Slide 1: 1H18 results
1H18 results Dr. Ian Kadish (MD & CEO) Anne Lockwood (CFO) 19 January 2018
Slide 2: Today's presenters
Today’s presenters Dr. Ian Kadish Anne Lockwood Managing Director and Chief Executive Officer Chief Financial Officer • Joined Integral Diagnostics in May 2017 • Joined Integral Diagnostics in 2016 and appointed as Chief Financial Officer in September 2017 • Has held roles including CSC Healthcare,
Slide 3: Summary
Summary • Strong financial performance driven by solid growth and realisation of significant cost efficiencies • Conservative gearing, with net debt / LTM EBITDA of 1.2x and flexibility for - Further investment in organic growth (e.g. PET scans, cardiac CT, centres of excellence) - Earnings accretiv
Slide 4: 1. 1H18 financial performance
1. 1H18 financial performance Confidential / Draft 3
Slide 5: Key highlights
Key highlights Underlying 1H18 results are a material improvement in operating margin and all financial performance metrics $ millions 1H18 1H17 Change ($) Change (%) (1) Operating revenue 92.8 87.7 5.1 5.8% Underlying EBITDA(2)(3) 19.0 16.9 2.1 12.4% (4) Underlying EBIT 14.0 11.9 2.1 17.6% Underlyi
Slide 6: Profit & loss
Profit & loss Strong financial performance driven by solid underlying growth and realisation of significant cost efficiencies $ millions 1H18 1H17 Change ($) Change (%) Operating revenue 92.8 87.7 5.1 5.8% Underlying EBITDA 19.0 16.9 2.1 12.4% Underlying EBIT 14.0 11.9 2.1 17.6% Net finance costs (1
Slide 7: Integral revenue growth improved materially in the second quarter
Integral revenue growth improved materially in the second quarter Improvement in Q2 driven by management Revenue growth initiatives implemented July to October: • Restructured call centres in QLD and WA 7.6% - Improving service levels - Facilitating patient triage - Increasing capacity utilisation •
Slide 8: Balance sheet
Balance sheet Conservative gearing, with net debt / LTM EBITDA of 1.2x and flexibility to fund accretive growth • Cash increased by $4m from 1H17 $ millions 31 Dec 17 30 Jun 17 31 Dec 16 • 1H18 net debt of $42.3m (1H17: $50.6m) Cash and cash equivalents 25.4 24.2 21.4 - 1.2x LTM EBITDA prior to one
Slide 9: Cashflow and cash conversion
Cashflow and cash conversion Cash flow growth reflects strong business performance and strong cash conversion $ millions 1H18 1H17 • Normalised free cash flow conversion of 93% (1H17 62%) – 105% net of replacement capex Underlying EBITDA 19.0 16.9 Non-cash items in EBITDA (0.2) (0.1) • Replacement c
Slide 10: Capital expenditure
Capital expenditure Management and Radiologists’ focus on “smart spending” has reduced capex outlay $ millions(1) FY18 FY17 FY16 Replacement 9.0 11.1 9.5 Growth 8.0 2.3 7.4 Depreciation 9.5 9.8 8.7 • FY18 expected capex of $17m - Replacement capex of $9m - Reduced from budgeted $11m due to leveragin
Slide 11: 2. Market update
2. Market update Confidential / Draft 10
Slide 12: Industry continuing cycle towards higher growth
Industry continuing cycle towards higher growth • Strong long-term drivers remain Industry growth recovering1 14% 12 month rolling growth rate by services 12 month rolling growth rate by benefits • Industry growth rates recovering Average 5.7% Average 7.5% 12% - Medicare disbursements growing very 1
Slide 13: Regulatory environment more supportive
Regulatory environment more supportive • Reintroduction of Medicare Benefits Schedule (MBS) indexation for selected Digital Imaging (DI) services from July 2020 • Government proposed reductions in bulk billing incentive for diagnostic imaging scrapped • Recent MBS outcomes from 1 Nov 2017 are not ma
Slide 14: 3. Strategy
3. Strategy Confidential / Draft 13
Slide 15: Management's FY18 strategy – good medicine is good business
Management’s FY18 strategy – good medicine is good business Strategy 1 Grow existing business and contain costs 2 Strategic acquisitions Increase Develop Drivers of Flex staff to Select bolt-on capacity Centres of Disciplined execution strategy demand acquisitions utilisation Excellence Geographic E
Slide 16: We are doing what we said we would do
We are doing what we said we would do 1H18 achievements Medical • State and National clinical leadership committees involved in strategic and operational decision making leadership • Initiated review of radiologist recruitment, retention, incentive and escrow structures Flex staff to • Schedule and
Slide 17: We will continue to do what we said we would do
We will continue to do what we said we would do 2H18 focus areas Medical • Conclude and implement review of radiologist recruitment, retentions, incentives and escrow arrangements leadership • Third annual national clinical conference to be held February 2018 Flex staff to • Implement a rostering, t
Slide 18: 4. Outlook
4. Outlook Confidential / Draft 17
Slide 19: Outlook
Outlook • As announced to the ASX on 12 January, the Company now expects achievement of full year normalised NPAT growth of around 20% (before takeover response costs and transaction costs) • Capex is expected at $17m (growth $8m, replacement $9m) • The material changes from previous guidance of hig
Slide 20: Update on Capitol Health Takeover Bid
Update on Capitol Health Takeover Bid TAKE NO ACTION • Capitol Health announced an unsolicited hostile takeover bid for Integral Diagnostics on 29 November 2017. On 22 December 2017, Capitol Health released a copy of its proposed bidder’s statement to the ASX. • Integral Diagnostics has since writte
Slide 21: Questions?
Questions? integral “yen “20
Slide 22: Appendix
Appendix Confidential / Draft 21
Slide 23: Reconciliation of underlying to statutory profit
Reconciliation of underlying to statutory profit $ millions 1H FY18 1H FY17 Change ($) Change (%) Underlying NPAT 9.2 7.5 1.7 22.7% One off transactions net of tax Transaction costs and takeover response costs (0.9) 0.0 (0.9) Fair Value gain on acquisition of SWMRI Joint venture 0.0 1.2 (1.2) Statut
Slide 24: 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 25: Contact us
Contact us Investors & Media Dr Ian Kadish, CEO P: +61 3 5339 0704 E: kadishi@integraldiagnostics.com.au