ANNUAL GENERAL MEETING 22 November 2005
CHAIRMAN S OVERVIEW FY 2005 Year of transition, Affinity acquisition doubles size of company Affinity acquisition most exciting development in Ramsay history welcomed by share market and industry Private hospital industry offers strong growth potential for quality operators Ramsay now has portfolio of 72 hospital facilities, 23,000 staff, revenue over $2 bln Ramsay now around 115 th biggest company on ASX by market capitalisation 2
FINANCIAL HIGHLIGHTS Core NPAT up 27% to $54.1m Group revenue up 88% to $1,442.8m Group EBITA up 62% to $125.8m Core EPS of 39 cps, up 18% Final dividend 11.5cps, fully franked, full year dividend to 20cps, up 14% Dividend reinvestment plan reinstated 3
FY2005 RESULTS EXCLUDING AFFINITY Core net profit up 21% to $51.8m Revenue up 44% to $1.1bln Excluding Benchmark revenue rose 12.3% EBITA up 25% to $96.8m Excluding Benchmark EBITA rose 11% EBITA margin (excluding Benchmark) holding at 10%, despite dilution from prosthesis and aged care 4
CORE NET PROFIT GROWTH TARGET EXCEEDED $m 60 54.1 45 30 51.8 15 31.6 37.7 42.7 16.8 0 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 RHC (existing business) Affinity ( acq Apr'05) 5
CORE EARNINGS PER SHARE GROWTH 40 39.0 33.1 30 25.0 29.3 Cents/share 20 14.9 10 7.9 0 FY2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 Core EPS up 18% for the year Average annual compound growth rate over 5 years of 37.6% (base year FY 2000) 6
DIVIDEND GROWTH Cents/Share 24 20 16 12 8 4 0 20.0* 17.5* 15.5* 11.5 11.0 10.0 9.0 8.5 7.4 6.5 5.0 4.4 6.5 7.5 8.5 3.0 3.5 4.5 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 Interim Dividend Final Dividend * Dividend fully franked 2005 full year dividend up 14% 7
RAMSAY S GROWTH STRATEGY Focus on management of core hospital business Underwrites strong organic growth Growth through investing in brownfield development Higher return on investment Expands capacity Enhances portfolio Grow through acquisitions in the hospital sector Further stand-alone hospital acquisitions possible Investigate opportunities outside hospitals, close to core competencies aged care, diagnostics, allied services 8
REVENUE GROWTH TIME LINE $m 2,400 2,200 Affinity Acquired Apr 05 5 Ellis Aged Care Facilities Acq Feb 05 Divestment Hospitals 2,000 1,800 1,600 1,400 1,200 1,000 Hollywood Veteran Perth acquired & privatised Jan 94 Greenslopes Veteran Brisbane acquired & privatised Feb 95 Greenslopes Major Expansion Opened May 03 Hollywood Major Expansion Opened Jul 02 Alpha Group Acquired May 01 Benchmark Group Acquired Jul 04 Target * 800 600 400 North Shore Private Hosp Opened Jul 98 RHC Listed Sep 97 200 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 * After divestment of 19 hospitals (14 hospitals sold to Healthscope on 1 Nov 05, the remaining 5 hospitals are expected to finalised over the next 2 to 3 months) 9
THE NEW RAMSAY Premier private hospital portfolio in Australia, annual revenue in excess of $2 billion Hospital Portfolio (post divestments) to have around 30% market share (based on number of hospital beds) 72 hospitals and clinics (including 3 in Indonesia) Over 7,500 beds More than 20,000 employees Over 1 million admissions per year Diversified income stream Medical surgical (high growth area) Veteran Rehabilitation Psychiatric Indonesia 10
NEW RAMSAY REVENUE SPLIT Pro Forma Revenue by Division Pro Forma Revenue by State Psychiatric 4% Rehab 2% Aged Care 1% SA 4% Veteran 14% WA 14% NSW 36% Co-located 19% Med/Surg Other 60% VIC 22% QLD 24% 11
Ramsay Network of Hospitals 12
NEW RAMSAY - QUALITY PORTFOLIO St George Private Hospital 206 beds 315 FTE staff 10 theatres High level medical/surgical and maternity facility Collocated with St George Public in Kogarah, Sydney, NSW John Flynn Private Hospital 269 beds 568 FTE staff 7 theatres High level medical/surgical and cancer facility Gold Coast, Qld 13
NEW RAMSAY - QUALITY PORTFOLIO Greenslopes Private Hospital 562 beds 1304 FTE staff 14 theatres (from May 2006) Largest private hospital in Australia Awarded best private hospital 2004 (APHA) Former Repatriation facility located in Brisbane, Qld North Shore Private Hospital 176 beds 433 FTE staff 8 theatres High level medical/surgical and maternity facility Collocated with Royal North Shore, Sydney, NSW 14
NEW RAMSAY - QUALITY PORTFOLIO Hollywood Private Hospital 430 beds 847 FTE staff High level medical/surgical facility Former Repatriation facility located in Perth, WA Warringal Private Hospital 145 beds 200 FTE staff High level medical/surgical facility Specialising in orthopaedics Heidelberg, Vic 15
NEW RAMSAY - QUALITY PORTFOLIO Joondalup Health Campus 379 beds 826 FTE staff high level medical/surgical/maternity campus includes public and private facilities collocated relatively new facility located in growth corridor of Perth, WA Westmead Private Hospital 136 beds 365 FTE staff high level medical/surgical hospital specialising in neurosurgery, maternity and cardiac surgery collocated with Westmead Public Hospital located in growth region in western Sydney, NSW 16
AFFINITY ACQUISITION BENEFITS Premier Australian private hospital portfolio Enhances Ramsay s ability to take advantage of growing demand for private hospital services Upside through application of key elements of Ramsay successful business model to the Affinity portfolio Economies of scale Market influence Industry leadership Enhanced growth potential through brownfield expansion at Affinity hospitals Increases Ramsay s presence in the attractive high acuity hospital market segment 17
OPERATIONAL UPDATE Sale of 14 hospitals to Healthscope 1 November 2005, strong price realised Divestment process for additional 5 hospitals underway, aim to execute sale by year end Affinity integration successfully underway New Ramsay building a platform for continuing solid growth, and upside from Affinity hospitals Strategic review of all assets, including aged care, underway to optimize shareholder value Exploring possible sale of aged care business 18
OUTLOOK Affinity acquisition enhances Ramsay s longterm growth potential 1 st Phase - Acquisition synergies Integration Economies of Scale 2 nd Phase - Upside through value-added management, margin improvement 3 rd Phase - Brownfield capacity expansion Future industry capacity shortage 19
OUTLOOK First 4 months of FY2006 on track for year target FY2006 target post-divestments: Core net profit growth expected to be significantly higher than last year due to Affinity contribution But targeting low double-digit core EPS growth (after payment of CARES dividend) due to more shares on issue Over the 3-5 years, profit growth to be driven by: Continuing strong organic growth Investing in brownfield expansion Improved earnings from Affinity under Ramsay management Investigating opportunities in Asia 20
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