Sonic Healthcare Limited · ASX:SHL
Sonic Healthcare — Shareholder Meeting (November 2013)
49 slides from Sonic Healthcare's shareholder meeting presentation, Nov 21, 2013
Slide 1: Annual General Meeting 21 November 2013
SONIC Be ae Quality our DN Annual General Meeting 21 November 2013
Slide 2: 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 contro] of Sonic Healthcare. Readers are cautioned not to place undue reliance on f
Slide 3: FY13 growth: constant currency and statutory
Growth Constant Currency Statutory Revenue 4.7% 4.1% EBITDA 4.9%* 3.6% Net profit 7.1% 6.0% Earnings per share 5.5% 4.5% * 4.5% EBITDA growth after expensing $2.5 million implementation costs of US cost-out initiative ‣ ‣ ‣ ‣ ‣ ‣ ‣ Constant currency = FY ‘13 results restated using FY ‘12 currency ex
Slide 4: Dividends FY13 vs FY12
FY ‘13 FY ‘12 Growth Interim Dividend $0.25 $0.24 4% Final Dividend $0.37 $0.35 6% TOTAL Dividend $0.62 $0.59 5% ‣ Dividend franked to 45% ‣ Record Date 4 September 2013 ‣ Payment Date 24 September 2013 ‣ Dividend Reinvestment Plan suspended
Slide 5: Net debt, gearing and cover ratios
30 June ‘13 30 June ‘12 Net interest-bearing debt A$M 1,739 1,571 Gearing ratio % 37.3 37.6 Interest cover X 8.6 7.0 Debt cover X 2.4 2.5 ‣ Available headroom >$400 million post Labco acquisition ‣ Increased net debt due to weaker AUD ‣ Gearing ratio = Net debt / Net debt + equity (bank covenant lim
Slide 6: FY14 guidance
‣ EBITDA growth of approximately 5% ‣ Guidance based on constant currency rates (FY ‘13 FX rates) ‣ Equates to approximately 11% growth at current exchange rates ‣ Includes estimated impacts of possible FY ’14 fee adjustments in Australia, Germany, Belgium and the USA ‣ Excludes Labco and future acq
Slide 7: Shareholder Update
Sonic Healthcare Shareholder Update @ SONIC HEALTHCARE Quality is in our DNA
Slide 8: Sonic at a glance: from small lab to $3.5 billion revenue
‣ Unconventional story ‣ Customised corporate philosophy ‣ Unusual corporate structure ‣ From small lab in Top Ryde, Sydney… ‣ …to annual revenues of $3.5 billion ‣ …employing 26,000 people ‣ …in 3 continents ‣ …market leader in Australia and Germany ‣ …No. 3 player in the USA ‣ Top 50 ASX company ‣
Slide 9: Revenue split: Pathology, Radiology, IPN
IPN 10% Radiology 12% Pathology 78%
Slide 10: Sonic history: 1987 to 1999
‣ Established in 1987 ‣ Sonic acquires Douglass Laboratories (revenues A$13 million p.a.) ‣ Pathology market fragmented, cottage industry ‣ 1992-1993 ‣ Takeover offer for Sonic (at $0.15 per share) ‣ New majority owner, new Board, new management ‣ 1994-1998 ‣ Series of acquisitions in NSW, SA and AC
Slide 11: Why a pathologist as CEO
‣ Established in 1987 ‣ Single pathology lab in Sydney (Douglass Laboratories) ‣ Pathology market fragmented ‣ 1992-1993 ‣ Takeover offer for Sonic @ $0.15 per share ‣ New majority owner, new Board, new management ‣ Appointment of (unsuspecting) pathologist as CEO of Sonic! ‣ Why a pathologist? ‣ Pa
Slide 12: Australian Pathology: FY13 revenue A$1,067 million
Australian Pathology 31% • FY’13 revenue A$1,067 million • 9,200 employed staff
Slide 13: Modern Laboratories
Modern Laboratories SONIC HEALTHCARE ality is in our DN
Slide 14: State-of-the-art Automation
State-of-the-art Automation ae ao | B(i+roe S ————— nent Too 5 — oa a eS lr ee SONIC HEALTHCARE Quality is in our DN
Slide 15: The Sonic Difference
‣ Consensus and unity achieved ‣ Business model ‣ Corporate structure ‣ Business philosophy ‣ Outcomes ‣ Core Values ‣ Medical Leadership The Sonic Difference ‣ Federated structure SonicConnect A dedicated Sonic department To connect Sonic’s people globally To promote The Sonic Difference
Slide 16: Sonic Core Values
\ SONIC HEALTHCARE Quality is in our DNA Sonic Core Values Commit to Service Excellence To ilngly serve al ose with whom we dea: with unsurpassed exelence. Treat each other with Respect & Honesty To grow a werkploce where trust, team spt, and equity are an integral part ofemiyting we ce Demonstrate
Slide 17: Medical Leadership Model
Medical Leadership Model ©) Medical Leadership Personalised Professional Service for Respect for Company Operational & Doctors & our People Conscience Excellence Academic Bee Fa tai a TB 8 aN ak Sead pm ome atien' pertise | @ SONIC HEALTHCARE Quality is in our DNA
Slide 18: Federated structure and synergies
Major brand names retained Local management autonomy Local ‘flavour’ preserved DHM Staff morale enhanced Revenue fallout minimised Clinipath Synergy capture facilitated SNP SYNERGIES • Procurement DSPL Sonic MP • Benchmarking • IT • E-Health • Shared marketing Capital • Quality Systems Clinpath • Le
Slide 19: Sonic Healthcare Model
Sonic Healthcare Model AW ©) Medical Leadership @ | SONIC HEALTHCARE Qu uur DNA
Slide 20: Sonic Imaging: FY13 revenue A$404 million
Sonic Imaging . 12% Epworth Radiology FY’13 revenue A$404 million 2,300 employed staff
Slide 21: Australian position and overseas expansion analysis
‣ Sonic’s position in Australian pathology ‣ Market leader ‣ ~35% market share ‣ Further acquisitional growth limited ‣ Proven, successful model ‣ Core Values ‣ Medical Leadership ‣ Federated management structure ‣ Analysis of off-shore pathology markets ‣ Would the Sonic model succeed in overseas m
Slide 22: International expansion timeline
‣ 2002 – UK ‣ 2004 – Germany ‣ 2005 – USA ‣ 2007 – Switzerland ‣ 2010 – Belgium, Ireland
Slide 23: Global Operations
Global Operations 2010 2010 BELGIUM TRELANO 2004 GERMANY UNITED ered 2007 SWITZERLAND 2005 UNITED STATES = “ Pr 1287 1999 NEW ZEALAND @ SONIC HEALTHCARE Quality is in our DNA
Slide 24: Revenue by country
IPN $332 10% New Zealand $41 1% Imaging Australia $404 $1,067 12% 31% Switzerland $77 2% Belgium $98 3% UK & Ireland $148 4% Germany USA $565 $749 16% 21% Statutory revenue in A$ million IPN - Medical centres and occupational health services in Australia
Slide 25: Major Markets
Sonic Healthcare Major Markets @ SONIC HEALTHCARE NA,
Slide 26: USA: FY13 revenue A$749 million
USA 21% • FY’13 revenue A$749 million • 6,000 employed staff • Head Office: Austin, Texas
Slide 27: US operations by state
Washington Montana Maine North Dakota Minnesota Oregon V NH Idaho Wisconsin Mass. South Dakota New York Wyoming Michigan CT Iowa Pennsylvania Nevada Nebraska NJ Utah Illinois Ohio Indiana California Colorado W. Va. Kansas Virginia Missouri Kentucky Tennessee N. Carolina Oklahoma Arizona Arkansas S.
Slide 28: Germany: FY13 revenue A$565 million
Germany 16% Sonic Healthcare Germany Laboratory locations • FY’13 revenue A$565 million • 4,000 employed staff • Head Office: Berlin
Slide 29: Sonic and Labco laboratory sites in Germany
‣ ‣ ‣ ‣ ~ Duisburg Dillenburg ‣ Giessen ‣ ‣ Labco HQ ‣ Saarbrücken ‣ Karlsruhe Sonic laboratory sites Labco sites
Slide 30: Schottdorf Laboratory, Augsburg
Schottdorf Laboratory Augsburg, Germany 2) SONIC HEALTHCARE
Slide 31: Slide 31
Slide 32: Lab / Sonic Germany Head Office
Lab 28 / Sonic Germany Head Office Berlin, Germany
Slide 33: Sonic Environment: customisation of core values
DHM Clinipath SNP DSPL Soni MP c Capital Clinpath S.IML Customisation of Sonic Core Values Environment Accuracy Experts in field services Care for our people Environment Community care Turnaround times Leaders in field Lab-clinician Technical excellence Staff feeling valued Charities Centres of rela
Slide 34: HEAL Africa Hospital
HEAL Africa Hospital Goma, Democratic Republic of the Congo ? RE ( isangani L. THE / Equatar ~*~ Mag Mbandaka r SAUDI ARABIA INSHASA «l!2b0 Va Be Miatadi_ Nal Kananga, va js : la @ ; Barina \ 2 Tshikapa hyelemnie S = \. f _ $ Tanganyika | wi 7 g ; ? e BASES, { sovne ANGOLA ) koWwezi, Likasi} HADACAS
Slide 35: One of the most underprivileged areas in the world
“One of the most underprivileged areas in the world”
Slide 36: HEAL Africa Hospital
HEAL Africa Hospital @ SONIC HEALTHCARE Quality is in our DNA
Slide 37: HEAL Africa Hospital
HEAL Africa Hospital @ | SONIC HEALTHCARE Quality is DN
Slide 38: Sonic Healthcare supports HEAL Africa Hospital
Sonic Healthcare supports HEAL Africa Hospital @ | SONIC HEALTHCARE Quality is in our DNA
Slide 39: Sonic Healthcare supports HEAL Africa Hospital
Sonic Healthcare supports HEAL Africa Hospital @ SONIC HEALTHCARE Quality is in our DNA
Slide 40: Sonic / Africa / Charity
Sonic / Africa / Charity » A Sonic global initiative (Sonic’s Catalyst Program) » On-site provision of training and resources » Sonic has made a big difference » Literally saving lives » Ahighly cost-effective charitable activity » Program has galvanised and inspired Sonic’s people @ SONIC HEALTHCAR
Slide 41: Building on our solid foundation
Building on our solid foundation… For future success
Slide 42: Revenue 1993-2013
A$ M - 500 1,000 1,500 2,000 2,500 3,000 3,500 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Slide 43: Dividends per share 1993-2013
A$ cents 100 - 10 20 30 40 50 60 70 80 90 1993 1994 1995 1996 cents 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Slide 44: Culture, values and financial drivers
Respect for staff Empathy with staff Maintain medical focus Passion Focus on quality Management integrity Ethical practice Culture Best Financial Service Drivers Values
Slide 45: Pathology industry growth drivers and funding
‣ Pathology integral to healthcare system ‣ 70% of all medical diagnoses depend on pathology ‣ 100% of cancer diagnoses depend on pathology ‣ Strong underlying growth drivers ‣ Ageing of population ‣ New tests ‣ Genetic testing ‣ Preventative medicine – front end vs back end ‣ Funding ‣ Some fee cut
Slide 46: Overview of Sonic Healthcare
Overview of Sonic Healthcare » World’s third-largest medical diagnostics company » Market leader in Australia, Germany, UK » 26,000 employees » Attractive and growing global healthcare markets » Proven business model » Successful consolidator of fragmented markets » Market differentiation to drive o
Slide 47: Staff first, culture and quality
‣ Staff first ‣ Preservation of strong culture and values ‣ Pursuit of quality, service and good medicine ‣ Our business is a force for good: ‣ We see millions of patients each year ‣ We perform millions of tests/examinations each year ‣ Our work is the backbone of the healthcare system ‣ We prevent
Slide 48: Thank you
Q SONIC HEALTHCARE Quality is in our DNA Thank you
Slide 49: 2013 Annual General Meeting Proxy Results
Sonic Healthcare Limited 2013 Annual General Meeting Proxy Results OPEN TO RESOLUTION FOR AGAINST OPEN ABSTAIN CHAIR 1 Ms Kate Spargo 237,977,532 10,553,689 20,846,294 20,295,460 724,811 Re-election as Director 2 Dr Jane Wilson 240,550,603 8,388,624 20,852,889 20,297,455 310,210 Re-election as Direc
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