[PPT] - 1H 2019 Results Half year ended 31 December 2018 15 February 2019 PowerPoint Presentation

SLIDE 1

1H 2019 Results

Half year ended 31 December 2018

15 February 2019

SLIDE 2

Our Group

Design concept

SLIDE 3

Australia-wide coverage 2,541 Total sites

2,299 Pathology

2,191 ACCs 108 Laboratories

96 Medical Centres & Day Hospitals 146 Diagnostic Imaging

28 Hospitals 63Community Centres 55 Medical Centres

A market leading network

3 1H 2019 Results

75 Healius Medical Centres

61 with Dental sites 5 with Day Hospitals 4 with IVF clinics

13 Health & Co 8 Montserrat Day Hospitals

v

*as at January 2019

19 Total Sites 61 Total Sites 212 Total Sites

26

26 Total Sites 680 Total Sites

625 21 34

660 Total Sites

606 19 35

851 Total Sites ACT 32 Total Sites

27 2 3 19 197 11 4 49 7 5 750 36 65

SLIDE 4

Healius

New Purpose, Mission and Values
Underpinned by a new brand and name: ‘Healius’

Vision

Substantial shift in value proposition
Become Workplace of Choice in frontline healthcare
Deliver care when, where and how consumers need it
Maximise value of data analytics in delivering company strategy

Clear and comprehensive strategy1

Repositioning the model in Medical Centres
Leading-edge infrastructure platforms inc. Pathology and

Imaging

Modernisation of corporate support functions
Developing Dental, IVF, Day Hospitals
Successful capital raise enabling momentum in programs
Investing ahead of returns. Full realisation of benefits takes time
Expected to deliver material operational, clinical and financial

improvements

4 1H 2019 Results

Our vision

OUR MISSION We share a mission to seek and sustain life-enhancing healthcare delivered by people who care. OUR VALUES OUR PURPOSE We are inspired to care for your health and wellbeing at every stage of life.

1 Refer slide 27 for initiatives across the group

SLIDE 5

Key achievements in 1H 2019

Medical Centres EBIT up nearly 50% on 2H 2018 lows  48% increase in GPs recruits  Gross billing up (average $234/ph in January)  Appointment roll-out to 39 MD3 /7 MedTech centres. All moving to single PMS  Property expansion in Maroubra with 15 to complete 2H 2019 Imaging EBIT up 13% on pcp  Winning the imaging services contract for ADF Health Services, as partner to BUPA  Successful Northern Beaches Hospital (NBH) opening with new fully-licenced MRI  iCAR roll-out: 30 live sites, 50% radiologists trained, $11m in annualised benefits identified

5 1H 2019 Results Concept design Siemens MRI, NBH

SLIDE 6

A transformation-in-progress

6 1H 2019 Results

However, near-term results not reflective of the future

Soft market conditions in all divisions in 1H 2019
Cleared the decks on known legacy matters, addressed Dorevitch / Medical

Centres award pay

Medical Centres not yet delivering future state

2H 2019 increase in contribution

Strong GP recruitment with 32 GPs / 22 FTEs in January, good pipeline
Market conditions expected to improve throughout remainder of 2H 2019 and to

normalise to long-term averages

2H 2019 $10m EBIT benefit of productivity programs in Pathology and Imaging

Concept design

SLIDE 7

Group results

Underlying EBIT:
Double-digit growth in Imaging and a good performance in Medical Centres partially offset the decline in Pathology with well-documented

headwinds

Medical Centres up 50% from 2H 2018 lows
Soft market conditions across all 3 divisions. Expected to improve throughout remainder of 2H 2019 and to normalise to long-term averages
Includes ~$8 million of investment in greenfield sites3
Reported EBIT reflects $21.7m of investment in strategic initiatives (Leapfrog, LIS, iCAR, corporate refresh) and set-up costs inc. Montserrat
Adoption of AASB 15 for upfront HCP payments = $20m reduction in revenue/EBITDA but nil EBIT/NPAT impact5
Interim fully franked dividend of 3.8 cents per share, 60% of UNPAT

7 1H 2019 Results

1 All comments relate to underlying results unless noted 2 Reported EBIT reconciliation – slide 8 3 Business as Usual reconciliation – slide 31 5 AASB 15 adjustment –slides 32 & 33

Group $m 1H 2019 1H 2018 1H 2019 1H 2018 Revenue 870.6 832.7 871.6 832.7 EBIT 73.1 81.3 51.4 61.6 NPAT 39.4 44.0 20.7 22.1 Underlying

1

Reported

2

SLIDE 8

Underlying results

Strategic initiatives:
Leapfrog $5.2m - 3 year program
Pathology IT $3.6m - 5 year program
Imaging IT $2.1m - 3 year program
Corporate renewal $4.3m - 3 year program
Balance relates to business set-up, primarily Montserrat, and redundancies

8 1H 2019 Results

1H 2019 $m Reported Restructuring & strategic initiatives Non-recurring items Underlying EBIT 51.4 21.7 0.0 73.1 Finance costs (16.8) (16.8) PBT 34.6 56.3 Income Tax (13.9) (16.9) NPAT 20.7 39.4 1H 2018 $m Reported Restructuring & strategic initiatives Non-recurring items Underlying EBIT 61.6 17.7 2.0 81.3 Finance costs (18.5) (18.5) PBT 43.1 62.8 Income Tax (21.0) (18.8) NPAT 22.1 44.0

“In terms of the strategic initiatives, we have several major projects

underway. While spanning more

than a year, they are transformational in nature and unlikely to be undertaken again at such a collective magnitude.”

Rob Hubbard, AGM 2018

SLIDE 9

Free cash flow

OCF of $55.6m (1H 2018 $105.2m). EBITDA decline, plus:
$14m back pay for the Medical Centres modern awards adjustment and Dorevitch pay
determination. Both fully provided in FY18
$14m tax movement relating to $4m payment for FY18 tax v $10m refund for FY17 tax
Maintenance capex $30m delivering $26m FCF
Growth capex $115m - partly funded by the capital raise - includes:
$67m Montserrat Day Hospitals acquisition
$20m new clinics in Healius Medical Centres and Health & Co
$7m investment in Imaging sites1 and iCAR
$4m Leapfrog property initiatives

9 1H 2019 Results 56 26 92 (15) (21) (30) 50 100 Gross OCF Interest Tax OCF Maintenance capex Free cash flow $m

92

1 Northern Beaches Hospital & Highfields in NSW, St Vincent’s Private Hospital Northside in QLD

Westside Private Hospital

SLIDE 10

Net debt

Significant improvement in leverage since FY 2015 from capital recycling program, free

cash flow generation and capital raise in 2H 2018

Cash usage at near-term peak including Montserrat and investment in strategic initiatives.

Spend is gated and monitored. Will deliver future operating cash flow

Continual balance of competing demands: dividends, investment in strategic initiatives and
ptimal gearing

10 1H 2019 Results

Reported As at $m 31 Dec 2018 30 June 2018 Total debt 757.5 860.8 Cash (105.1) (84.0) Net debt 652.4 776.8 Bank gearing ratio (covenant <3.5x)1 2.4x 2.7x Bank interest ratio (covenant >3.0x) 9.2x 9.0x Gearing (net debt: net debt + equity) 24.1% 29.9%

1,098 821 771 652 550 650 750 850 950 1,050 1,150

Net debt reduction

1H16 1H17 1H18 1H19

1 Bank gearing ratio is calculated based on underlying EBITDA before the impact of AASB 15

SLIDE 11

Divisional Results and Strategies

SLIDE 12

Pathology - results

Revenue:
Soft volume growth (2.1% overall) due to external factors inc. benign flu season. Expected to improve throughout remainder of 2H and to

normalise to long-term averages of 4-5%

Good fee growth and strong increases in specialties such as genetics, where NIPT revenue up 32% (EBIT 46%)
EBIT:
Loss of bowel screening contract (FOBT), to cycle out in 2H
Dorevitch labour cost increase, with mitigation in 2H
Normalised for these two events, EBIT growth above revenue growth
Consumables savings despite growth in high-value tests (NIPT and HPV testing)
Continued good cash flow, increased investment in growth capex
2H 2019: productivity programs to mitigate Dorevitch impact and deliver improvements with $20m+ annual benefit targeted ($7.5m+ in

2H 2019)

12 1H 2019 Results

Underlying 1H 2019 $m 1H 2018 $m Better/ (worse) % Revenue 551.5 534.0 3.3 EBITDA 59.0 67.0 (11.9) Depreciation (10.0) (9.7) (3.1) Amortisation (3.8) (4.4) 13.6 EBIT 45.2 52.9 (14.6) Total capital expenditure 16.7 7.9 n.a.

SLIDE 13

13 1H 2019 Results

Pathology - strategy

Optimise portfolio of ACCs and laboratories – closure of ACCs during the period
SWA contracts signed = upgrade in testing capabilities
Core LIS platform development. Final stages of negotiation

LIS expected net benefit of ~$20 million p.a. once embedded in the business through automation, standardisation and FTE efficiency Material revenue uplift opportunity Efficiencies through standardisation of work flows and no duplication between states Improve testing capabilities of core instrumentation and reduce costs Better consumer experience with digital results reducing consultation turn-around times Brand and reputation - attract and retain best pathologists Deliver greater pre-analytical accuracy Increase share in higher margin and faster growing advanced genomics, complex and personalised testing Referrer / clinical benefits Operational benefits Financial benefits

LIS / SWA benefits

SLIDE 14

Medical Centres - overview

14 1H 2019 Results

1 FTEs based on 40-hour week, 47-week year

Underlying EBIT 1H 2019 2H 2018 1H 2018 Healius Medical Centres 17.0 13.8 22.0 Health & Co 0.9 (1.7) (2.5) Medical Centres 17.9 12.1 19.5 Medical Centres BaU 24.7 20.2 24.4

96 sites nation-wide

75 Healius Medical Centres

61 with Dental sites 5 with Day Hospitals 4 with IVF clinics

13 Health & Co 8 Montserrat Day Hospitals

1,193 GP partners

=1,017 FTEs1

153 Dentists

=130 FTEs1

11 IVF specialists

pipeline of new specialists joining
new Clinical Director starting Feb 2019

Range of specialists

operating out of our medical centres

and day hospitals

Unrivalled footprint of large scale centres Unprecedented patient flow opportunities

EBIT contribution grew nearly 50% compared to 2H 2018:
Early signs of a turnaround in Healius Medical Centres
Health & Co improvement
Carrying $7m in greenfield centres:
BAU EBIT growth on 1H 2018 and 2H 2018

SLIDE 15

Medical Centres - results

15 1H 2019 Results

1 Revenue and EBITDA shown after $18.0m impact of AASB 15 “Revenue from Contracts with Customers”. Nil impact on EBIT (refer slide 33) 2 Excludes $67.3m Montserrat acquisition 3 Refer slide 35 & 36 for GP statistics

Results not representative of future with investments ahead of returns. Expected growth FY 2020 onwards. Target ~$1m EBIT/centre
Healius Medical Centres GPs3
Recruitment: 99 GPs (82 BaU, 17 M&A) = 48% growth over 1H 2018
Departures higher than expected Q1 (large number of retirees),

stabilised Q2

Strong pipeline for 2H 2019 including 32 GPs/ 22 FTEs recruited in Jan
Substantial reduction in HCP capex: 50% of old levels
Nearing end of contract transitions with <20% of GPs on the old

5-year contracts.

Underlying 1H 2019 $m 1H 2018 $m Better/ (worse) % Revenue

1

149.6 140.9 6.2 EBITDA

1

29.6 30.7 (3.6) Depreciation (9.9) (8.7) (13.8) Amortisation (1.8) (2.5) 28.0 EBIT 17.9 19.5 (8.2) HCP capital expenditure 15.5 16.1 3.7 Total capital expenditure

2

46.0 38.0 (21.1)

Health & Co
First profit of $0.9m on $8.8m revenue
Recruitment: 29 GPs (24 M&A, 5 recruits) = 127 GPs, 92 FTEs

with 98% retention

Growing network with $14.8m invested in M&A

SLIDE 16

Dental

Dental in 61 Medical Centres
Strong recruitment with 153 Dentists, 130 FTEs
Revenue up 5.4% to $17.5m. EBIT up 14.8% to $3.1m

IVF

Investment in disruptive business model with great potential
Perth centre opened at Craigie WA
Move to new Greensborough facility in Melbourne, lifting capacity
Cycles up 14%, revenue up 18% to $6.6m
Ramp-up costs resulted in small EBIT loss
Importantly $1.5m EBIT on whole-of-business BAU basis

Other business

$7.9m revenue from skins, allied health and specialists.
$33.5m non-medical revenue

16 1H 2019 Results

Emerging businesses

Wayfinding concept

SLIDE 17

17 1H 2019 Results

Day Hospitals

4.2 5.4 6.6 3.4 3.9 4.4 3 5 7 2007 2012 2017 Same‐day separations Overnight separations (millions) 11% 6% 4% 3% 4% 73%

Competitor 1 Competitor 2 Competitor 3 Competitor 4 Healius

Higher growth in same-day separations Competitive landscape2

Source: Company websites, AIHW

2 Based on number of day hospitals in Australia

Source: Australian Institute of Health and Welfare ('AIHW')

Day hospital business well positioned for future growth and further investment – Shift to day procedures: US seeing ASCs1 grow to over 5,000. Cancer, cardio and ortho projected to grow strongly – In Australia similar cost drivers and technology innovation – Highly fragmented sector with further acquisition / consolidation opportunities



High quality business run by a strong and experienced management team – Modern facilities, strategically located and easily accessible to specialists and patients – Retention of key management personnel



Complementary business for Healius – Platform for growth and improved performance in Healius’ 5 Day Hospitals with $4-5m annual turnaround targeted – Opportunities to integrate with Healius' IVF business and deliver pathology volumes – Existing relationships with a number of HCPs operating in the business



Diversifies Healius' sources of funding – Platform to grow non-Medicare revenues



Healius Day Hospitals

$6.3m revenue, small EBIT loss largely due to greenfield investment
IVF volumes supporting Sydney, Melbourne & Perth Day Hospitals

Montserrat acquisition

2 months of trading in line, 2 centres opened and exceeding budgets
Initial payment of $67m

Montserrat Acquisition Rationale

1 ASCs = Ambulatory Surgical Centers performing same-day outpatient surgical care

SLIDE 18

People

Strong FTEs pipeline 2H 2019:
22 FTEs recruited in Jan (32 GPs)
50+ with contracts signed and 10+ terms agreed
All sites scheduled for Leapfrog renewal included in pipeline

Process

Roll-out of appointments to all 39 MD3 sites
7 centres moved from Medtech PMS, offering appointments
Trialling e-recalls and self-check in kiosks. New online service for

‘remote walk in’ appointments moved to pilot

Consistent increase in gross billings per hour. January at $234 p/h

18 1H 2019 Results PEOPLE PROCESS PROPERTY Attract the best healthcare professionals Increase operational efficiency Optimise space utilisation Become Workplace

f Choice

Improve the patient experience Introduce new services Uplift facilities

Medical Centres – strategy

Comprehensive renewal of the operating model under Leapfrog

Property

Property uplift and expansion at Maroubra
2 further dental sites expanded with double-digit growth in billings
Overall 19 centres to commence and 15 to complete 2H 2019

SLIDE 19

Imaging - results

Winning of ADF Health Services contract for imaging services, as partner to BUPA. Due to commence July 2019
Revenue up 8.7% and EBIT up 12.8% supported by new sites, continued strength in MRI and CT
Soft underlying market conditions. Expected to improve throughout remainder of 2H and to normalise to long-term averages of 6-7%
NBH experienced good volumes since opening. New fully-licenced MRI. Outpatient referral opportunities
Opening of Highfields, Port Macquarie, with fully-licenced MRI and PET/CT, and redevelopment of St Vincent’s Private Hospital Northside
EBITDA impacted by new and replacement equipment operating leases. Normalised EBITDA up ~6% (~8% before AASB 15 adjustment)
Capex includes NBH, Highfields at Port Macquarie, St Vincent’s Private Hospital Northside expansion and iCAR
2H 2019: productivity programs to deliver improvements with $10m+ annual benefit targeted ($2.5m+ in 2H 2019)

19 1H 2019 Results

1 Revenue and EBITDA shown after $2.1m impact of AASB 15 “Revenue from Contracts with Customers”. Nil impact on EBIT (refer slide 33)

Underlying 1H 2019 $m 1H 2018 $m Better/ (worse) % Revenue

1

192.0 176.6 8.7 EBITDA

1

26.4 26.0 1.5 Depreciation (6.7) (7.0) 4.3 Amortisation (1.2) (2.6) 53.8 EBIT 18.5 16.4 12.8 HCP capital expenditure 0.1 1.5 93.3 Total capital expenditure 11.4 10.4 (9.6)

SLIDE 20

Rebrand of the division as it continues on its transformative pathway
Revitalisation of community sites with focus on consumer value proposition
Strengthened senior operational capabilities. Focus on labour and operating cost
ptimisation through standardising best-practice models
iCAR investment:
technology replacement and innovation across radiologist workflow, voice recognition,

referrer delivery channel and enhanced imaging

30 sites live
~50% of radiologists trained
~$11m annualised benefits from operational savings and increased referrer revenue

20 1H 2019 Results

Imaging - strategies

SLIDE 21

Corporate

1H 2019 increased group IT investment and insurance premiums
Modernisation of support functions to deliver best-in-class services in

IT, Finance, Property and HR including:

Outsourcing property maintenance and lease management
Centralised and automated purchasing system
Improving central IT platforms
Programs to deliver cost savings, efficiencies and risk mitigation

21 1H 2019 Results PEOPLE PROCESS PROPERTY Purpose, Mission & Values Modernisation of corporate support services infrastructure Facilities management & leasing outsourcing Performance management framework Property cost

ptimisation

program Brand

Underlying 1H 2019 $m 1H 2018 $m Better/ (worse) % EBITDA (6.2) (5.5) (12.7) Depreciation (1.5) (1.3) (15.4) Amortisation (0.8) (0.7) (14.3) EBIT (8.5) (7.5) (13.3)

SLIDE 22

Underlying NPAT for FY 2019 expected to be between $93m and $98m

1H 2019 result below normal run-rate with soft market conditions, in part

due to benign Winter flu season

Modest recovery evidenced in October and November but inconsistent

thereafter

Expected to improve throughout remainder of 2H 2019 and to normalise to

long-term averages

Trends in population growth and ageing, advancements in health

technology and cancer survival rates, and rising patient expectations support long-term market growth

$10m EBIT uplift targeted in 2H 2019 from productivity programs in

Pathology and Imaging

FY 2019 Forecast

22 1H 2019 Results

SLIDE 23

Appendices Healius group

SLIDE 24

2nd largest national pathology provider; market leader in QLD, VIC & WA
1 in 3 pathology samples tested
~250 specialist pathologists, ~2,300 lab team of scientists and

phlebotomists, ~3,800 collectors, ~800 couriers, ~900 support staff

$1bn+ in revenue p/a (1H 2019: $552m)
Investing in niche specialties: Kossard Dermatopathology, Genomic

Diagnostics, histology and Veterinary pathology.

Disciplined approach to ACC portfolio

24 1H 2019 Results PEOPLE PROCESS PROPERTY Attract the best healthcare professionals Optimisation in pre- analytical process ACC network

ptimisation

Improve referrer experience Technology upgrade via SWA Speciality services expansion Strong focus on staff engagement Improved consumer experience Laboratory uplifts ACC enhancements

Pathology

No. 1 or 2 in each state

SLIDE 25

25 1H 2019 Results DENTAL IVF DAY HOSPITALS 4th largest dental

perator in Australia

Australia’s first Medicare bulk billed clinic 13 day hospitals including 8 in Montserrat acquisition 61 centres with targeted expansion 4 clinics with

pening of WA in

2018 Locations in NSW, QLD, VIC and WA 130 Dentist FTEs Trend of increasing procedures being conducted in Day Hospitals

Medical Centres

No. 1 national provider of large-scale medical centres

Healius Medical Centres

Multidisciplinary teams of GPs, allied health practitioners and specialists address both acute and chronic

conditions

Focused on quality and value for patients and preventing hospitalisations
Open 365 days/year, 7am to 10pm
Affordable with Medicare services bulk-billed
46 centres now offering appointments capability, while maintaining walk-in appointments – roll out continuing
Non-Medicare services competitively priced
$300m+ in revenue p/a (1H 2019: $150m)
~8 million patient consults p/a
~1,500 independent GPs / dentists / specialists / allied health

~ 420 nurses, ~1,600 support staff Health & Co

Network of 13 established clinics across NSW, VIC, QLD & SA
127 GPs, with almost 100% retention
Non-Medicare revenue

SLIDE 26

26 1H 2019 Results

Diagnostic Imaging

No. 3 national imaging provider
Network of 146 imaging sites:
28 hospitals
63 community centres
55 medical centres
$350m+ in revenue p.a. (1H19: $192m)
3 million examinations annually
Full suite of modalities including X-ray, MRI, PET, CT and ultrasound

PEOPLE PROCESS PROPERTY Staff engagement Operational efficiency Uplift to community & medical centre sites Brand enhancements Improved referral delivery channels Development of high-end sites Improved radiologist experience Patient experience improvements Optimise hospitals

SLIDE 27

Initiatives across the group

27 1H 2019 Results

PEOPLE workplace of choice PROCESS

rganisational efficiency

PROPERTY yield optimisation

 Staff engagement  LIS1/SWA2 delivering improved referrer experience and enhanced brand



Quality reset = right culture



Attract HCP4s with simplified contracts, career pathways, skills development, appointment model, new team



New streams via young professionals, Barefoot GPs, roll-in M&As



Improving nursing and support staff



Staff engagement



iCAR3 delivering improved radiologist experience and enhanced brand



LIS1 delivering efficiencies and improved patient experience



Optimisation of pre-analytical processes



Technology upgrade to SWA2



Re-engineering clinic and corporate support workflows



Improved integration to reduce leakage



Modernise HCP4 billing practices



Better consumer experience: online access via websites and apps, e-recalls, continuity of care



Labour and operating model optimisation in dispersed community network



iCAR3 delivering efficiencies and improved patient experience



ACC5 network optimisation



Laboratory optimisation and uplifts



Specialty service expansion



ACC enhancement in Medical Centres



Modernise, improve and extend 52 Healius Medical Centres



Expansion of service offerings including urgent care and treatment rooms



Revitalisation of community sites



Optimisation of hospitals inc. NBH6



Development of high-end sites



Upgrade within Medical Centres

Pathology Medical Centres Imaging

 Purpose, Mission and Values  Performance management framework



Modernisation of corporate support services infrastructure



Outsourced facilities management / leasing



Property cost optimisation program

GROUP

3 Imaging Core Application Refresh 4 Healthcare Professionals 1 Laboratory Information System 2 Serum Work Area 5 Approved Collection Centres 6 Northern Beaches Hospital

SLIDE 28

Industry trends

based on latest MBS data available from October 2018

28 1H 2019 Results

2%

0% 2% 4% 6% 8% 10% 12% Oct 13 Apr 14 Oct 14 Apr 15 Oct 15 Apr 16 Oct 16 Apr 17 Oct 17 Apr 18 Oct 18

Pathology: Market Services & Benefits

Services (12m rolling) Benefits (12m rolling) 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% Oct 13 Apr 14 Oct 14 Apr 15 Oct 15 Apr 16 Oct 16 Apr 17 Oct 17 Apr 18 Oct 18

Diagnostic Imaging: Market Services & Benefits

Services (12m rolling) Benefits (12m rolling) 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% Oct 13 Apr 14 Oct 14 Apr 15 Oct 15 Apr 16 Oct 16 Apr 17 Oct 17 Apr 18 Oct 18

Specialist: Market Services & Benefits

Services (12m rolling) Benefits (12m rolling) 0% 1% 2% 3% 4% 5% 6% 7% 8% Oct 13 Apr 14 Oct 14 Apr 15 Oct 15 Apr 16 Oct 16 Apr 17 Oct 17 Apr 18 Oct 18

GPs: Market Services & Benefits*

Services (12m rolling) Benefits (12m rolling)

* Broad type of service (BTOS): unreferred GP attendances

5 year growth rate of 4.1% 5 year growth rate of 6.2% 5 year growth rate of 5.5% 5 year growth rate of 4.5%

SLIDE 29

Appendices Reconciliations

SLIDE 30

Divisional reconciliation

Underlying EBIT

30 1H 2019 Results

1H 2019 $m Pathology Medical Centres

1

Imaging Corporate Group

2

Revenue 551.5 149.6 192.0 0.0 870.6 EBITDA 59.0 29.6 26.4 (6.2) 108.8 Depreciation (10.0) (9.9) (6.7) (1.5) (28.1) Amortisation (3.8) (1.8) (1.2) (0.8) (7.6) EBIT 45.2 17.9 18.5 (8.5) 73.1 1H 2018 $m Pathology Medical Centres

1

Imaging Corporate Group

2

Revenue 534.0 140.9 176.6 0.0 832.7 EBITDA 67.0 30.7 26.0 (5.5) 118.2 Depreciation (9.7) (8.7) (7.0) (1.3) (26.7) Amortisation (4.4) (2.5) (2.6) (0.7) (10.2) EBIT 52.9 19.5 16.4 (7.5) 81.3

1 Medical Centres includes Healius Medical Centres, Health & Co and Montserrat 2 $22.5m of inter-company revenue/expenses have been eliminated at the Group level (1H 2018 $18.8m)

SLIDE 31

EBIT BAU

1H 2019 underlying EBIT carries $7.7m of investment in the new sites which are still in ramp-up1
Health & Co now profit making and no longer included

31 1H 2019 Results

Underlying 1H 2019 $m 1H 2018 $m Better/ (worse) % EBIT 73.1 81.3 (10.1) New centres 7.7 5.8 EBIT Business as Usual 80.8 87.1 (7.2)

1 3-year ramp-up is assumed for greenfield sites, excludes brownfields and Imaging hospital contract 2 Kawana not included in BAU adjustment

FY 2018 openings FY 2017 openings FY 2016 openings Healius Medical Centres Craigieburn, Greensborough, Narellan, Robina (opened 7/18) Healius Medical Centres Corrimal Healius Medical Centres

IVF

Perth IVF & Day Surgery IVF Brisbane IVF IVF

Imaging

Kawana 2 Imaging River City Imaging Varsity Lakes

SLIDE 32

Accounting change AASB 15

32 1H 2019 Results

Healius has adopted AASB 15 effective from 1 July 2018
AASB 15 establishes a single model for entities to use in accounting for revenue from contracts with customers.
Under AASB 15 consideration payable to a customer is accounted for as a reduction to the transaction price
Previously upfront payments made to healthcare professionals on entering into contractual relationships were accounted for as intangible

assets and amortised over the term of the relevant contract

Under AASB 15, upfront payments made to healthcare professionals are recognised as contract assets and as a reduction to revenue over

the term of the relevant contract

The financial impacts of the changes are set out on slide 33. They result in a reduction in revenue and EBITDA but nil EBIT impact
Financials in this presentation reflect AASB 15 except for “GP Key Drivers” for comparability with historic figures – refer slides 38 and 39

SLIDE 33

Accounting change AASB 15

Group reconciliation

33 1H 2019 Results

1H 2019 AASB 15 Impact, $m Pathology Medical Centres

1

Imaging Corporate Group

2

Pre AASB 15 Revenue 551.5 167.6 194.1 0.0 890.7 Pre AASB 15 EBITDA 59.0 47.6 28.5 (6.2) 128.9 Amortisation Reclass 0.0 (18.0) (2.1) 0.0 (20.1) Post AASB 15 Revenue 551.5 149.6 192.0 0.0 870.6 Post AASB 15 EBITDA 59.0 29.6 26.4 (6.2) 108.8 1H 2018 AASB 15 Impact, $m Pathology Medical Centres

1

Imaging Corporate Group

2

Pre AASB 15 Revenue 534.0 162.0 179.3 0.0 856.5 Pre AASB 15 EBITDA 67.0 51.8 28.7 (5.5) 142.0 Amortisation Reclass 0.0 (21.1) (2.7) 0.0 (23.8) Post AASB 15 Revenue 534.0 140.9 176.6 0.0 832.7 Post AASB 15 EBITDA 67.0 30.7 26.0 (5.5) 118.2

1 Medical Centres includes amortisation reclassification for GPs $16.3m and other $1.7m 2 $22.5m of inter-company revenue/expenses have been eliminated at the Group level (1H 2018 $18.8m)

SLIDE 34

Appendices Medical Centres

Additional Information

SLIDE 35

35 1H 2019 Results

Numbers

Record 99 GPs recruited, 48% up on pcp. 82 BaU, 17 M&A
Average age of starters ~50, lowering average of whole cohort ~54
Leavers higher than planned in Q1, now stabilised. 24% due to HLS initiatives with normalised retention at ~90%

Capex

$15.5m pre-tax BaU ($10.9m after-tax including $4.4m upfronts for new GPs (24%), $4.2m upfronts for re-signs (24%))
$4.7m pre-tax M&A investment

Healius Medical Centres GPs

Recruitment

5 10 15 20 25 30 35 40 (90) (40) 10 60 110

1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 GP capex ($m) # of GPs

Joiners (LHS axis) Leavers (LHS axis) HLS initiatives After-tax capex (RHS axis)-1

HLS initiatives essential for future growth

SLIDE 36

Healius Medical Centres GPs

Key Drivers1

Headcount up but FTEs down. FTE calculation based on contracted hours with GPs consistently working more than contracted hours
Average share of revenue decline slowed. <20% of GPs still on old 5-year contracts
GP capex varies depending on preferences for an upfront / percentage only. (1H19: more new GPs but less re-signs opting for upfronts)

36 1H 2019 Results

GPs 1H 2019 2H 2018 1H 2018 1H 2017 1H 2016 Headcount 1,066 1,056 1,055 979 955 FTEs

2

925 945 958 922 923 Gross billings ($m) 208.9 212.9 212.2 206.5 207.5 Share of revenue (%) 38.3% 39.4% 41.3% 44.9% 47.3% Revenue ($m)

3

80.0 83.8 87.7 92.7 98.0 GP capital expenditure 15.5 9.6 15.3 15.9 33.6

1 All figures shown before impact of AASB 15 “Revenue from Contracts with Customers” on GP revenue (refer slide 37) 2 FTEs based on 40-hour week, 47-week year 3 Revenue includes revenue earned by registrars who are employed rather than under contract and not included in GP numbers. (1H19 41 registrars)

SLIDE 37

Healius Medical Centres GPs

Impact of AASB 15 “Revenue from Contracts with Customers” on GP revenue

37 1H 2019 Results

AASB 15 Impact, $m 1H 2019 2H 2018 1H 2018 1H 2017 1H 2016 Pre AASB 15 Revenue 80.0 83.8 87.7 92.7 98.0 Amortisation Reclass (16.3) (17.9) (19.6) (24.2) (23.3) Post AASB 15 Revenue 63.7 65.9 68.1 68.4 74.7

SLIDE 38

Healius Medical Centres HCPs

Tax Implications of HCP acquisitions

$m 1H 2019 2H 2019 2020 Additional Accounting Tax Expense 2.8 2.2 2.1 Healthcare Professionals contracted on or after 1 July 2015

Deferred tax liability (DTL) to be recognised at the time of the acquisition of healthcare practices and capitalisation of contractual relationship

intangible assets.

Equal movement in DTL will ensure an effective tax rate of 30%.

Healthcare Professionals contracted prior to 30 June 2015:

No DTL has been recognised regarding the acquisition of healthcare practices and capitalisation of contractual relationship intangible assets

to-date.

Therefore there is a non-deductible (permanent) difference which will increase the notional effective tax rate above 30%. This will

progressively decrease as the associated amortisation expense is recognised and runs off.

The additional accounting tax expense is as follows:

38 1H 2019 Results

SLIDE 39

This presentation has been prepared by Healius Limited (ACN 064 530 516) (‘HLS’). Material in this presentation provides general background information about HLS which is current as at the date this presentation is made. Information in this presentation remains subject to change without notice. Circumstances may change and the contents of this presentation may become outdated as a result. The information in this presentation is a summary only and does not constitute financial advice. It is not intended to be relied upon as advice to investors or potential investors and has been prepared without taking account of any person’s investment objectives, financial situation or particular needs. This presentation is based on information made available to HLS. No representation or warranty, express or implied, is made in relation to the accuracy, reliability or completeness of the information contained herein and nothing in this presentation should be relied upon as a promise, representation, warranty or guarantee, whether as to the past or future. To the maximum extent permitted by law, none of HLS or its directors,

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39 1H 2019 Results

Disclaimer

SLIDE 40