Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — H1 FY2003 Earnings Presentation
22 slides from Ramsay Health Care's earnings presentation, Mar 3, 2003
Slide 1: Interim Results Briefing – 3 March 2003
Interim Results Briefing – 3 March 2003
Slide 2: Overview
Overview Profit increase for the period follows two full years of near doubling in profit growth All divisions contributed to strong EBIT growth Strong occupancy levels maintained: ¾ admissions up 9%, compared with previous year (up 5% excluding Cairns and Lake Macquarie) Interim dividend 6.
Slide 3: Financial Highlights
Financial Highlights NPAT up 25% to $18.5m Group Revenue up 21% to $320.2m Group EBIT up 14% to $32.9m EBIT margin of 10.5% (excluding new hospital acquisitions) EPS up 23% to 14.4 cents per share
Slide 4: Financial Performance
Financial Performance Half-year Ended 31 December 2001 2002 % Inc. $m $m Operating Revenue 264.8 320.2 21% EBITDA 40.2 45.1 12% EBIT 28.9 32.9 14% Profit before tax 21.2 26.0 23% NPAT 14.8 18.5 25% EPS (cents/share) 11.7¢ 14.4¢ 23% Int. Dividend (cents/share) 4.5¢ 6.5¢ 44% (Unfranked) (Franked)
Slide 5: EBIT Growth
EBIT Growth $m 32.9 35.0 28.9 29.4 30.0 25.0 21.1 18.4 20.0 15.0 10.0 Dec'00 Jun'01 Dec'01 Jun'02 Dec'02 Half-year EBIT up 14% for the half-year EBIT margin 10.5% (excluding new hospital acquisitions)
Slide 6: Net Profit Growth
Net Profit Growth $m 18.5 20.0 16.3 14.8 15.0 9.5 10.0 6.5 5.0 0.0 Dec'00 Jun'01 Dec'01 Jun'02 Dec'02 Half year NPAT up 25% for half-year
Slide 7: Earnings per share
Earnings per share 14.4 15.0 12.8 11.7 Cents per share 10.0 8.2 6.0 5.0 0.0 Dec'00 Jun'01 Dec'01 Jun'02 Dec'02 Half-year Basic EPS up 23% for the half-year Double digit growth anticipated for the full-year
Slide 8: Cash Flow
Cash Flow $m 90 Annual Half-Year 2003 FY 75 60 EBITDA 45 Cash Flow 30 15 0 2000 FY 2001 FY 2002 FY Dec'02 Except for operating movements in working capital, the half-year EBITDA has translated into strong gross operating cash flow. The effective cash flow management is consistent with prior financ
Slide 9: Operations Overview
Operations Overview Profit rise achieved despite challenging environment Underlying growth in EBIT and NPAT strong, demonstrating organic growth opportunities Management initiatives result in higher occupancy levels, above industry average Extra capacity from expansion program being matched
Slide 10: Operations Overview (cont’d)
Operations Overview (cont’d) 10.5% EBIT margin, excluding recent acquisitions ¾ Above industry average ¾ Slight reduction in margin reflects higher medical indemnity cost, hospital disruptions from capacity expansion programme ¾ Margins also reflecting ongoing change in revenue mix, e.g. prosthese
Slide 11: Occupancy – Patient Days
Occupancy – Patient Days 400 350 Inpatient 300 Total (Inpatient & Day Patients) 250 200 Jun'00 Dec'00 Jun'01 Dec'01 Jun'02 Dec'02 Half-year Ended Strong occupancy levels maintained with admissions up 9% (5% excluding new hospital acquisitions, Cairns and Lake Macquarie)
Slide 12: Industry Challenges
Industry Challenges Issue Response Nursing shortage & ¾ Preferred employer status, increased cost of wages: seek to recover higher wage costs from health funds. Increased cost of medical ¾ Emphasis upon risk indemnity insurance: management enhancement programme. Health fund negotiations: ¾ Qua
Slide 13: Long-term strategy on track
Long-term strategy on track Developing a quality portfolio of strategically positioned hospitals ¾ Managing our business well • Experienced management team maximising opportunities, managing challenges, micro-management (appropriate decentralised management) • Sustainable cost management ¾ Investi
Slide 14: Long-term strategy on track (continued)
Long-term strategy on track Developing a quality portfolio of strategically positioned hospitals (continued) ¾ Acquisitions based on strict investment criteria • Strategic fit • Moderate to low operating risk • EPS positive and 15% ROI in short-medium term • Delivering competitive advantage, consu
Slide 15: Aged Care
Aged Care Sector benefits ¾ Ageing population = growing demand, particularly for high quality services ¾ Secure revenue stream ¾ Fragmented industry provides opportunity for rationalisation Strategy ¾ Target high end, profitable segment ¾ Focus on quality service ¾ Develop broad portfolio of ser
Slide 16: Outlook
Outlook Comfortable with market consensus for NPAT of approximately $37m for FY 2003 Scope exists for continuing organic growth of existing business Acquisitions provide opportunity to enhance growth and profit outlook Targeting double-digit growth foreseeable future
Slide 17: Appendix
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Slide 18: Revenue Growth Time Line
Revenue Growth Time Line Perth Alpha Hosp Veteran Hosp RHC listed Group Privatisation on the ASX Acquired $m Feb’94 Sept’97 May’01 600 550 Brisbane Co-located 500 Veteran Hosp North Shore Privatisation Private Hosp 450 Jan’95 Opened Jul’98 400 350 300 250 200 150 100 50 0 1993 1994 1995 1996 1997 19
Slide 19: Financial Indicators
Financial Indicators Six months ended 30 Jun’01 31 Dec’01 30 Jun’02 31 Dec’02 (1) (2) Net Gearing % 83 70 73 78 ROIC (3) 11.7 14.4 14.9 14.3 (EBIT/Funds Employed) % ROE (3) 8.0 12.1 13.9 14.3 (NPAT/Shareholder Funds) % (1) Alpha (acquired May’01) excluded as only one month of trading for the period
Slide 20: Facility Portfolio
Facility Portfolio O p e r a tin g D iv is io n s N um ber L ic e n c e d of B eds F a c ilitie s V e te ra n 2 830 C o - lo c a te d 3 376 R e g io n a l M e d ic a l – S u r g ic a l *10 859 P s y c h ia tr ic 8 552 R e h a b ilita tio n 2 119 T o ta ls 25 2 ,7 3 6 * Including the Coffs Harbour Da
Slide 21: Revenue Analysis
Revenue Analysis Revenue by Revenue by Operating Division Payor Source 3% 10% 6% 36% 7% 22% 29% 35% 52% Veteran Medical-Surgical Health Insurance Dept. Veteran Affairs Co-located Psychricatric Government Other Rehabilitation
Slide 22: RAMSAY
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