Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — FY2002 Earnings Presentation
24 slides from Ramsay Health Care's earnings presentation, Aug 27, 2002
Slide 1: Annual Results
ANNUAL RESULTS For the year ended 30 June 2002 Briefing Briefing – – 27 27 August August 2002 2002
Slide 2: Overview
Overview Record year result, NPAT increased 94% All divisions delivered strong growth Both Alpha and Ramsay hospitals performed strongly Ramsay has taken advantage of the positive environment to maximise profits, improve efficiencies Results endorse the Ramsay management model Final divi
Slide 3: Operational Highlights
Operational Highlights Quality and strategic position of hospital portfolio: Alpha integration, synergy benefits exceeding expectations Strong organic growth at existing Ramsay hospitals Strong growth in operating cash flow continues Acquisition of Lake Macquarie Private Hospital boosts NS
Slide 4: Financial Highlights
Financial Highlights NPAT up 94% to $31.1m Group Revenue up 42% Group EBITDA up 35% to $80.8m Net operating cash flow up 25% to $65m Group EBIT up 48% Existing Ramsay hospitals EBIT up 21% EBIT margin up to 10.6% from 10.2% EPS up 73% to 24.5 cents per share
Slide 5: Financial Performance
Financial Performance Year Ended 30 June 2001 2002 % $m $m Increase Operating Revenue 387.9 549.8 42% EBITDA 59.9 80.8 35% EBIT 39.6 58.4 48% Profit before tax and unusual items 22.4 43.6 94% NPAT before unusual items 16.5 31.1 89% Unusual Items (0.5) - - NPAT 16.0 31.1 94% EBIT Margin 10.2% 10.6% E
Slide 6: Cash Flow
Cash Flow EBITDA / Cash Flow $m 90 75 60 45 EBITDA Cash Flow 30 15 0 FY 2000 FY 2001 FY 2002 ¾ Full year EBITDA of $80.8m has translated into strong gross operating cash flow of $84m ¾ Net operating cash inflow was up 25% to $65m ¾ Apart from dividends, funds were applied to capacity expansion ($37m
Slide 7: NPAT Growth
NPAT Growth Annual Growth Half-yearly Growth $m $m 31.1 16.3 35 18 14.8 30 15 25 16.0 12 20 9 15 6.6 6 10 3 5 0 0 FY 2000 FY 2001 FY 2002 Dec'01 Jun'02 ¾ Strong NPAT Growth, year on year ¾ Second half exceeded expectations of matching first half
Slide 8: Occupancy – Patient Days
Occupancy – Patient Days 420 360 (Days,000) Inpatient 300 Total (Inpatient & Day Patients) 240 180 Jun'00 Dec'00 Jun'01 Dec'01 Jun'02 Half-year ended ¾ Robust occupancy growth for the year – patient days up 29% ¾ Occupancy levels for the second half maintained despite seasonality
Slide 9: Group EBIT
Group EBIT $m 58.4 60 50 39.6 40 30.8 Alpha Hospitals 30 Ramsay Hospitals 20 10 0 FY 2000 FY 2001 FY 2002 ¾ Group EBIT up 48% ¾ Existing Ramsay hospital EBIT up 21%
Slide 10: EBIT Margin
EBIT Margin % 11.0 10.6 10.2 10.5 10.0 9.4 9.5 9.0 8.5 8.0 FY 2000 FY 2001 FY 2002 ¾ Continued EBIT margin growth
Slide 11: Alpha EBIT Margin
Alpha EBIT Margin % 9.6 10.0 8.0 8.0 6.0 4.0 4.0 2.0 0.0 Mth of Jun'01 6 Mths ended 6 Mths ended (Acquired 31 Dec'01 Jun'02 May'01) ¾ Alpha EBIT margin continues to improve
Slide 12: Earnings per Share
Earnings per Share 24.5 25.0 20.0 Cents per Share 14.2 15.0 10.0 6.1 5.0 0.0 FY 2000 FY 2001 FY 2002 ¾ EPS up 73% in the year
Slide 13: Environment
Environment Environment remains positive for Ramsay Demand for quality private hospital beds to remain strong as impact of “lifetime cover” continues to flow through Ramsay preferred employer status assists in management of nursing shortage Medical indemnity insurance costs ¾ Significant cos
Slide 14: Hospital Portfolio
Hospital Portfolio Revenue by Division Hospitals Licensed Number 4% Divisions Beds 12% 37% Veteran 2 787 21% Co-located 3 376 26% Veteran Med/Surg Co-loc Psych Rehab Medical/ 8 705 Surgical Revenue by Payor Source Psychiatric 8 552 8% 5% Rehabilitation 2 119 52% 35% Total 23 2,539 Health Funds Veter
Slide 15: Growth Prospects
Growth Prospects Organic Growth Major Expansion Programme Additional Opportunities: Hospital Acquisitions Other
Slide 16: Growth Prospects (cont)
Growth Prospects (cont) Organic Growth to continue Continued positive market environment Quality of hospital assets Strong health fund and doctor relationships Occupancy continuing at high levels Management focus on sustainable cost containment Scope for further capacity utilisation ¾
Slide 17: Growth Prospects (cont) – Capacity expansion
Growth Prospects (cont) Capacity expansion ($70m) to deliver low risk higher returns Greenslopes: ¾ 90 bed development, 4 theatres, medical centre complex (completion by late 2nd half FY 2003) Hollywood: ¾ 70 bed development, 4 theatres, a second cath lab & new ICU (phased completion by Jun’03
Slide 18: Growth Prospects (cont) – Additional opportunities
Growth Prospects (cont) Additional opportunities Continue to actively explore hospital acquisitions (opportunities still available) Ramsay diligent in applying investment hurdles Focus remains on value and strategic fit Other opportunities close to core competencies ¾ Focus on value for sp
Slide 19: Outlook 2002/2003
Outlook 2002/2003 Continued organic growth Some capacity expansion comes on- stream Comfortable with market consensus expectations for 2002/2003 net profit of $35m - $37m
Slide 20: Outlook (cont) 2003/2004
Outlook (cont) 2003/2004 Market environment conducive to continued organic growth Major benefits of expansion program flow through Reasonable health fund reimbursement rates to continue based on quality of assets and strategic position Targeting sustainable double-digit growth
Slide 21: Annual Results
ANNUAL RESULTS For the year ended 30 June 2002 Briefing Briefing – – 27 27 August August 2002
Slide 22: Appendix
ae is RAMSAY HEALTH CARE Appendix
Slide 23: Financial Indicators
Financial Indicators Six months ended 31 Dec’00 *30 Jun’01 31 Dec’01 30 Jun’02 % % % % Net Gearing 88 83 70 73 ROIC 10.5 11.7 14.4 14.9 (EBIT/Funds Employed) ROE 6.3 8.0 12.1 13.9 (NPAT/Shareholder Funds) * Alpha (acquired 31 May’01) excluded as only one month of trading in the period
Slide 24: Annual Results
ANNUAL RESULTS For the year ended 30 June 2002 Briefing Briefing – – 27 27 August August 2002