Oceania Healthcare Ltd. · NZX:OCA
Oceania Healthcare — FY2020 Earnings Presentation
40 slides from Oceania Healthcare's earnings presentation, Jul 23, 2020
Slide 1: Results Presentation for the Financial Year Ended 31 May 2020
Results Presentation for the Financial Year Ended 31 May 2020 Meadowbank Stage 5 (co din May 2020)
Slide 2: Agenda
Agenda 01 02 03 04 05 Highlights of FY2020 Update on our Strategy Update on Developments Financial Results Appendices 12 19 29
Slide 3: FY2020 Highlights
1. Underlying EBITDA and NPAT from continuing operations excludes the earnings from sites divested in FY2019 in all reporting periods. Underlying EBITDA & NPAT includes pro forma adjustments in FY2017 to i) adjust for the pre-IPO capital structure by applying the post IPO capital structure retrospec
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Slide 5: FY2020 Highlights (continued)
FY2020 Highlights (continued) ED ocean Our care and village business held up well in the face of COVID-19 and we remain committed to our strategy. Continued commitment to our Aged Care strategy e Short term reduction in care earnings at ramp up and redevelopment sites is more than offset by developm
Slide 6: FY2020 Highlights (continued)
FY2020 Highlights (continued) ED ocean Developments were unavoidably impacted during lockdown but we are back on our sites continuing our build programme and build strategy is unchanged. Development pipeline progress ¢ 176 units and care suites delivered across 6 sites in FY2020. e 481' villas, apar
Slide 7: Executing our Strategy
Executing our Strategy Oceania Healthcare’s 2017 IPO Product Disclosure Statement: Oceania Healthcare is via the Offer and is seeking a listing on the NZX Main Board and ASX. The * reduce debt to provide financial flexibility to pursue future development projects including projects in Oceania’s exis
Slide 8: Executing our Strategy: Transformations delivered
OCEANIA ABI csrHcare new units and care suites since IPO, including opening four new premium care facilities at Meadowbank, The ds, The BayView and Awatere We have deliver Sar Meadowbank ~ Then Maureen Plowman -Then 137 Apartments Completed Apartments Completed
Slide 9: Executing our Strategy: Land optimisation
OCEANIA HEALTHCARE 1 under-utilised land at thes ent stages has unlo: optimisatio Melrose - Then Trevellyn- Then
Slide 10: Executing our Strategy
Executing our Strategy OCEANIA HEALTHCARE In 2ZHY2020 we completed 32 villas at Gracelands (Hawkes Bay) and our new premium facility at Green Gables (Nelson) is near completion Transformations delivered —- Fulfilling our promise since IPO Gracelands - Then Green Gables - Then Green Gables - Now Vill
Slide 11: Executing our Strategy: Care
OCEANIA HEALTHCARE Executing our Strategy Care The status of our care pipeline within the Brownfields Earnings Cycle. H EBITDA/bed Maturity 1 Consent Ramp UP ; Construct H ! Commission 1 vo) je mE 1 T-4 T-3 T-2 T T+ T+2 T+3 T+4 T+S earning ~$23,000/bed. poen----------------------- ! Edencurrently at
Slide 12: On track to deliver our pipeline
On track to deliver our pipeline We are commencing and delivering developments in accordance with our pipeline. A Development progress in FY2020 Developments completed in FY2020 e Stage 1 new care facility (90 care suites) at Awatere (formerly Trevellyn, Hamilton) commissioned in July 2019 e 10 vill
Slide 13: Green Gables completion scheduled for 1HY2021
Green Gables completion scheduled for IHY2021. Scheduled to complete in 1HY2021 a) 28 Apartments
Slide 14: The Bellevue, Christchurch
OCEANIA HEALTHCARE The Bellevue Christchurch Scheduled to complete in FY2021 6 6 22 71 Apartments Care Suites
Slide 15: The BayView, Tauranga
OCEANIA HEALTHCARE The BayView, Tauranga bak? The BayView Tauranga Commenced December 2018 35 Apartments Remainder of Stage 2 scheduled for completion in FY2022 15
Slide 16: Eden completion scheduled for FY2022
Eden completion scheduled for FY2022. Community Centre
Slide 17: Scheduled to commence earthworks in 1HY2021
Scheduled to commence earthworks in 1IHY2021.
Slide 18: Future Outlook
OCEANIA HEALTHCARE Future Outlook Premium units and care beds have increased by over 60% in number since FY2017 (1,046 beds and units as at FY2017 compared to 1,676 beds and units as at FY2020) r 1 ! Premium units and care beds ! 1 will more than double! to i comprise ! I I I 1 ! I 69% of our portfo
Slide 19: Financial Results: Income statement, cash flow, balance sheet, capital structure
Income statement and segmental performance Cash flow statement Balance sheet Capital structure
Slide 20: Income statement notes
⚫ ⚫ ⚫ ⚫ 1. Fair value movement includes impact from right of use asset (Everil Orr village). This is a lease arrangement under which Oceania is the village operator. There is a corresponding rental expense of $19.2m (excluded from Underlying Profit). Note Everil Orr also contributed $1.5m to DMF rev
Slide 21: Underlying profit reconciliation
⚫ ⚫ ⚫ ⚫ 1. Rental expense of $19.2m in FY2020 relates to the right of use asset at Everil Orr village. There is a corresponding credit in IP which is also removed as part of this adjustment. 2. “Other” is an aggregation of line items that are individually less than $2.0m and includes Gain on sale /
Slide 22: Care segment
1. Based on all occupied beds across all care sites, including facilities that are ramping up / down as a result of past / future development. 2. Development margin & resale gains on care suites are included within the Village Segment for underlying profit and statutory reporting purposes as the ORA
Slide 23: Village segment
Village segment @ecer’ FY2020 Underlying EBITDA of $61.3m represents an 8% increase on FY2019, primarily as a result of strong growth in villa and apartment DMF revenue. Village Underlying EBITDA Villa and apartment DMF Revenue NZDm NZDm FY2020 FY2019 Var FY2018 cAGR 21.4 Villa and apartment DMF 214
Slide 24: Village segment - key indicators
Village segment - key indicators ED ocean Resale prices for all ORA products were above FY2019. Closing villa and apartment stock above historical levels as a result of the timing impact of sales delays caused by the COVID-19 lockdown period. However, sales applications are also 39% higher at 30 Jun
Slide 25: Developments - key indicators
OCEANIA HEALTHCARE Developments - key indicators Development margin of 33.1% in FY2020, with prices achieved at The Sands and Meadowbank in line with expectations and commensurate with their premium locations. New Sales Volumes and Margins Gross New Units Delivered ' 200 | 36.0% 40.0% Units FY2017 F
Slide 26: Cash flow
Cash flow Qe OCEANIA HEALTHCARE. Operating cash flow of $99.4m for FY2020 was ahead of the $89.3m in FY2019 due to higher cash proceeds from sales at new developments. Statement of cash flows e First time sales receipts at development sites of $121.4m (c.f. $75.5m in FY2019) drove an increase in ope
Slide 27: Balance sheet
● ● 1. Includes lease liabilities of $13.0m as at FY2020 ($5.5m as at FY2019).
Slide 28: Capital structure
Capital structure Gearing of 35.1% as at 31 May 2020. Sufficient bank facilities in place to execute our development pipeline. New Facility C secured to provide additional liquidity, while retail bond remains a priority in order to provide diversity of funding and tenor. Qe OCEANIA HEALTHCARE. Net D
Slide 29: Appendices
Overview of Oceania Portfolio summary Development pipeline Reconciliation of portfolio movements Summary of unit sales Embedded value Capital expenditure Reconciliation of resales cash flow Definition of Underlying NPAT Glossary Important notice and disclaimer
Slide 30: Overview of Oceania
1. Comprising 44 operating villages and 2 undeveloped sites. Facility numbers as at 31 May 2020. 2. Includes 325 care studios which may be initially sold with a PAC, and may subsequently be sold under an ORA. 3. Current and planned developments as at 31 May 2020.
Slide 31: Portfolio summary (31 May 2020)
02 Portfolio summary (31 May 2020) OSEANIA HEALTHCARE Care Care Village Care Care Village Facility Region Beds Suites Units Total Facility Region Beds Suites Units Total NORTH ISLAND SOUTH ISLAND Totara Park Rodney - - 30 30 Marina Cove Picton - - 22 22 The Sands North Shore - 44 64 108 Green Gables
Slide 32: Development pipeline
03 Development pipeline Development pipeline status as at 23 July 2020 OCEANIA r} HEALTHCARE Care Gross Sites Stage Status ILUs Suites Units Net Units Notes Meadowbank Stage 6 Consented - 36 36 36 ‘Awatere (formerly Trevellyn) Stage 2 Under Construction 63 = 63 63 Commenced construction November 201
Slide 33: Reconciliation of portfolio movements
1. Changes in capacity and pipeline now includes forecast care suite conversions in the pipeline. Totals for FY2020 reconcile to both the total existing and future post development portfolios on slide 30.
Slide 34: Summary of unit sales
05 Summary of unit sales @ecer’ New Sales FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 Villa 4l 7 7 26 23 24 Apartment 23 20 20 47 53 51 Care Suite 29 23 15 27 57 n4 Total 93 60 52 100 133 189 Average development margin 8.9% 19.2% 22.9% 33.5% 36.0% 33.1% Resales FY2015 FY2016 FY2017 FY2018 FY2019 FY202
Slide 35: Embedded value
⚫ ⚫ ̶ ̶ ⚫ 1. Calculated as the current/estimated sale or resale price of all units/care suites as determined by CBRE – note FY2020 as at 30 April 2020. The FY2018 figure has been adjusted for the divestment of Dunblane Village. 2. Value of unsold stock represents the sales prices of units/care suite
Slide 36: Capital expenditure
07 Capital expenditure te Toco Development capital expenditure was lower than FY2019 as a result of the COVID-19 enforced lockdowns of development sites. Breakdown of Capital Expenditure NZDm FY2020 FY2019 FY2018 Acquisitions - 21.4 38.6 Development capital expenditure 117.3 135.2 79.1 Remediation e
Slide 37: Reconciliation of resales cash flow
1. Net Buybacks is the difference between the gross ORA payments made in relation to units bought back (and not resold) during the year and the gross ORA receipts from units resold during the year that were bought back in prior financial years.
Slide 38: Definition of Underlying NPAT
09 Definition of Underlying NPAT Underlying Profit (or Underlying NPAT) Underlying Profit is a non-GAAP measure used by the Group to monitor financial performance and is a consideration in determining dividend distributions. Underlying profit measures require a methodology and a number of estimates
Slide 39: Glossary
10 Glossary Care Suite A room or studio certified for the provision of care by the Ministry of Health which has been licensed under an ORA. Continuing Operations Earnings from continuing operations excludes the earnings from sites divested in FY2019 in all reporting periods. DMF Deferred Management
Slide 40: Important notice and disclaimer
11 Important notice and disclaimer This presentation has been prepared solely by Oceania Healthcare Limited ("Oceania"). You must read this disclaimer before making any use of this presentation and the accompanying material or any information contained in it (’Document"). The presentation includes n