Slide 1: Netcare Limited Summarised Audited Group Results
Netcare Limited Summarised Audited Group Results for the year ended 30 September 2019 1
Slide 2: Overview
Resilient operational and 01 financial performance in a challenging environment Overview 02 Benefits from optimisation and efficiency initiatives We are firmly focused on leading positive change in health and care delivery Minimal impact on gearing from special dividends and share buy-backs 03 of R1
Slide 3: Financial Overview
▲4.2% Revenue R21 589m 01 ▲4.3% EBITDA¹ R4 388m ▲3.0%2 Adjusted HEPS from 02 continuing operations 171.2 cents Financial 03 Cash conversion3 111.4% (2018: 102.3%) Overview Net debt/EBITDA 1.2 times ROIC 04 (2018: 1.1 times) 20.1% ▲ 6.7% Final dividend 64.0 cents 05 per share 1. Normalised to exclude
Slide 4: Operational Overview
Operational Overview 4
Slide 5: Netcare's unique health and care delivery ecosystem
936 56 National Renal Care Acute hospitals dialysis stations (10 471 beds)¹ 82 Netcare’s Primary healthcare facilities² 12 unique PERSON CENTRED HEALTH AND CARE, Akeso 15 Day clinics DIGITALLY ENABLED facilities AND DATA DRIVEN (891 beds) health and 109 000 Occupational care delivery healthcare live
Slide 6: Key healthcare sector trends and activity drivers
Key healthcare sector trends and activity drivers Hospital and emergency services Sector trends Funder initiatives Specialists Patient Days Occupancy Growth in restricted Despite under- ▲ 112 (net) ▲ 3.7% Total Acute Hospitals: hospital networks: representation in new Specialists granted Full week:
Slide 7: Hospital and emergency services financial performance
30 Sep 30 Sep Akeso consolidated Rm 2018 2019 % from H2 2018 Hospital and Revenue 20 000 20 810 4.1 Acute hospitals: emergency EBITDA¹ 4 163 4 263 2.4 o o ▲ 2.7% revenue growth ▲ 4.3% revenue services Operating profit¹ 3 490 3 569 2.3 per patient day2 Financial Excluding net non-trading income Perfo
Slide 8: Primary Care Financial Performance
30 Sep 30 Sep Rm 2018 2019 % Expansion of Revenue 717 795 10.9 occupational health offering Primary Care EBITDA 109 118 8.3 Financial Operating profit 59 64 8.5 Performance Margins impacted by higher contribution from EBITDA margin (%) 15.2 14.8 occupational health, restructuring costs and start-up
Slide 9: Financial Review
Financial Review | Va ey
Slide 10: Group Financial Overview
01 Excellent cost control Group 02 Healthy financial position and gearing Financial Overview Strong cash generation and 03 cash conversion 04 Disciplined capital management 10
Slide 11: Exceptional items and discontinued operations
30 Sep 30 Sep Rm 2018 2019 Exceptional items Realisation of foreign currency translation reserve 128 Exceptional Impairment of economic interest in BMI debt Profit on loss of control (1 544) 4 205 items and Tax effect 222 discontinued 2 883 128 operations Discontinued operations Trading losses (550)
Slide 12: Summarised Group statement of profit or loss
30 Sep 30 Sep Rm 2018 2019 % Revenue 20 717 21 589 4.2 After: o HMI costs R34m (2018: R36m) EBITDA¹ 4 209 4 388 4.3 o Non-trading net income R7m Operating profit¹ 3 486 3 640 4.4 (2018: costs R63m) Summarised Interest received – BMI debt 104 Group Other net financial expenses (431) (486) Higher aver
Slide 13: Headline earnings per share (HEPS) from continuing operations
30 Sep 30 Sep Cents per share 2018 2019 % HEPS 68.8 165.9 141.1 Adjusted HEPS Including BMI debt interest 171.6 171.2 (0.2) Headline Less: contribution from BMI debt interest (5.4) earnings per Excluding BMI debt interest Ordinary dividend: 166.2 104.0 171.2 111.0 3.0 6.7 share (HEPS) Interim 44.0 4
Slide 14: Summarised Group statement of financial position
30 Sep 30 Sep Rm 2018 2019 Capex of R1 429m Assets (2018: 1 514m) o Expansion R512m PPE, goodwill and intangible assets 13 847 14 322 (2018: R604m) o Replacement Summarised Other non-current assets Current assets 1 453 5 167 1 569 5 298 R917m (2018: R910m) Group Assets classified as held for sale 29
Slide 15: Debt
30 Sep 30 Sep Rm 2018 2019 Gross debt 6 176 6 846 Cash (1 371) (1 732) Net debt 4 805 5 114 Increase of R309m Net debt to EBITDA¹ (times) 1.1 1.2 GCR credit rating: Debt Cost of debt (%) Net interest paid: 8.8 8.6 › › Long term AA- Short term A1+ Other net interest paid 430 484 Interest received - B
Slide 16: Debt facilities and maturity profile
Facility utilisation (Rm) 5 039 1 732 6 846 Debt facilities and maturity Utilised Cash Available profile Debt maturity profile (Rm) 1 780 1 358 1 340 1 774 589 2020 2021 2022 2023 2024 16
Slide 17: Analysis of cash flows
Rbn 5,0 0.4 (0.4) 4.5 (1.0) 4,0 (0.9) Analysis of 3,0 2.6 (0.3) (1.6) cash flows 2,0 R5.2bn of cash outlay 1,0 (0.5) (of which 50% was paid (0.5) (0.3) to shareholders) resulted 0,0 in an increase of only R300m of net debt -1,0 Ordinary dividends Net finance costs Share buy-back Increase in net debt
Slide 18: We have achieved our capital management metrics
Medium term targets: 3-5 years1 2018 2019 Return on invested capital (ROIC) >20% 19.9% 20.1% ✓ We have Group EBITDA margin 20.5% 20.3% 20.3% achieved our Policy capital Net debt to EBITDA Covenant <2.75x limit1 <2.0x 2018 1.1x 2019 1.2x ✓ management EBITDA/net interest >4x >5x 12.9x 9.1x ✓ metrics
Slide 19: Guidance
Guidance 19
Slide 20: Guidance for FY 2020
Guidance for FY 2020 Activity EBITDA Margin1 Focus Areas Capital Expenditure Total patient days: Maintain core acute hospital Continue digitisation rollout ± R1.4 billion margin and development of Artificial ▲ 0.8% to 1.2% Intelligence (AI) and data Additional central costs analytics capabilities Se
Slide 21: Impact of IFRS 16: Leases
Impact of IFRS 16: Leases Overview Implications o Effective 1 October 2019 Statement of financial position Range Rm From To o Leased assets are brought o Lease capitalised as right-of-use onto Group statement of asset (at rates between 8.3% to Statement of financial position financial position 12.9%
Slide 22: Our evolving strategy
tS Our evolving é strategy
Slide 23: We are driving innovation in healthcare
We are driving Using technology to Encouraging patients innovation in enable the scaling of healthcare solutions to participate more in their health and care healthcare through … Using data to drive greater efficiency and more personalised solutions 23
Slide 24: Person centred health and care
Person centred health and care Netcare has a unique ecosystem of Driving coordination of care: assets and investments that position Shifting from episodic, fragmented us well for growth and disruptive care to focus on lifelong care innovation Driving excellent outcomes and Netcare awarded Ask Africa
Slide 25: Cutting-edge technology
Cutting-edge technology Rolling out a fully mobile, digital electronic health record across our ecosystem, in partnership with: 25
Slide 26: How are we progressing?
Excellent progress on CareOn pilot at Netcare Milpark Hospital with all key 01 milestones achieved and within budget. Plan to roll-out to additional hospitals from mid-year 2020 How are we Netcare 911 is fully digitised and the only progressing? 02 emergency service provider in Africa and one of onl
Slide 27: Using real-time data analytics and machine learning to save lives
Using real-time data analytics and machine learning to save lives Time Matters: Reduction in Netcare 911 overall median response time 40 39 32 28 23 22 Minutes 17 16 13 15.5 2011 2012 2013 2014 2015 2016 2017 2018 2019 Response Time: the time from making a call to Netcare 911 until the arrival on sc
Slide 28: Using machine learning to stop the scourge of superbug infections
Using machine learning to stop the scourge of superbug infections Globally there is a growing Netcare remains a leader in risk of antibiotic resistant driving appropriate use of organisms or superbugs antibiotics Using machine learning and Developing a predictive model algorithms, we have developed
Slide 29: Investing in Healthtech startup ventures
Investing in Healthtech startup ventures This forms part Netcare, in Founders Factory Investing up to Standard Bank are of our strategy to partnership with is led by an R180m similarly driving use data and Standard Bank, experienced team over 35 new fintech technology to has invested in of experts w
Slide 30: Applying our innovative thinking to be a force for social good
Applying our innovative thinking to be a force for social good 30
Slide 31: Positively impacting the environment
What we set out to achieve 30% decrease in energy intensity over 10 years (to 2023) The results to date ✓ On track with a 20% decrease after 6 years Positively impacting the National and global recognition environment 2019 Association of Energy Engineers (USA) Sub-Saharan Corporate Company of the Ye
Slide 32: Transforming our business environment
B-BBEE Ownership Share Scheme Netcare is committed to building a transformed SA characterised by values of social and economic equality and inclusion for all o Allocation of 61 million Netcare shares available under existing B-BBEE scheme Transforming o Funded through notional interest-bearing debt
Slide 33: Transforming our society
Employment profile o 20 193 permanent employees – 82.0% women – 78.0% black South African employees – 3.6% persons with disabilities Skills development Procurement Transforming o R338m spend o R10.8bn measurable spend our society – 80.0% on black employees o 823 Youth Employment Service (YES) – 87.0
Slide 34: Netcare embraces principles of universal healthcare
Netcare embraces Draft National Health Insurance (NHI) Bill published August 2019 Given the inequality of access, Netcare strongly supports an principles of paves the way for the establishment of NHI fund to inclusive approach to improving accessibility and universal purchase services from accredite
Slide 35: Thank you
Thank you 35