Slide 1: FY16 Results
FY16 Results John Livingston (CEO) Craig Bremner (CFO) 25 August 2016
Slide 2: Contents
CONTENTS SECTION SLIDE FY16 FINANCIAL HIGHLIGHTS 3 INDUSTRY THEMATICS 4 OPERATIONAL ACHIEVEMENTS 5 FY16 FINANCIAL PERFORMANCE 7 GROWTH STRATEGY & OUTLOOK 12 QUESTIONS 19 APPENDIX 20 1
Slide 3: FY16 Snapshot
FY16 SNAPSHOT 2
Slide 4: FY16 Financial Performance
FY16 FINANCIAL PERFORMANCE • Results in line with FY16 guidance provided at the time of our 1H16 results - 2H16 financial performance above 1H16 - FY16 Prospectus forecast not achieved due to slower industry growth following unforeseen changes to industry referral patterns • Statutory FY16 result -
Slide 5: FY16 Industry Thematics
FY16 INDUSTRY THEMATICS • Uncertainty created by Government announcements and related media coverage impacted referral patterns and patient examination volumes from Nov 2015, with behaviour stabilising in 2H16 but not fully recovering • Despite industry headwinds IDX was able to grow volume by 4.8%
Slide 6: FY16 Operational Achievements
FY16 OPERATIONAL ACHIEVEMENTS • Growth consistent with IDX’s key strengths in hospital and higher value modalities - Announced acquisition of Western District Radiology and the remaining 50% interest in South West MRI Pty Ltd - New site at Sunbury from April 2016 > Comprehensive site and only curren
Slide 7: Strategic Acquisition Consistent With Growth Strategy
STRATEGIC ACQUISITION CONSISTENT WITH GROWTH STRATEGY • Acquired Western District Radiology and the remaining 50% interest in South West MRI • Long term lease and existing strong working relationship with St John of God Hospital • Revenue of the two businesses is $4.3m and EBITDA of $1.2m p.a. • Com
Slide 8: FY16 Financial Performance
FY16 FINANCIAL PERFORMANCE 7
Slide 9: Top Line Growth Despite Industry Softness
TOP LINE GROWTH DESPITE INDUSTRY SOFTNESS Pro forma $ millions, June FY16 FY15 Change ($m) Change (%) Total revenue 167.8 160.0 7.8 4.9 Total expenses (132.8) (125.4) 7.4 5.9 EBITDA 34.9 34.6 0.3 0.9 Depreciation (8.1) (8.5) (0.4) (4.7) EBITA 26.8 26.1 0.7 2.7 Amortisation (0.6) (0.6) - - EBIT 26.2
Slide 10: Strong Balance Sheet
STRONG BALANCE SHEET Conservative gearing Actual $ millions 30 Jun 16 • Net debt 1.3x to pro forma FY16 Cash and cash equivalents Trade and other receivables 23.6 5.5 EBITDA Other current assets 2.8 Total current assets 31.9 • Intangible assets of $97.7m relate to Property, plant and equipment 46.6
Slide 11: Investing For Growth
INVESTING FOR GROWTH • Total CAPEX of $17.5m for FY16 - Maintenance capex as planned and additional growth capex given opportunities to drive sustainable long term growth • New equipment investment of $10.9m - New MRI units (one each at SJOG Hospital Geelong & Toowoomba plus relocated unit to Sunbur
Slide 12: High Free Cash Conversion
HIGH FREE CASH CONVERSION Pro forma $ millions, June year end FY16 FY15 EBITDA 34.9 34.6 Non-cash items in EBITDA 0.1 0.5 Changes in working capital (0.5) 1.2 Maintenance and replacement capex (9.4) (7.2) Free cash flow 25.1 29.0 Growth capital expenditure (7.8) (2.7) Net cash flow before financing
Slide 13: Growth Strategy & Outlook
integral GROWTH STRATEGY & OUTLOOK 12
Slide 14: Priorities & Value Proposition
PRIORITIES & VALUE PROPOSITION Operational Excellence Referrers and Patients Improved patient outcomes at a Deliver best in class needs- reduced cost-to- driven service for our referrers serve and patients: - most trusted - seamless interface - value add services Operational Referrers Excellence
Slide 15: Delivering On Growth Strategy
DELIVERING ON GROWTH STRATEGY • Investing in expanded capacity - New sites in the growing regional centres at Toowoomba (Queensland) and Ocean Grove (Victoria) - Improved range of services and increased patient examination volumes • Investing in our professional staff - 3 fellows and 1 registrar; ad
Slide 16: Industry Thematics
INDUSTRY THEMATICS And here they are! The Baby-boomers! But note, also, that the Baby-boomers had kids – so there is another cohort following through • As the baby boomers move through their 60’s and beyond, they increase demand on the health system. • The inflection point where hospital usage grows
Slide 17: Satisfying Growing Demand For Services
SATISFYING GROWING DEMAND FOR SERVICES Patient & Building referrer network outcomes Shareholder capacity value Cost to serve • Network capacity increase required to meet anticipated demand increase as baby boomers and their children work their way through the health system • Asset utilisation improv
Slide 18: Market Outlook
MARKET OUTLOOK • We expect referral and examination volumes to recover over time - Changes to bulk billing postponed and pending an independent evaluation - If implemented, Government commitment to reinvest up to $50m per annum in industry - Proposed reintroduction of indexation for diagnostic imagi
Slide 19: Company Outlook For FY17
COMPANY OUTLOOK FOR FY17 • We expect to generate a modest improvement in FY17 revenue and earnings when compared to FY16 - Examination volume growth to recover over time - Continued investment in technologies, sites, infrastructure and people to ensure IDX can: > support longer term demand for great
Slide 20: Questions
integral QUESTIONS 19
Slide 21: Appendix 1: Statutory / Pro Forma Reconciliation
APPENDIX 1: STATUTORY / PRO FORMA RECONCILIATION 20
Slide 22: FY16 Financial Result
FY16 FINANCIAL RESULT FY16 FY 16 Prospectus $ millions, June Statutory Pro forma Pro forma forecasts Total revenue 167.8 167.8 169.9 EBITDA 28.2 34.9 37.3 EBITA 20.1 26.8 29.1 EBIT 19.5 26.2 28.4 NPAT 11.4 16.6 17.9 NPATA 11.8 17.0 18.3 Net Debt 44.9 44.9 EPS (cents) 8.2 11.9 • As guided in 1H16 res
Slide 23: Pro Forma Results Reconciliation
PRO FORMA RESULTS RECONCILIATION $ millions, Dec Note FY16 FY15 Actual NPAT 11.4 4.8 Impact of Acquisitions [1] 0.0 1.3 Listed company expenses [2] (0.3) (1.1) Transaction costs expensed [3] 7.0 9.5 Change in financing structure and financing costs [4] 0.3 1.3 Income tax impact (1.8) 0.0 Pro forma N
Slide 24: Statutory Results Overview
STATUTORY RESULTS OVERVIEW Statutory $ millions, June FY16 FY15 Change ($m) Change (%) Total revenue 167.8 151.2 16.6 10.9 Total expenses (139.5) (127.6) 11.9 9.3 EBITDA 28.3 23.6 4.7 19.4 Depreciation (8.1) (8.0) 0.1 1.3 EBITA 20.2 15.7 4.5 28.7 Amortisation (0.6) (0.6) 0.0 0.0 EBIT 19.5 15.1 4.4 2
Slide 25: Appendix 2: IDX's Attractive Business Model
APPENDIX 2: IDX’S ATTRACTIVE BUSINESS MODEL 24
Slide 26: IDX Business Model
IDX BUSINESS MODEL The combination of IDX's referrers, sites, modality offering and clinical staff provides the group with a strong market position, access to scale advantages and a business model that is difficult to replicate Business model adaptable to potential regulatory change Comprehensive se
Slide 27: Key Strengths In Hospital Sites
KEY STRENGTHS IN HOSPITAL SITES 1. Long history in respective markets 2. Regional core markets, with #1 position in each market South Coast Radiology (QLD) Established 1967 3. Hospital sites in all regions which 12 locations (2 hospital sites) underpin higher complexity work Global Diagnostics (
Slide 28: Model Ensures Radiologist Alignment
MODEL ENSURES RADIOLOGIST ALIGNMENT Highly attractive place for Radiologists to work • Clinical autonomy and excellence • Diverse and interesting mix of work • Large referral network • Sub-specialisation opportunities • Technology and systems • Training and development • Pathway to equity ownership
Slide 29: Disclaimer
DISCLAIMER Some of the information contained in this presentation contains “forward-looking statements” which may not directly or exclusively relate to historical facts. These forward-looking statements reflect Integral Diagnostics Limited (IDX) current intentions, plans, expectations, assumptions a
Slide 30: FY16 Results
FY16 Results John Livingston (CEO) Craig Bremner (CFO) 25 August 2016