Sonic Healthcare Limited · ASX:SHL

Sonic Healthcare — H1 FY2023 Earnings Presentation

23 slides from Sonic Healthcare's earnings presentation, Feb 16, 2023

  1. Slide 1: CEO Presentation – Half-Year Results to 31 December 2022

    The Manager – Listings Australian Securities Exchange Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2000 Via electronic lodgement Dear Sir / Madam CEO PRESENTATION – HALF-YEAR RESULTS TO 31 DECEMBER 2022 At 10.00am AEDT today, Dr Colin Goldschmidt, Chief Executive Officer, will host a presenta

  2. Slide 2: Financial and Operational Review

    Financial and Operational Review Half-year ended 31 December 2022 Dr Colin Goldschmidt CEO, Sonic Healthcare 16 February 2023

  3. Slide 3: Forward-looking Statements

    Forward-looking Statements This presentation may include forward-looking statements about our financial results, guidance and business prospects that may involve risks and uncertainties, many of which are outside the control of Sonic Healthcare. Readers are cautioned not to place undue reliance on f

  4. Slide 4: Headlines

    Headlines A$M Change vs Change vs (Statutory) H1 FY 2023 H1 FY 2022 H1 FY 2020 (pre-pandemic) Base business* revenue 3,703 9% 11% COVID-19 revenue 379 (72)% n/a Total Revenue 4,082 (14)% 22% EBITDA 920 (40)% 33% Net Profit 382 (54)% 50% Cash generated from operations 785 (25)% 47% Earnings per share

  5. Slide 5: Interim Dividend

    Interim Dividend A$ H1 FY 2023 H1 FY 2022 Growth Interim Dividend $0.42 $0.40 5%  Progressive dividend strategy maintained  Franked to 100%  Record Date 8 March 2023  Payment Date 22 March 2023 Sonic Healthcare Results H1 FY 2023 4

  6. Slide 6: Revenue

    Revenue 5.0 4.5 1.3 4.0 1.2  H1 FY 2023 base business revenue organic growth 0.4  Up 6% on H1 FY 2022 3.5  Up 8% on H1 FY 2020 (pre-pandemic) 3.0  COVID revenue down 72% on H1 FY 2022 A$ BILLIONS  Base business growth to continue, strong underlying drivers 2.5 enhanced by post-pandemic catch-up

  7. Slide 7: Cost Management

    Cost Management  Major focus on costs, base business margins remaining strong and in line with pre-pandemic levels  Base business labour cost as a % of base business revenue in line with pre-pandemic levels  Labour cost growth (H1 FY 2023 vs H1 FY 2022) of 7.5% includes acquisition-related labour

  8. Slide 8: Growth Strategy

    Growth Strategy  Organic revenue growth  Ongoing focus on organic revenue growth, assisted by strong underlying industry drivers and enhanced by post-pandemic catch-up testing  Sonic’s Medical Leadership culture drives market share growth, especially in the specialist and hospital referrer sub-ma

  9. Slide 9: Capital Management

    Capital Management Debt Cover History 3.5 31 December 30 June 2022 2022 3.0 Net interest-bearing debt A$M 902 812 2.5 2.0 RATIO (X) Equity A$M 7,558 7,428 1.5 Debt cover X 0.5 0.3 1.0 Pre-pandemic long-term average Gearing ratio % 10.5 9.7 0.5 Interest cover X 36.9 47.3 0.0  Increase (A$90 million)

  10. Slide 10: H1 FY 2023 Revenue Split

    H1 FY 2023 Revenue Split SCS/Other A$190M 5% NZ Radiology A$15M A$388M 10% USA Belgium A$74M A$1,079M 2% 26% UK A$284M 7% Revenue in A$ millions Switzerland Total Revenue A$4,082 million (including A$4 A$287M million interest) 7% SCS / Other = Sonic Clinical Services (IPN Medical Centres, Sonic Heal

  11. Slide 11: USA

    USA  H1 FY 2023 revenue (constant currency)  Base business organic growth 6%  COVID revenue down 78%  Operations  PAMA Medicare fee cuts (Sonic impact ~US$15 million p.a.) deferred until calendar 2024, USA A$1,079M draft legislation (SALSA) to delay and reduce cuts still pending 26%  Continued

  12. Slide 12: Australian Pathology

    Australian Pathology  H1 FY 2023 revenue  Base business organic growth 8%  COVID revenue down 76%  Operations  Current Medicare fee for COVID PCR testing extended until at least 31 December 2023  National Aged Care COVID PCR testing contract extended until at least 30 April 2023  Cervical can

  13. Slide 13: Germany

    Germany  H1 FY 2023 revenue (constant currency)  Base business organic growth 5%  COVID revenue down 54%  Operations  New laboratory building projects to facilitate growth and consolidation of testing to provide efficiencies in Hamburg, Munich and Limburg (Limburg: Biovis laboratory focused on

  14. Slide 14: Switzerland

    Switzerland  H1 FY 2023 revenue (constant currency)  Fee cut from 1 August 2022, impact on Sonic’s Swiss revenue ~7% p.a.  H1 base business organic revenue growth flat, reflecting strong volume growth offsetting fee cut  COVID revenue down 71%  Operations  High-quality services and trusted bra

  15. Slide 15: UK

    UK  H1 FY 2023 revenue (constant currency)  Base business organic growth 5%  Strong private and NHS base business growth, including from developing private GP market  COVID revenue down 77%  Operations UK A$284M  Sonic awarded preferred bidder status for large 15-year UK NHS laboratory contrac

  16. Slide 16: Belgium

    Belgium  H1 FY 2023 revenue (constant currency)  Base business organic growth 11%  COVID revenue down 88%  Operations Belgium A$74M  Indexation of 6% to national fee schedule effective 1 January 2023 2%  Harmonisation of instrument platforms across laboratory network to be completed in second

  17. Slide 17: Radiology

    Radiology  H1 FY 2023 revenue and earnings  Revenue growth 10%, including contribution from Canberra Imaging Group acquisition  Organic revenue growth 8%  EBITDA growth 12% Radiology A$388M  Margin expansion of 50 bps 10%  Operations  Continuing growth in higher-value modalities (CT, MRI and

  18. Slide 18: Sonic Clinical Services (SCS)

    Sonic Clinical Services (SCS)  H1 FY 2023 revenue and earnings  Revenue down 13%, mainly due to cessation of COVID-related services SCS/Other  Decline in earnings reflecting lower revenue A$190M 5%  Operations  Primary care market conditions challenging in post-pandemic environment  Level of G

  19. Slide 19: Artificial Intelligence

    Artificial Intelligence  Franklin.ai  Sonic’s JV with Harrison.ai to develop best-in-class AI diagnostic tools for pathology  Further expansion of expert team focusing on engineering, clinical research, and product development  Histopathology slide digitisation and AI annotation operating at hig

  20. Slide 20: Strategic Partnership with Microba

    Strategic Partnership with Microba  Investment in Microba Life Sciences Limited (ASX: MAP)  19.99% shareholding acquired for A$17.8 million, with option over additional 5% equity position  Strategic partnership to deliver Microba’s microbiome testing services in Sonic’s global markets  Microbiom

  21. Slide 21: Sustainability

    Sustainability Key goals and achievements, as detailed in Sonic’s Sustainability Report, November 2022 Sonic Healthcare Results H1 FY 2023 20

  22. Slide 22: Thank you

    Sy SONIC SY HEALTHCARE Thank you

  23. Slide 23: Appendix – Financial Summary

    Appendix – Financial Summary A$M H1 FY 2023 H1 FY 2022 H1 FY 2020 Growth Growth (Statutory) (pre-pandemic) H1 FY 2023 v H1 FY 2023 v H1 FY 2022 H1 FY 2020 Base business revenue 3,703 3,413 3,341 9% 11% COVID-19 revenue 379 1,344 - (72)% n/a Total revenue 4,082 4,757 3,341 (14)% 22% EBITDA 920 1,540

Sonic Healthcare — H1 FY2023 Earnings Presentation on 6ix