for personal use only · 6/7/2012 · (share price appreciation plus reinvestment of dividends)...
TRANSCRIPT
Ramsay Health Care UBS Australian Healthcare Conference 2012
7 June 2012
Christopher Rex, Managing Director
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Australia’s largest private hospital operator & growing global
company
− 117 hospitals & facilities across three continents; circa 10,000 beds
− Over 30,000 staff: 22,000+ in Australia including 13,500 nursing staff, 650
doctors
− 143 accredited specialist medical training positions
− Approaching 3 million patient days per annum
− Extensive education and training, including Ramsay Training Institute,
Graduate Employment Programme and Future Leaders Programme
Market capitalisation approximately $4 billion
Enterprise value approximately $5 billion
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RAMSAY HEALTH CARE – OVERVIEW F
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OPERATING REVENUE
- Compound Annual Growth Rate (CAGR)
Es
tim
ate
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Operating Revenue CAGR, Operating Revenue
Financial Year ended 30 June
A$m
CAGR of 24.6%
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Revenue Growth
Achieved through
our consistent
focused strategy
of:
Organic growth
and
Brownfield
capacity
expansion
and
Acquisitions
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CORE EPS
- Compound Annual Growth Rate (CAGR)
0
20
40
60
80
100
120
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Cents per Share
Core EPS CAGR, Core EPS
Financial Year ended 30 June
5
CAGR of 16.4%
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DELIVERING STRONG SHAREHOLDER
RETURNS
Ramsay Total Shareholder Return (TSR) versus S&P/ASX 100 Accumulation Index (share price appreciation plus reinvestment of dividends)
Source: UBS
Compound Annual Growth Rate
(CAGR)
Ramsay Health Care TSR 22.6%
S&P/ASX 100 Acc. Index 7.1%
RHC Listed
on ASX
23 Sep’97
6
28-May-12
173%
28-May-12
1,893%
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RAMSAY HEALTH CARE
Share Price 1 July 11 to 18 May 12
7
S&P ASX100 Index 3749 3309 11.7%
15.7% Share Price $20.80
Share Price $17.97
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Management and culture
− Long term, stable management team, special culture (“The
Ramsay Way”)
− Ramsay can export proven management model and blend it with
local expertise
Strong growth strategy
− Ramsay’s growth strategy has remained clear and consistent
− Focused solely on private hospitals
Financially disciplined
− Growth only pursued if financial and strategic criteria and
investment hurdles are satisfied
OUR FORMULA FOR SUCESS
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RAMSAY HEALTH CARE IN 2012
Strong growth in our Australian business continues
Operating leverage continues to drive margin growth
Completed brownfield projects adding to EBIT & EPS
PHI membership continues to grow, with approximately
50,000 people joining in the Dec quarter
Means testing of the PHI rebate commences 1 July 2012
Private hospitals integral to healthcare system treating
41% of all patients (3.5m per annum)
State governments increasingly looking to involve the
private sector in service delivery for publicly funded
patients
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RAMSAY HEALTH CARE IN 2012 (cont)
Construction of new Public/Private hybrid Sunshine Coast
hospital commenced 1 Sept 2011
Continued growth in treating publicly funded patients in
UK - NHS patients now represent 65% our UK
admissions.
Ramsay Santé (France) is performing to expectations
under tough economic conditions
In 2012, Ramsay Health Care was selected in the “Global
100 Most Sustainable Companies in the world”. (One of
only 6 Australian companies)
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Demand for healthcare driven by:
Ageing population (first of boomers
turned 65 in 2010)
Increasing chronic disease burden:
− Coronary artery disease & heart failure
− Diabetes
− Obstructive pulmonary disease
Higher patient expectations
Increased capabilities
Longer life expectancy
AIHW Report 2010/2011 confirms the
trend
STRONG GLOBAL INDUSTRY
FUNDAMENTALS
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AN AGEING WORLD
8% 9%
11%
15%
22%
12%
15%
21%
27%
33%
6% 6%
8%
13%
20%
0%
5%
10%
15%
20%
25%
30%
35%
1950 1975 2009 2025 2050
Proportion of population aged 60 or over: World & Development Regions, 1950 - 2050
World
More Developed Regions
Less Developed Regions
Source: UN Department of Economic & Social Affairs
World Population Ageing 2009 13
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HOW HEALTH SPENDING RISES WITH AGE
Age-related spending is putting pressure on government budgets
and boosting national debt levels.
Source: US Bureau of Labor Statistics 14
Total healthcare spending per person, per annum ($)
Share of average annual expenditures (%)
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MARKET TRENDS IN HEALTHCARE
Growing & ageing population will continue to drive
demand for healthcare
Governments increasingly concerned about the rising
costs of healthcare, looking to private sector for solutions
Patients looking for & willing to pay for higher quality
healthcare
Increasing GDP and reducing public services, driving
growth for private operators
Significant growth in healthcare spend expected in
emerging markets
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SUCCESSFUL & SUSTAINABLE GROWTH
STRATEGY
Organic
• Underpinned by demographics, quality portfolio of hospitals, ongoing business improvement
Brownfields
• Unmet demand driving Ramsay’s ongoing investment in capacity expansion
Public/Private Collaborations
• Potential for more partnerships to develop/manage/ provide hospital services in changing political landscape
Acquisitions
• Exploring further acquisitions in existing and other markets
• Ramsay has proved it can export its management model
• Must add long-term value to shareholders
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CAPACITY TO FUND FUTURE GROWTH
5.1
2.7 2.7
3.7
3.3
2.4
1.9
1.7
1
2
3
4
5
6
FY05 FY06 FY07 FY08 FY09 FY10 FY11 Dec'11
Leverage = Net Debt ÷ EBITDA
Affinity Acquisition $1.4B
Capio UK Acquisition £193M
Ramsay Santé Acquisition €87M
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Strong operating cash flow has resulted in
a further reduction in leverage
New A$2 billion
equivalent underwritten
debt facility executed in
November 2011
Significant headroom
to finance growth
strategy
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BROWNFIELD DEVELOPMENTS AUSTRALIA
Proven track record of undertaking successful
brownfield expansion
Extensive program of hospital redevelopments &
expansions currently underway (>$800 million
approved since 2007)
Expect ongoing investment of approx. $100 million pa
Completed brownfield developments adding to
earnings at the EBIT & EPS level & on track to achieve
15% ROI
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PUBLIC/PRIVATE COLLABORATIONS
Joondalup Health Campus:
500 bed public/private hospital
expanding to 650 beds
Largest hospital in Perth’s Northern
corridor
Agreement with WA government
Treated public & private patients since 1996
In 2011 – 81,500 ED admissions; 18,500 operations; 2600
deliveries
$393m expansion on budget and ahead of schedule
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Sunshine Coast:
Public/Private hospital in partnership with Queensland Health
200 beds; 8 theatres; day centre; day chemo; ICU
Construction commenced 1 Sep 2011
Completion: Dec 2013
PUBLIC/PRIVATE COLLABORATIONS
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OUTLOOK
Rising demand for health care driving substantial
ongoing investment in brownfield projects
Completed brownfield projects adding to earnings at
EBIT and EPS level
Economic conditions in the UK and France remain
challenging but health care sector remains stable with
growth opportunities
Continuing to explore bolt-on acquisitions in the UK and
France
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