Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — UBS Healthcare Conference October 2004
29 slides from Ramsay Health Care's conference presentation, Oct 27, 2004
Slide 1: UBS Healthcare Conference – October 2004
ne ms RAMSAY HEALTH CARE UBS HEALTHCARE CONFERENCE ~— October 2004 Pat Grier (Managing Director)
Slide 2: Overview of Ramsay Health Care
isay Overview of Ramsay Health Care Largest listed operator of private hospitals in Australia > > > > > > A portfolio of 35 hospitals, located throughout Australia Operating in all segments of the private hospital market. 16% of the total private hospital market Over 12,000 employees Annual revenue
Slide 3: Revenue Growth Time Line
as RAMSAY HEALTH CARE Revenue Growth Time Line $m 1,200- Benchmark Group Acquired Jul’04 1,100- 1,000- Greenslopes Major Expansion Opened May 03 900- Hollywood Major Expansion Opened Jul’02 800- 700 North Shore Private 600- Hosp Opened Jul'98 Alpha Group Acquired May’01 500 Greenslopes Veteran Hospi
Slide 4: Growth Strategy Overview
RAMSAY HEALTH CARE Growth Strategy Overview » Growth strategy > Organic growth through micro-management > Target lower risk, higher returns through investment in capacity expansion of existing hospital portfolio > Actively investigating growth opportunities within the: » Private hospital sector « Ag
Slide 5: Australian Private Hospital Industry
By Private Hospital Industry LTR CARE. » Federal election campaign underscored bi- partisan support for 30% health insurance rebate a» Re-election of Coalition Govt cements private hospitals role in balanced health care system » Private hospitals perform >» 56% of surgery in Australia >» 50% of comp
Slide 6: Private Hospital Industry (cont)
nae say Private Hospital Industry (cont ALYH CARE a» Health insurance industry outlook » Further rationalisation of health insurance sector (eg Grand United-Australian Unity merger) » Negotiation dynamics a» Industry outlook in the short-medium term >» Ageing population — increased demand by private
Slide 7: Australian Hospital Industry
ran kay Australian Hospital Industry HEALTH CARE = Pu blic Vv Private Sectors (source: Australian Bureau of Statistics 2001/02) Public Sector 749 52,200 68% Private Sector 301 24,748 32% a Analysis of Private Sector ( source: Australian Private Hospitals Association) “For Profit” 183 13,573 55% Reli
Slide 8: Overview of FY 2004
a Ancay Overview of FY 2004 ALYH CARE » Core net profit up 13%, building on strong profit growth of previous 3 years a» Delivered on forecast core profit growth of over 10% a Effective cost management results in EBITA margin holding at 10% a» Organic profit growth continues, at least 5% » Expansion
Slide 9: Financial Performance
Financial Performance Operating Revenue 662.2 16% EBITDA 91.0 16% EBITA 67.0 16% Net Profit before tax 53.5 15% Net Profit After Tax 37.1 14% Core Net Profit After Tax 37.7 13% ® Notes s Before non-recurring items and amortisation of goodwill s Non-recurring items (net of tax) comprise > Mayne bid c
Slide 10: Financial Performance (cont)
RAM GAY Financial Performance (cont) HEALTH CARE Core EPS () 29.3 ¢ 33.1 ¢ 13% Full year dividend — fully franked 15.5 ¢ 17.5 ¢ 13% ) Notes * Before non-recurring items and amortisation of goodwill " Reported EPS 28.9 ¢ 29.8 ¢
Slide 11: Core Net Profit Growth
Core Net Profit Growth 42.7 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004
Slide 12: EBITA Growth
EBITA Growth $M g0- 70- 60- 50- 404 30- 207 77.6 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004
Slide 13: Core Earnings per Share
nana Core Earnings per Share HEALTH CARE 33.1 357 307 257 207 Cents per Share FY 2000 Fy 2001 FY 2002 FY 2003 FY 2004
Slide 14: Margins Analysis
ose ay Margins Analysis ALT RE » Industry leader in operational margins » EBITDA margin 14% for the year » EBITA margin 10.1% for the year » EBITA margin 10.2% excluding Silver Circle » Benchmark hospital portfolio expected to be margin dilutive due to high proportion of leased facilities
Slide 15: Cash Flow Analysis
Cash Flow Analysis EBITDA/Cash Flow 100 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 @ EBITDA before non-recurring items 0 Cash Flow uw EBITDA translates into strong gross operating cash flow. Continuing effective cash flow management
Slide 16: Financial Indicators
Financial Indicators ROIC (EBITA/Funds Employed) % 10.4 14.9 13.9 15.2 ROE (NPAT/Shareholder Funds)% 8.0 13.9 14.6 15.5 Notes: w Calculated before non-recurring items
Slide 17: Benchmark Hospital Group
nanny Benchmark Hospital Group ALYH CARE a» Strategically significant acquisition for Ramsay Health Care > Increases market share in Victoria and South Australia, provides opportunity to make bolt-on acquisitions in those states >» Strengthens position with private health funds > Ability to generate
Slide 18: Benchmark Hospital Group (cont)
nAB ay Benchmark Hospital Group (co HEALTH CARE » Benchmark Hospital Group > Well-run portfolio of 10 hospitals located in Victoria and South Australia > 980 hospital beds, with 71 additional beds coming on stream in 2005 > 68 aged care beds «» Operational update > Confident purchase will meet our e
Slide 19: Aged Care Strategy
Aged Care Strategy Long-term strategy based on acquisitions & greenfield development Focus on specific profitable sectors of the market, accommodation bonds and chargeable extra service — user pays Acquisition opportunities >» Cautious approach - inflated price expectations > Looking at groups, as w
Slide 20: Our Strategic Advantage
RAM GAY Our Strategic Advantage ALTE € B Portfolio of strategically positioned, quality facilities » Strong referral base >» Facilities health fund members want to attend » Remained focused on core hospital management expertise » Not relying solely on acquisitions for growth - achieving growth organ
Slide 21: Outlook - Guidance
. RAMSAY Outlook - Guidance ALYR CARE » Targeting at least 10% growth in FY 2005 core net profit, based on: > Strategically positioned, quality facilities - admission growth > Efficient hospital management — EBITA margin, ROI/ROE >» Focus on cost containment, leveraging market position > Annual orga
Slide 22: Outlook - Acquisitions
Outlook - Acquisitions a Profit growth target does not include the benefits of further acquisitions » RHC continues to pursue strategic acquisitions > Hospitals (bolt-ons in South Australia & Victoria) > Aged Care
Slide 23: Appendix
ne ms RAMSAY HEALTH CARE Appendix
Slide 24: RAMSAY
RAMSAY HEALTH CARE $7.00 $6.00 | $5.00 5 September 2004 $4.00 + $3.00 4 $2.00 4 $1.00 +. Jun-97 Jun-98 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04
Slide 25: Diversified Income Stream (pre Benchmark)
Diversified Income Stream pre Benchmark HEALTH Cd Revenue by Division Revenue by State Revenue by Payor Source @ Psychiatric NSW 0 Health Funds Co-located 0 Victoria @ Rehabiliation . O Government © South Australia m Med/Surg . land @ Veteran © Aged Care Queenslan B@ Veteran @ West Australia @ Other
Slide 26: Diversified Income Stream (including Benchmark)
= Diversified Income Stream including Benchmark HEALTH Cd Revenue by Division Revenue by State Revenue by Payor Source @ Psychiatric NSW 0 Health Funds Co-located 0 Victoria @ Rehabiliation . O Government © South Australia m Med/Surg . land @ Veteran © Aged Care Queenslan B@ Veteran @ West Australia
Slide 27: RAMSAY
RAMSAY YH CARE HiGAL & o @ Cairns Private Hospital AS HARWE ~ OLD @ Greensiones Private Hospital @ New Farm Clinic REGIONAL SK @ Albury Wodoage Private Hospital @ warinya Private Hespitul % Cots viarbour Day Surgery @® eke Macquarie Private Hospital @ Temare Private Hospital SVBIEY REGION - Sou @ Be
Slide 28: Facility Portfolio
Facility Portfolio Number Li 4 Operating Divisions of ee Facilities () Veteran 2 983 Co-located 3 379 Regional Medical/Surgical 17 1,742 Psychiatric 8 541 Rehabilitation 4 231 Aged Care i 68 Totals 35 3,944 Notes a) facluding Benchmark Hospital Group acquired 1 July 2004
Slide 29: RAMSAY |
ne ms RAMSAY | HEALTH CARE
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