Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — Macquarie Securities Group Australia Conference 2009
22 slides from Ramsay Health Care's conference presentation, May 6, 2009
Slide 1: Macquarie Securities Group Australia Conference
For personal use only Macquarie Securities Group Australia Conference 6 May 2009 Christopher Rex, Managing Director
Slide 2: Agenda
AGENDA For personal use only • About Ramsay Health Care • Successful growth story • Formula for success - Management & culture - Financially disciplined - Strong growth strategy • Strong company in a resilient industry • Australian & UK market dynamics • Half-year review • Ramsay UK update • Outlook
Slide 3: About Ramsay Health Care
ABOUT RAMSAY HEALTH CARE For personal use only • Established in 1964 • Listed on the Australian Stock Exchange in September 1997 • Since become Australia’s largest private hospital operator, approx. 30% market share • In top 100 Australian-listed companies by market capitalisation • Expanded offshor
Slide 4: Successful Growth Story
SUCCESSFUL GROWTH STORY For personal use only AT LISTING TODAY (Sept 1997) More than 100 hospitals and facilities 11 hospitals • 65 in Australia • 3 in Indonesia • 38 in the UK More than 8,400 beds 1,351 beds • 6,724 in Australia • 615 in Indonesia • 1,098 in the UK 2,000 staff Approx. 25,000 staff
Slide 5: Revenue Growth Milestones
REVENUE GROWTH MILESTONES For personal use only Capio UK Acq. Nov’07 Affinity Acq. Apr’05 Benchmark Acq. Jul’04 Greenslopes Major Exp. Opened May’03 Revenue Hollywood Major Exp. Opened Jul’02 Alpha Acq. May’01 Greenslopes Acq. Feb’95 North Shore Private Hosp. Opened Jul’98 Hollywood RHC Listed Sep’9
Slide 6: Formula for Success – Management & Culture
FORMULA FOR SUCCESS – MANAGEMENT & CULTURE For personal use only • The Ramsay vision – To deliver high quality care while ensuring long term profitability • Long term, stable management team – Benchmarked operational leaders – Good relationship with key industry players • Special culture (“The Ramsa
Slide 7: Formula for Success – Financially Disciplined
FORMULA FOR SUCCESS – FINANCIALLY DISCIPLINED For personal use only • Growth only pursued if financial and strategic criteria and investment hurdles are satisfied – Targeting 15% ROI over the short-to-medium term • Willing to consider investments outside hospitals if financial criteria are met and i
Slide 8: Formula for Success – Strong Growth Strategy
FORMULA FOR SUCCESS – STRONG GROWTH STRATEGY For personal use only • Ramsay has three major drivers of growth: – Organic growth: • Underpinned by patient demographics • Quality portfolio of hospitals • Continual business management improvement – Brownfields: • Investing A$580 million (net) to expand
Slide 9: Strong Returns – Growth Strategy Delivering
For personal use only 1000.00 1200.00 1400.00 1600.00 1800.00 200.00 400.00 600.00 800.00 0.00 Jan-00 Apr-00 Jul-00 Oct-00 Jan-01 Source: Macquarie Securities Apr-01 Jul-01 Oct-01 Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 STRONG RETURNS Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 ASX200 Accumulation I
Slide 10: Strong Company in a Resilient Industry
STRONG COMPANY IN A RESILIENT INDUSTRY For personal use only • Ramsay is well positioned in the current climate • Industry fundamentals underpin growth • First-half result reflects strength and resilience of the underlying business and the industry • Ramsay’s continued investment in its existing bus
Slide 11: Australian Market Dynamics
AUSTRALIAN MARKET DYNAMICS For personal use only • Bipartisan support for a balanced public/private health care system • Range of Government support structures to promote participation in health insurance • Latest Australia Private Health Insurance data defies slowing economy and changes to Medicare
Slide 12: UK Market Dynamics
UK MARKET DYNAMICS For personal use only • Exciting market dynamics – Major reform in publicly funded health care – Patient Choice in the process of becoming a legal right – Government determined to sustaining its investment in the NHS, despite the economic downturn – Relatively stable PMI market –
Slide 13: Half-Year Review
HALF-YEAR REVIEW For personal use only Strong rise in Group net profit six months ended 31 December 2008 • Core Net Profit After Tax up 11.6% to $68.7 million • Core EPS up 11.0% to 33.8 cents • Group revenues up 35.5% to $1.6 billion - Australia and Indonesia revenue up 12.0% to $1.3 billion • Grou
Slide 14: Group Financial Performance
GROUP FINANCIAL PERFORMANCE For personal use only HALF YEAR ENDED 31 DECEMBER 2008 2007 % Increase $m $m Continuing Operations Australia & UK (1) Group (1) Group (1) Indonesia Operating Revenue 1,264.1 343.6 1,607.7 1,186.7 35.5% EBITDAR (2) 183.8 74.1 258.0 177.1 45.6% EBITDA 171.4 30.4 201.8 157.0
Slide 15: Strong Cash Flow and Capital Management
STRONG CASH FLOW AND CAPITAL MANAGEMENT For personal use only • Ramsay is very focused on cash flow and working capital management • High cash conversion of EBITDA to gross operating cash flow of over 100% • Business generates strong and consistent cash flow which underwrites debt servicing • Ramsay
Slide 16: Strong Cash Flow and Capital Management (cont)
STRONG CASH FLOW AND CAPITAL MANAGEMENT (cont) For personal use only • Ramsay adopts a conservative approach to management of interest rate exposure • Leverage ratio (net debt/EBITDA) currently 3.5 x and well within bank covenants • Leverage ratio is expected to trend down as a result of increased p
Slide 17: Operational Highlights – Australia & Indonesia
OPERATIONAL HIGHLIGHTS – AUSTRALIA & INDONESIA For personal use only • Australia & Indonesia revenue growth up 12.1% • Australia & Indonesia EBIT growth up 10.9% • Australia & Indonesia EBITDA hospital margins (excluding prostheses) rose to 18.2% from 18.0% • Total admissions for Ramsay’s Australian
Slide 18: Operational Highlights – UK
OPERATIONAL HIGHLIGHTS – UK For personal use only • NHS work is continuing to grow in private hospitals, now comprises more than 40% of Ramsay UK admissions, up from 20% a year ago • Whilst NHS volumes grow, Private Medical Insurance (PMI) remains relatively stable. • Operating margins before rent r
Slide 19: Ramsay UK Update
RAMSAY UK UPDATE For personal use only • Focused on developing and growing the business • Ramsay has approved £28 million to be spent over 2009 and 2010 financial years for improvements and capital expansion to satisfy growing NHS demand • Commencement of re-negotiation of Wave 1 ISTC contracts whic
Slide 20: Ramsay UK - Growth of CAB
RAMSAY UK - GROWTH OF CAB For personal use only Ramsay UK Choose and Book 2008/09 Volumes 12000 10000 8000 6000 4000 2000 0 Appts Booked In Period Source: Connecting for Health 20
Slide 21: Outlook
OUTLOOK For personal use only • Ramsay’s underlying business remains solid and tracking in line with expectations • Ramsay is well positioned in current climate • Strong industry fundamentals to underpin future growth • Ramsay UK on track to be EPS accretive in FY09, one year ahead of schedule (as p
Slide 22: Questions
For personal use only QUESTIONS
Ramsay Health Care — Macquarie Securities Group Australia Conference 2009 on 6ix