UBS Australian Health Care Conference 9 November 2010 Ramsay Health Care Christopher Rex, Managing Director
AGENDA A global company Group FY10 highlights Capital management Our growth strategy Our operating environment - Australia, UK, France Our latest acquisition - Ramsay Santé Brownfield developments Outlook 2
A GLOBAL COMPANY Australia s largest private hospital operator Recently admitted into the S&P/ASX100 One of the largest private hospital operators in the world Operating on three continents Employing more than 30,000 people 3
GROUP FY10 HIGHLIGHTS YEAR ENDED 30 JUNE 2010 $m 2009 $m % Increase Australia/ Indonesia UK France (1) Group (1) Group Operating Revenue 2,716.7 628.0 54.6 3,399.3 3,223.8 5.4% EBITDA 369.9 90.4 8.5 468.8 411.6 13.9% EBIT 280.0 48.4 5.4 333.8 303.3 10.0% Core NPAT (2) 178.5 146.4 21.9% Core EPS (3) 84.5 74.1 14.0% Full-year Dividend fully franked 43.5 38.0 14.5% 1.Three months of results from Ramsay Santé have been included in FY10 2.Core NPAT is from continuing operations, before specific items and amortisation of intangibles 3.Core Earnings Per Share are before specific items and amortisation of intangibles and after CARES dividends 4
CAPITAL MANAGEMENT Debt Profile Committed senior bank debt facilities of $1.9 billion in place until November 2012 Headroom of $500 million to $600 million after acquisition of French hospital group Ramsay Santé and after allowing for funding of current brownfield commitments 5
CAPITAL MANAGEMENT 6.0 5.0 Affinity Acquisition (Australia) 5.1 Leverage = Net Debt / EBITDA Capio UK Acquisition 4.0 3.7 Group Proclif Acquisition (France) 3.0 2.0 3.3 2.6 2.7 2.7 2.4 2.3 FY05 FY06 FY07 FY08 FY09 Dec-09 Mar-10 Jun-10 Ramsay uses debt efficiently and has a track record of reducing its leverage ratio after making acquisitions 6
Estimate REVENUE GROWTH MILESTONES - Affinity Group acquired April 2005 - Benchmark Group acquired July 2004 - Capio UK acquired November 2007 - Group Proclif France acquired March 2010 - Greenslopes major brownfield expansion opened May 2003 - Hollywood major brownfield expansion opened July 2002 - Alpha Group acquired May2001 Ramsay listed 24 September 1997 FY ended 30 June * FY 2010 includes 3 months of Ramsay Santé 7
Index (base of 100) GROWTH STRATEGY DELIVERING STRONG RETURNS 2500 Ramsay Total Shareholder Return versus ASX100 (share price appreciation plus dividends) Ramsay Total Shareholder Return 1 Jan 2000 to 30 Sept 2010: 2109% 2000 1500 1000 500 ASX 100 Total Shareholder Return from 1 Jan 2000 to 30 Sept 2010: 133% 0 RHC.AX Total Shareholder Return ASX 100 Total Shareholder Return Source: Iress, Bloomberg, UBS 8
OUR GROWTH STRATEGY Capturing organic growth driven by positive demographic factors Investing in capacity expansion of existing facilities to grow market share Acquiring businesses in existing and new markets A growing global hospital operator 9
GLOBAL INDUSTRY FUNDAMENTALS DRIVING GROWTH Ageing population Expanding population Increase in chronic diseases Technological advances INCREASING DEMAND FOR HEALTH CARE PROVISION 10
THE AUSTRALIAN HEALTH CARE SYSTEM Balanced health care system Cultural Political Financial Industry features Respected private providers Choice & access Low cost, attractive insurance product Comprehensive cover Community rated 30% rebate Lifetime health cover Medicare Levy Surcharge 11
OUR OPERATING ENVIRONMENT AUSTRALIA Positive demographics Ageing population Proportion of population aged 65+ to grow from 14.3% to 25.7% by 2050* Expanding population Increasing life expectancy Australia has third-highest life expectancy in OECD* Health insurance membership steady June quarter PHIAC data shows 44.6% of population have hospital treatment cover Federal political environment Health reform process and opportunities * Source: OECD 12
OUR OPERATING ENVIRONMENT UK Positive demographics Ageing population Proportion of population aged 65+ to grow from 16.7% to 26.2% by 2050* Expanding population Political environment Coalition committed to private sector participation in NHS White Paper firmly supports increased role for private sector NHS ring fenced from Government spending cuts UK economy slowly recovering National Health Service market still vibrant and active *Source : OECD 13
RAMSAY SANTÉ Ramsay Santé is a platform for expansion in the French market Wellestablished business Second-largest private hospital operator in the greater Paris region Nine specialist hospitals benefiting from significant capital expenditure on new equipment and refurbishment over the last two years to create state-of-the-art facilities Annual revenues of 140 million Platform for future growth Opportunity to achieve enhanced margins Ramsay Santé has evolved by acquisition and provides a solid base for expansion and further acquisitions Introduction of Predica as a local investment partner in Ramsay Santé enhances joint opportunities in the French market Highly fragmented market presents significant opportunities for Ramsay to expand its quality portfolio of hospitals and apply its proven model and management expertise 14
OUR OPERATING ENVIRONMENT FRANCE Positive demographics Ageing population Proportion of population aged 65+ to grow from 16.5% to 24.1% by 2050* Expanding population Health administration reforms support our investment strategy Devolvement of decision making Economy holding up Continued political commitment to private sector involvement in the provision of public services Muted competition for hospital assets Market acquisition pricing expectations subdued *Source : OECD 15
BROWNFIELD DEVELOPMENTS Brownfield development programme well advanced and running on time and to budget Key projects completed in FY10 and FY11 to date include: Hollywood (Perth): Completed 1 st Half FY10 St George (Sydney): Completed 2 nd Half FY10 New Farm Clinic (Brisbane): Completed 2nd Half FY09 Lawrence Hargrave (Wollongong): Completed 1 st Half FY10 North Shore (Sydney): Completed 1 st Half FY11 Cairns Clinic: Completed 1 st Half FY11 Key projects to be completed in balance of FY11 include: Pindara (Gold Coast) North West (Brisbane) Westmead (Sydney) Kareena (Sydney) Joondalup (Perth) is on track for completion in mid CY 2013 16
OUTLOOK Clear and consistent strategy to pursue our vision to become a major global hospital operator Ageing and growing population to fuel demand for health care over the medium and long term Ramsay is well positioned to capture increased demand via capacity expansion, acquisitions and its quality hospital portfolio Completed brownfield projects continue to ramp up Continuing to explore further acquisition opportunities in the UK and France Ramsay reaffirms FY11 guidance: Barring unforeseen circumstances, targeting Core NPAT growth for the Group of 13%- 15% in FY11, translating to Core EPS growth of 10%-12% 17
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