitals Corporate Group $m Revenue 1,452.1 406.9 49.5 6.8 1,913.1 EBITDA 428.3 84.5 15.5 (14.5) 513.8 Depreciation (168.2) (50.8) (6.5) (8.0) (233.5) Amortisation (7.3) (2.8) 0.0 (3.7) (13.8) EBIT 252.8 30.9 9.0 (26.2) 266.5
Slide 25: FY 2020 Restatement reconciliation
FY 2020 Restatement reconciliation Underlying EBIT FY 2020 Restatement Continuing Pathology Imaging Day Hospitals Corporate $m Operations EBIT per FY20 Presentation 115.1 17.2 (6.8) (22.8) 102.7 AASB 16 9.3 4.6 0.8 1.8 16.5 Discontinued operations 0.0 0.0 9.7 0.0 9.7 Restated EBIT 124.4 21.9 3.7 (21
Slide 26: Underlying v reported reconciliation
Underlying v reported reconciliation FY 2021 Underlying EBIT 266.5 Key items Strategic projects (11.3) Including Pathology information systems upgrades Montserrat deferred consideration expense (3.0) Finalisation of Montserrat settlement Reinstatement of transactions with discontinued 4.3 Net rental
Slide 27: Discontinued Operations
Discontinued Operations FY 2021 FY 2020 $m $m HPC (24.0) (142.5) Adora 1.4 (11.4) Loss after tax from discontinued operations (22.6) (153.9) • $24 million loss on HPC sale includes $13 million additional loss in 2H21 ($11 million 1H21) due to: o indemnification to the purchaser in connection with ba
Slide 28: Tax case 2003-2007
Tax case 2003-2007 • Healius was advised in 2015 by the Commissioner of Taxation (“the Commissioner”) that lump sum payments made by it to healthcare practitioners for the financial years 2010 to 2014 were tax deductible • Healius subsequently filed an application for similar tax deductions for the
Slide 29: AASB 16: Key impacts FY 2021
AASB 16: Key impacts FY 2021 AASB 16, which removes the distinction between operating and finance leases, was adopted on 1 July 2019. It has no economic impact on Healius, nor on its covenants, cash flows or shareholder value. In FY 2020 it was not included in underlying results in order to ensure c
Slide 30: AASB 16: Key impacts FY 2021
AASB 16: Key impacts FY 2021 P&L FY 2021 FY 2021 $m $m Property & other expenses 217.9 Operating lease expense reversed EBITDA 217.9 Depreciation (195.4) Depreciation of right of use asset recognised EBIT 22.5 Finance costs (34.0) Interest paid on lease liability recognised Profit before tax (11.5)
Slide 31: AASB 16: Key impacts FY 2021
AASB 16: Key impacts FY 2021 Cash Flow FY 2021 FY 2021 $m $m Gross cash flows from operating activities 242.6 Operating lease payments reversed from gross operating cash flows Net cash provided by operating activities 242.6 Interest paid on lease liabilities (39.5) Payments of lease liabilities (203
Slide 32: Financial impacts of individual leases over time
Financial impacts of individual leases over time Key P&L Description Illustration Forward Outlook P&L Impact Impact Driver • Interest reduces over time as • Operating lease lease liability reduces NEW payments previously P&L impact will reverse LEASES recognised as an • AASB 16 Less favourable to as
Slide 33: Cash flow bridge
Cash flow bridge 913 72 203 460 572 46 526 154 486 40 34 556 -72 Gross Tax Operating Maintenance Free cash Growth capex Capital Cash flow Interest Lease Dividend Repayment Net decease operating cash flow capex flow recycling after investing Incl lease payments and share of borrowings in cash cash fl
Slide 34: Disclaimer
Disclaimer This presentation has been prepared by Healius Limited (ACN 064 530 516) (‘HLS’). Material in this presentation provides general background information about HLS which is current as at the date this presentation is made. Information in this presentation remains subject to change without n
Slide 35: tihealius
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