Life Healthcare Group Holdings Limited · JSE:LHC
Life Healthcare — H1 2021 Earnings Presentation
43 slides from Life Healthcare's earnings presentation, May 27, 2021
Slide 1: Unaudited Group Interim Results for the six months ended 31 March 2021
Unaudited Group Interim Results for the six months ended 31 March 2021 1
Slide 2: Overview
Overview Peter Wharton-Hood Group Chief Executive 2
Slide 3: Vision and Strategic Focus Areas
VISION AND STRATEGIC FOCUS AREAS Our vision is to be a global, people-centred, diversified healthcare organisation Global Diversified Clinical excellence, healthcare offering analytics and provider technology 1 Offering an 2 With a growing 3 Focus on our integrated share of employees, clinicians, he
Slide 4: Strategic Pillars
STRATEGIC PILLARS QUALITY EFFICIENCY SUSTAINABILITY GROWTH Deliver cost-effective Effectively Deliver Continue care through our engage with our market-leading to grow employees, clinicians, stakeholders quality care our businesses, efficient processes, to ensure our and while and the use of long-ter
Slide 5: Group Overview
GROUP OVERVIEW IMPROVED OPERATING PERFORMANCE DESPITE ONGOING COVID-19 PANDEMIC Revenue EPS from continuing from continuing and discontinued Disposal of Scanmed Strong financial position operations1 operations with net proceeds of Undrawn facilities R13.0 billion 55.9 cents R681 million of R6.4 bill
Slide 6: Key Objectives for 2021
GROUP OVERVIEW KEY OBJECTIVES FOR 2021 Objectives Progress Operational efficiency ▪ Restore the business to pre-COVID-19 levels ▪ Higher margins in AMG ▪ Margin improvement in SA ▪ Deliver high quality outcomes ▪ Consistent quality outcomes High quality care Radiology partner of ▪ Grow AMG business
Slide 7: Diversifying revenue and normalised EBITDA mix
GROUP OVERVIEW CONTINUED PROGRESS IN DIVERSIFYING REVENUE AND NORMALISED EBITDA MIX GEOGRAPHICALLY AND GROWING NON-ACUTE HEALTHCARE SERVICES Normalised Acute versus Revenue (%) EBITDA (%) non-acute revenue (%) 26% 25% 22% 23% 21% 25% 29% 30% 28% 30% 38% 36% 74% 75% 78% 77% 79% 75% 71% 70% 72% 70% 62
Slide 8: Operational Review International
Operational Review International Mark Chapman CEO International 8
Slide 9: Alliance Medical Group
ALLIANCE MEDICAL GROUP Europe’s leading independent provider of imaging services Unaudited Group interim results for the six months ended 31 March 2021 9
Slide 10: COVID-19 Update | International
COVID-19 UPDATE | INTERNATIONAL RESILIENT OPERATIONAL PERFORMANCE UK scan volumes ▪ AMG continues to see an improvement in demand for its (100 = Jan 2020) services across almost all territories despite the ongoing 125 pandemic and lockdowns in many regions 100 75 ▪ AMG continues to provide COVID-19-
Slide 11: International: Strong Overall Performance
H1-2021 | INTERNATIONAL STRONG OVERALL PERFORMANCE % ▪ Underlying revenue and normalised H1-2021 H1-2020 change EBITDA growth from: Revenue (£’m) 177.5 151.5 17.2 ▪ Resilience and growth in PET-CT scan volumes in the UK Business as usual (£’m) 162.2 158.4 2.4 ▪ Strong growth across Ireland Estimated
Slide 12: International: Estimated COVID-19 Impact
H1-2021 | INTERNATIONAL ESTIMATED COVID-19 IMPACT ▪ Diagnostic imaging saw a reduction in volumes throughout H1-2021 in UK and Italy, with volumes around 90% of pre COVID-19, but increasing towards the end of H1-2021 ▪ Volumes in some regions, most notably within mobile services in the UK and Irelan
Slide 13: Supporting Public Healthcare Providers
H1-2021 | INTERNATIONAL SUPPORTING PUBLIC HEALTHCARE PROVIDERS ▪ During initial phases of the COVID-19 pandemic we supported ▪ Waiting lists are at all time highs in many countries and are national healthcare providers by offering additional COVID-19 continuing to grow support measures: ▪ May lead t
Slide 14: AMG: Overview
H1-2021 | INTERNATIONAL AMG: OVERVIEW UK Italy Ireland Other geographies ▪ DI static sites 30 Spain Netherlands Germany Finland ▪ PET-CT national ▪ Owned clinics 34 contract sites 37 ▪ Static sites 7 ▪ Operating sites 32 ▪ Mobiles 55 ▪ Cyclotron site 1 Estonia Norway Switzerland Austria ▪ Cyclotron
Slide 15: AMG: UK Molecular Imaging
H1-2021 | INTERNATIONAL AMG: UK MOLECULAR IMAGING (MI) ▪ PET-CT wave 1 MI as a % of UK revenue 2021 skewed by 54% additional ▪ MI growth underpinned by 10-year PET-CT 52% revenue through NHSE CT contract wave 1 contract 51% ▪ Pricing certainty until December 2025 47% ▪ PET-CT wave 2 ▪ Four separate
Slide 16: AMG: UK Diagnostic Imaging
H1-2021 | INTERNATIONAL AMG: UK DIAGNOSTIC IMAGING (DI) Growth in longer-term contracts Long Term Short Term ▪ Strategic focus continues to be on long-term partnership solutions with hospital trusts 41 36 53 59 ▪ Over the last 12 months we have been reactive to 59 64 47 41 shorter-term opportunities
Slide 17: AMG: Italy, Ireland and Other Regions
H1-2021 | INTERNATIONAL AMG: ITALY, IRELAND AND OTHER REGIONS ▪ Revenue up 13.7% as a result of recovery in volumes supplemented by COVID-19 blood testing activity ▪ 8.0% growth in H1-2021 from diagnostic scanning volume vs H1-2020 (20.2% including lab activity) ▪ Focus on continuing scanning volume
Slide 18: Quality | International
QUALITY | INTERNATIONAL CONTINUED FOCUS ON QUALITY OUTCOMES AND PATIENT EXPERIENCE Year-on-year Clinical quality indicator H1-2021 H1-2020 H1-2019 Target trend UK Patient experience (satisfied and very satisfied) 96.9% 97.4% 95.6% ➔ >90.0% Friends and family score 96.0% 96.3% 95.0% ➔ >90.0% Written
Slide 19: Operational Review Southern Africa
Operational Review Southern Africa Adam Pyle CEO southern Africa
Slide 20: COVID-19 Update | Southern Africa
COVID-19 UPDATE | SOUTHERN AFRICA COVID-19 PPDs in Life Healthcare facilities Life Healthcare COVID-19 admissions in April and May 2021 3 000 Total 182 186 199 256 325 373 560 admissions Wave 2 300 Wave 1 2 000 200 1 000 100 0 0 Feb 20 Jul 20 Sep 20 Feb 21 Apr 20 Dec 20 Apr 21 Mar 20 May 20 Aug 20 O
Slide 21: COVID-19 Update | Southern Africa
COVID-19 UPDATE | SOUTHERN AFRICA Total PPDS Theatre minutes 200 000 H2-2020 vs H1-2021 H2-2020 vs H1-2021 2 000 150 000 1 500 100 000 1 000 50 000 500 0 - Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Mth 1 Mth 2 Mth 3 Mth 4 Mth 5 Mth 6 COVID-19 PPds Non-COVID-19 PPDs H2 20 H1 21 COVID-19 PPDs H
Slide 22: Southern Africa Business Overview
H1-2021 | SOUTHERN AFRICA BUSINESS OVERVIEW: SEQUENTIAL IMPROVEMENT IN NUMBERS Overview Revenue mix (R million) ▪ Acute hospital business has shown a solid recovery despite the severe 2nd COVID-19 wave impact. Learnings from the 1st Four-year CAGR 4.5% COVID-19 wave and a rebound in elective surgica
Slide 23: Acute Hospitals and Complementary Services
H1-2021 | SOUTHERN AFRICA ACUTE HOSPITALS AND COMPLEMENTARY SERVICES % ▪ Revenue and normalised EBITDA 2021 2020 change trend improving from April 2020 PPD growth (14.9%) 0.2% onwards despite 2nd COVID-19 wave Revenue (R’m) 9 087 9 402 (3.4) ▪ Growth in revenue per PPD driven by change in case mix t
Slide 24: Acute Hospitals: Overview
H1-2021 | SOUTHERN AFRICA ACUTE HOSPITALS: OVERVIEW Daily occupancies Acute PPDs 80% 1 200 ▪ General improvement from H1-2020 to 70% 1 000 -25.9% H1-2021 after weaker H2-2020 60% 14.5% 800 50% ▪ March 2021 results are a good indicator of 600 40% business learnings and the business adapting 30% 400 f
Slide 25: Complementary Services: Overview
H1-2021 | SOUTHERN AFRICA COMPLEMENTARY SERVICES: OVERVIEW Mental Health PPDs Acute Rehabilitation PPDs 80 000 50 000 -30.0% -15.6% 18.2% 2.7% 60 000 40 000 30 000 40 000 20 000 20 000 10 000 - - H1 20 H2 20 H1 21 H1 20 H2 20 H1 21 PPDs PPDs Renal Dialysis treatments Oncology treatments 12 500 11.2%
Slide 26: Healthcare Services: Overview
H1-2021 | SOUTHERN AFRICA HEALTHCARE SERVICES: OVERVIEW Normalised EBITDA margin (%) Life Esidimeni ▪ Stable performance in terms of activities, revenue and 10.8% 9.3% 16.6% margins despite the 2nd COVID-19 wave +12.0% +71.8% ▪ 516 000 PPDs during the current period 122 736 ▪ 10 facilities with 3 16
Slide 27: Quality | Southern Africa
QUALITY | SOUTHERN AFRICA CONTINUED FOCUS ON QUALITY OUTCOMES AND PATIENT EXPERIENCE Patient Adverse Event Rate Employee Safety Measures 2.8 5.0 ▪ Good overall quality performance in COVID-19 context 2.6 4.5 ▪ General trend shows improvement on prior years ▪ Patient experience on par with prior year
Slide 28: Financial Review
Financial Review Pieter van der Westhuizen Group CFO
Slide 29: Results Summary
H1-2021 | RESULTS SUMMARY Reported revenue NEPS from continuing +4.0% to R13.0 billion Cash generated from operations operations of -2.4% Reported normalised EBITDA R2.3 billion to 52.8 cps -14.3% Strong financial Disposal of Scanmed position Net debt / net proceeds of normalised EBITDA* R681 millio
Slide 30: Financial Statutory Results
H1-2021 | FINANCIAL STATUTORY RESULTS GROUP 2021 2020¹ % R’m R’m change Continuing operations ▪ H1-2021 significantly impacted by Revenue 13 004 12 504 4.0 second COVID-19 wave, whereas the effect of the first wave was only felt Normalised EBITDA 2 418 2 822 (14.3) for a brief period in H1-2020 Norm
Slide 31: Underlying Financial Results
H1-2021 | UNDERLYING FINANCIAL RESULTS GROUP 2021 2021 2021 2020 2020 2020 Change in As COVID-19 Underlying As COVID-19 Underlying underlying reported impact results Reported impact results results R’m R’m R’m R’m R’m R’m % Continuing operations Revenue 13 004 355 13 359 12 504 245 12 749 4.8 Normal
Slide 32: Earnings Per Share
H1-2021 | EARNINGS PER SHARE GROUP 2021 2020 % change Weighted average number of shares (million) 1 454 1 455 (0.1) EPS from continuing and discontinued operations (cents) 55.9 53.7 4.1 HEPS from continuing and discontinued operations (cents) 47.4 53.8 (11.9) NEPS from continuing and discontinued op
Slide 33: Segmental Financial Results
H1-2021 | SEGMENTAL FINANCIAL RESULTS CONTINUING OPERATIONS Constant 2021 2020 2 500 25% currency (%) R’m R’m % EBITDA (R millions) EBITDA margin (%) 2 000 20% Revenue 1.6 13 004 12 504 4.0 1 500 15% Southern Africa (3.4) 9 087 9 402 (3.4) International 17.2 3 747 2 945 27.2 1 000 10% Growth initiat
Slide 34: Consolidated Condensed Statement of Financial Position
H1-2021 | CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION GROUP Mar 2021 Sep 2020 R’m R’m Non-current assets 31 581 35 328 Property, plant and equipment 13 643 15 361 ▪ Strong financial position Goodwill 13 246 14 315 ▪ Available undrawn facilities Intangible assets 3 259 3 923 of R6.4 billio
Slide 35: Debt Breakdown
H1-2021 | DEBT BREAKDOWN FY2020 2021 2021 Weighted avg. FY2020 FY2020 Weighted avg. cost Funding Local currency ’m R’m cost of debt % Local currency ‘m R’m of debt % (post-tax) (post-tax) Acquisition funding ZAR 500 500 4.22 500 500 4.41 PLN - - - 93 407 2.26 GBP 124 2 511 1.80 139 3 037 1.80 Capex
Slide 36: Debt Repayment Profile
H1-2021 | DEBT REPAYMENT PROFILE Balance at Maturing in Maturing in Maturing in Maturing in Maturing in R’m 31 March 2021 FY2021 FY2022 FY2023 FY2024 FY2025 or later Bank Debt 9 451 (812) (1 884) (3 648) (1) (3 106) Lease liabilities 2 298 (212) (341) (478) (169) (1 098) Total debt 11 749 (1 024) (2
Slide 37: Growth Initiatives
Growth Initiatives Peter Wharton-Hood Group Chief Executive 37
Slide 38: Growth Initiatives | Life Molecular Imaging (LMI)
GROWTH INITIATIVES | LIFE MOLECULAR IMAGING (LMI) NeuraCeqTM ▪ Is an approved amyloid imaging tracer – used in PET-CT scans to help diagnose Alzheimer’s disease ▪ LMI is in discussions on reimbursement and commercial sales contracts ▪ Biogen is co-developing Aducanumab, a drug which may slow the eff
Slide 39: Growth Initiatives | Southern Africa
GROWTH INITIATIVES | SOUTHERN AFRICA Southern Africa Comparison of scans done by AMG vs SA private sector ▪ Good growth opportunities within the existing market 887k 104k ▪ Focus on execution 734k ▪ Invest in IT infrastructure to enable digital innovation SA imaging 12k ▪ Continued progress made ▪ O
Slide 40: Outlook
Outlook Peter Wharton-Hood Group Chief Executive 40
Slide 41: FY2021 | Vaccination Update
FY2021 | VACCINATION UPDATE ▪ UK and Europe making good progress with vaccinating the bulk of their populations International ▪ AMG hopes to complete vaccination of all its healthcare workers in H2-2021 ▪ c.72% of all AMG healthcare workers have received their first vaccine ▪ c.75% of all Life Healt
Slide 42: FY2021 | Outlook
FY2021 | OUTLOOK ▪ More ‘normalised’ operating environment due to progress in vaccination efforts ▪ Continued growth in underlying scan volumes across UK, Ireland and Europe in H2-2021 International ▪ Dinnington now operational; will commence with maintenance of Sutton radiopharmacy ▪ Invest in LMI
Slide 43: Questions
e L ife Healthcare
Life Healthcare Group Holdings — H1 2021 Earnings Presentation on 6ix