Virtus He a lth (ASX:VRT )
F I NANCI AL RE SUL T S PRE SE NT AT I ON H1F Y18
T ue sd a y 20th F e b rua ry, 2018 9.15a m AE DT
F I NANCI AL RE SUL T S PRE SE NT AT I ON H1F Y18 ue sd - - PowerPoint PPT Presentation
Virtus He a lth (ASX:VRT ) F I NANCI AL RE SUL T S PRE SE NT AT I ON H1F Y18 ue sd a y 20 th F T e b rua ry, 2018 9.15a m AE DT DI SCL AI ME R T he ma te ria l in this pre se nta tio n ha s b e e n pre pa re d b y Virtus He
T ue sd a y 20th F e b rua ry, 2018 9.15a m AE DT
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T he ma te ria l in this pre se nta tio n ha s b e e n pre pa re d b y Virtus He a lth L imite d ABN 80 129 643 492 (“Virtus He a lth”) a nd is g e ne ra l b a c kg ro und info rma tio n a b o ut Virtus He a lth’ s a c tivitie s c urre nt a t the da te o f this pre se nta tio n. T he info rma tio n is g ive n in summa ry fo rm a nd inc lude s fina nc ia l a nd o the r info rma tio n a nd do e s no t purpo rt to b e c o mple te . Info rma tio n in this pre se nta tio n, inc luding fo re c a st fina nc ia l info rma tio n sho uld no t b e c o nside re d a s a dvic e o r a re c o mme nda tio n to inve sto rs o r po te ntia l inve sto rs a nd do e s no t ta ke into a c c o unt inve stme nt o b je c tive s, fina nc ia l situa tio n o r ne e ds o f a ny pa rtic ula r inve sto r. T he se sho uld b e c o nside re d, with o r witho ut pro fe ssio na l a dvic e whe n de c iding if a n inve stme nt is a ppro pria te . Pe rso ns ne e ding a dvic e sho uld c o nsult the ir sto c kb ro ke r, so lic ito r, a c c o unta nt o r o the r inde pe nde nt fina nc ia l a dviso r. T he re le a se , pub lic a tio n o r distrib utio n o f this pre se nta tio n in c e rta in jurisdic tio ns ma y b e re stric te d b y la w a nd the re fo re pe rso ns in suc h jurisdic tio ns into whic h this pre se nta tio n is re le a se d, pub lishe d o r distrib ute d sho uld info rm the mse lve s a b o ut a nd o b se rve suc h re stric tio ns. T his pre se nta tio n do e s no t c o nstitute , o r fo rm pa rt o f, a n o ffe r to se ll o r the so lic ita tio n o f a n o ffe r to sub sc rib e fo r o r b uy a ny se c uritie s, no r the so lic ita tio n o f a ny vo te o r a ppro va l in a ny jurisdic tio n, no r sha ll the re b e a ny sa le , issue o r tra nsfe r o f the se c uritie s re fe rre d to in this pre se nta tio n in a ny jurisdic tio n in c o ntra ve ntio n o f a pplic a b le la w. Ce rta in sta te me nts ma de in this pre se nta tio n a re fo rwa rd-lo o king sta te me nts. T he se fo rwa rd- lo o king sta te me nts a re no t histo ric a l fa c ts b ut ra the r a re b a se d o n Virtus He a lth L imite d’ s c urre nt e xpe c ta tio ns, e stima te s a nd pro je c tio ns a b o ut the industry in whic h Virtus He a lth o pe ra te s, a nd b e lie fs a nd a ssumptio ns. Wo rds suc h a s “a ntic ipa te s”, “e xpe c ts”, “inte nds,”, “pla ns”, “b e lie ve s”, “se e ks”, “e stima te s”, a nd simila r e xpre ssio ns a re inte nde d to ide ntify fo rwa rd-lo o king sta te me nts. T he se sta te me nts a re no t g ua ra nte e s o f future pe rfo rma nc e a nd a re sub je c t to kno wn a nd unkno wn risks, unc e rta intie s a nd o the r fa c to rs, so me o f whic h a re b e yo nd the c o ntro l o f Virtus He a lth, a re diffic ult to pre dic t a nd c o uld c a use a c tua l re sults to diffe r ma te ria lly fro m tho se e xpre sse d o r fo re c a ste d in the fo rwa rd-lo o king sta te me nts. Virtus He a lth c a utio ns inve sto rs a nd po te ntia l inve sto rs no t to pla c e undue re lia nc e o n the se fo rwa rd-lo o king sta te me nts, whic h re fle c t the vie w o f Virtus He a lth o nly a s o f the da te o f this pre se nta tio n. T he fo rwa rd-lo o king sta te me nts ma de in this pre se nta tio n re la te o nly to e ve nts a s o f the da te o n whic h the sta te me nts a re ma de . Virtus He a lth will no t unde rta ke a ny o b lig a tio n to re le a se pub lic ly a ny re visio ns o r upda te s to the se fo rwa rd-lo o king sta te me nts to re fle c t e ve nts, c irc umsta nc e s o r una ntic ipa te d e ve nts o c c urring a fte r the da te o f this pre se nta tio n e xc e pt a s re q uire d b y la w o r b y a ny a ppro pria te re g ula to ry a utho rity. A numb e r o f fig ure s, a mo unts, pe rc e nta g e s, e stima te s, c a lc ula tio ns o f va lue a nd fra c tio ns in this pre se nta tio n a re sub je c t to the e ffe c t o f ro unding . Ac c o rding ly, the a c tua l c a lc ula tio n o f the se fig ure s ma y diffe r fro m the fig ure s se t o ut in this pre se nta tio n. In a dditio n, a numb e r o f fig ure s ha ve b e e n c a lc ula te d o n the b a sis o f a ssume d e xc ha ng e ra te s, a s se t o ut in this pre se nta tio n. T
c o ntra c to rs, a dvise rs no r a ny o the r pe rso n, a c c e pts, a nd e a c h e xpre ssly disc la ims, a ny lia b ility, inc luding witho ut limita tio n a ny lia b ility a rising fro m fa ult o r ne g lig e nc e , fo r a ny e rro rs o r missta te me nts in, o r o missio ns fro m, this pre se nta tio n o r a ny dire c t, indire c t o r c o nse q ue ntia l lo ss a rising fro m the use o f this pre se nta tio n o r its c o nte nts o r o the rwise a rising in c o nne c tio n with it.
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E BIT DA Mar gin
pla tfo rm e na b le s pa rtic ipa tio n a c ro ss a ll se g me nts
g ro wth in dia g no stic s & inte rna tio na l a c tivitie s suppo rte d b y e ffe c tive c o st ma na g e me nt
e a ding de mo g ra phic drive rs fo r fe rtility se rvic e s c o ntinue to drive se c to r g ro wth
Re ve nue 1.8%
E BIT DA 9.7%
NPAT attr ibutable to
dinar y e quity holde r s
E PS 12.4%
Inte r im Divide nd
fully fr anke d
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D
Y18 fla t a t 7,929 c yc le s
C g re w 1.2% o n pc p a he a d o f 0.3% ma rke t g ro wth
D a nd T AS ma rke ts
F C a c tivity inc re a se d 9.3%
C a nd NSW
D ma rke t
F Cs re pre se nt 13.7% o f o ve ra ll Virtus Austra lia n a c tivity (H1F Y17:12.4%)
BI T DA up 6.2% to $36.0m (H1F Y17: $33.9m) a s a re sult o f
Austra lia ’ s ma rke t le a ding F e rtility Pro vide r
Austra lia n IVF Cyc le s So urc e : Me dic a re Austra lia Re ve nue a nd Austra lia n se g me nt E BIT DA inc lude s Dia g no stic s a nd Da y Ho spita ls
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Annua l g ro wth ra te va ria b ility is no rma l – H1F Y18 vo lume impro ve me nts fo llo wing a sub due d F Y17
Y18 re fle c ts na tio na l ma rke t g ro wth o f 5.5% o ve r pc p to 23,095 c yc le s
D)
* Gro wth rate s to 2017 re fle c t annual g ro wth rate s – H1 g ro wth rate s re fle c t De c e mb e r 2018 ye ar to date g ro wth
Austra lia n I VF Cyc le s So urc e : Me d ic a re Austra lia
0% 2% 4% 6% 8% 10%
2010 2012 2014 2016 H1F Y18
Annua l Industr y Gr
a te s (F Y10-17)
*Annua l Gro wth Ra te s
20,758 21,719 21,432 23,383 21,890 23,095 19,000 19,500 20,000 20,500 21,000 21,500 22,000 22,500 23,000 23,500
H1F Y13 H1F Y14 H1F Y15 H1F Y16 H1F Y17 H1F Y18
Ma r ke t Volume s (HY13-18)
Numb e r o f I VF Cyc le s
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BI T DA inc re a se d 31.2% o ve r pc p
BI T DA g ro wth drive n b y sig nific a nt o pe ra tio na l impro ve me nts in F Y17
VF a c tivity
H1F Y18 (H1F Y17: 12.3%)
se rvic e s e xte rna lly
xpa nde d pa tho lo g y te sting pla tfo rm
xpa nde d g e ne ra l pa tho lo g y c o lle c tio n c e ntre fo o tprint
xpa nsio n o f Virtus Dia g no stic se rvic e s in T a sma nia & ACT
Stro ng re ve nue a nd E BI T DA g ro wth
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Da y Ho spita l re ve nue inc re a se d 2.0%
nc re a se mo stly re fle c ts I VF a c tivity in NSW a nd VI C
VF pro c e dure re ve nue o f 1.3% o n pc p a c ro ss a ll da y ho spita ls
VF surg ic a l re la tio nships & se rvic e s to impro ve utilisa tio n in F Y18
ho spita l re lo c a tio n to ne w fa c ility in Ale xa ndria , NSW to b e c o mple te d in 2018
Artist impression
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nte rna tio na l se g me nt E BI T DA up 74% to $4.6M drive n b y
mpro ve me nts to Sing a po re pe rfo rma nc e
mpro ve o pe ra tio na l pe rfo rma nc e ; a nd
I nte rna tio na l se g me nt re ma ins ke y to o ur dive rsific a tio n stra te g y
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E BI T DA impa c te d b y so fte r H1F Y18 vo lume s
Y18 (H1F Y17: 1,170) re fle c ting lo we r a c tivity a t SI MS
BI T DA (lo c a l c urre nc y) do wn 6.7% o n pc p a s a re sult o f so fte r vo lume a nd ma rke t re nt re vie ws
irst put o ptio n to a c q uire a furthe r 15% sta ke in SI MS g ro up wa s e xe rc ise d in Oc to b e r 2017
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K 12.4m; E BI T DA DK K 6.9m
urthe r Sc a ndina via n o ppo rtunitie s b e ing e xplo re d
Aa g a a rd F e rtility Clinic c o nso lida te s a nd de live rs
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Y18 (H1F Y17: 172)
Y18 E BI T DA SG$245,000 c o mpa re d to pc p lo ss
ive c o ntra c te d do c to rs plus fo ur a sso c ia te d spe c ia lists utilising the fa c ility
I nc re a se d c yc le s drive po sitive E BI T DA
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Statuto r y and adjuste d r e sults
No te s: Sha de d a re a indic a te s IF RS disc lo sure s H1F Y18 F ina nc ia l Sta te me nts; re fe r ne xt pa g e fo r re c o nc ilia tio n o f de ta ile d a djustme nts fro m sta tuto ry pro fit to a djuste d pro fit.
Statutor y Re sults Adjustme nt Adjuste d Re sults A $ millions H1F Y18 H1F Y17 H1F Y18 H1F Y17 H1F Y18 H1F Y17
Re ve nue 133.8 131.4 133.8 131.4
Se g me nt E BI T DA 40.6 36.5 40.6 36.5
E BIT DA 34.8 31.7 0.3 (0.3) 35.1 31.5
De pre c ia tio n a nd a mo rtisa tio n (6.1) (6.0) (6.1) (6.0) E BI T 28.7 25.7 0.3 (0.3) 29.0 25.4 I nte re st (3.9) (3.9) 0.5 0.5 (3.4) (3.4)
Profit be fore inc ome ta x 24.8 21.8 0.8 0.2 25.6 22.0
I nc o me ta x e xpe nse (7.5) (6.2) (0.1) (7.5) (6.3)
Profit a fte r inc ome ta x 17.3 15.6 0.8 0.1 18.1 15.7
Pro fit a fte r inc o me ta x a ttrib uta b le to no n-c o ntro lling inte re st (0.7) (0.9) (0.7) (0.9)
Profit a fte r inc ome ta x a ttributa ble to ordina ry e quity holde rs 16.6 14.7 0.8 0.1 17.4 14.8
E a rning s pe r sha re (c e nts) 20.62 18.35 Dilute d E a rning s pe r sha re (c e nts) 20.48 18.21
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Ne t lo ss fr
ansac tio n adjustme nts and tr ansac tio n e xpe nse s - $0.8m
No te s: 1. No n c a sh inte re st re la te s to the unwinding o f the disc o unt o n the put lia b ilitie s a nd c o nting e nt c o nside ra tio n.
$ Million H1F Y18 H1F Y17
Profit a fte r inc ome ta x a ttributa ble to ordina ry e quity holde rs 16.6 14.7
F a ir Va lue Adjustme nt to put lia b ilitie s 0.0 (0.5) F a ir Va lue Adjustme nt to c o nting e nt c o nside ra tio n 0.0 (0.5) No n Ca sh I nte re st1 0.5 0.5 T ra nsa c tio n c o sts 0.3 0.8 T a x-e ffe c t o n a ll a djustme nts 0.0 (0.1)
Adjuste d NPAT 17.4 14.8
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1H F Y18 Re ve nue drive n by:
F C pe rfo rma nc e
mpro ve me nt in VI C full se rvic e a nd T F C vo lume s
irst time c o ntrib utio n fro m Aa g a a rd
Pa rtia lly offse t by:
D ma rke t sha re lo ss
AS ma rke t sha re lo ss
1H F Y18 E BIT DA drive n by:
e ffic ie nc y initia tive s o utline d la te F Y17
C pro fita b ility
BI T DA g ro wth in Dia g no stic s
BI T DA
Pa rtia lly offse t by:
D
nc re a se d c o mpe titio n in we a ke r T AS ma rke t
101.2 114.5 132.3 131.4 133.8
H1F Y14 H1F Y15 H1F Y16 H1F Y17 H1F Y18
H1F Y14-18 Re ve nue
32.0 32.8 36.2 31.7 34.8
H1F Y14 H1F Y15 H1F Y16 H1F Y17 H1F Y18
H1F Y14-18 Gr
BIT DA
E BIT DA mar gin impr
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Str
ating c ash flo w
Ope r ating c ash flows use d to fund:
xe rc ise o f the first put o ptio n to a c q uire a furthe r 15% o f the SI Ms Gro up (I re la nd) o f $7.4m
Summar y (A$m) H1F Y18 (A$m) H1F Y17 (A$m)
Group E BIT DA 34.8 31.7
Cha ng e s in o the r o pe ra ting a sse ts / lia b ilitie s* 3.9 (8.0) Ne t fina nc ia l c o sts (3.2) (3.3) I nc o me T a x (5.2) (4.9) Othe r 0.4 0.6
Ope ra ting Ca sh F low 30.7 16.1
Ne t CAPE X (5.6) (4.6) Pa yme nt fo r a c q uisitio n o f no n-c o ntro lling inte re st (7.4) 0.0 Vo lunta ry de b t re pa yme nt (6.0) 0.0
F re e Ca shflow 11.7 11.5
Divide nds pa id (9.6) (12.1)
F re e Ca sh F low a fte r divide nds 2.1 (0.6)
*excludes non cash adjustments (share based payments, non-cash interest and forex)
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Cash balanc e
At no rma l le ve l a fte r utilisa tio n o f e xc e ss c a sh o n Ca pe x/ Put o ptio n e xe rc ise , divide nds a nd a vo lunta ry de b t re pa yme nt o f $6m
Ge ar ing
e ve ra g e ra tio o f 1.9x a djuste d g ro up E BI T DA (L T M)
ull c o mplia nc e with suffic ie nt he a d ro o m unde r b o th inte re st c o ve r a nd le ve ra g e ra tio s
unding c a pa c ity a va ila b le , $67m re fle c ting $57m
Othe r fina nc ia l lia b ilitie s de c re a se a s a re sult o f the e xe rc ise o f the first put o ptio n to a c q uire a furthe r 15%
Ms Gro up in I re la nd
Divide nd pr
14 c ps, (pc p13 c ps) fully fra nke d pa ya b le o n 17th April 2018
A $ millions Statutor y De c 17 Statutor y June 17
Ca sh 28.7 27.3 T ra de a nd o the r re c e iva b le s 9.8 12.3 I nve nto rie s 0.8 0.7 E q uity a c c o unte d inve stme nts 1.5 1.5 Othe r fina nc ia l a sse ts 3.5 3.0 PP&E 29.2 29.0 De fe rre d ta x a sse ts 4.9 4.6 I nta ng ib le a sse ts 412.7 411.5
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491.1 489.9
T ra de a nd o the r pa ya b le s 23.7 22.1 De fe rre d re ve nue 8.1 8.2 Bo rro wing s 147.7 153.6 De fe rre d ta x lia b ility 0.6 0.6 Pro visio ns 9.8 9.8 Curre nt ta x lia b ilitie s 3.0 0.4 Othe r fina nc ia l L ia b ilitie s 20.2 26.8
T
ia bilitie s 213.1 221.5 Ne t Asse ts 278.0 268.4
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Cre a ting mo re c hub b y c he e ks tha n a nyo ne e lse
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Purpo se : T
Ambition
T
xtra o rd ina ry c a re : o ur pa tie nts b e ing a t the c e ntre
e ffe c tive ne ss
ARS va lue c ha in
g e o g ra phie s & ma rke t se g me nts
Gr
ate gy
ARS
(Do me stic & Inte rna tio na l) Ma rke t pe ne tra tio n b y a c q uisitio n, g re e nfie ld &
c a re
se rvic e d e ve lo pme nt
Day Hospitals
(Do me stic ) Optimise utilisa tio n & e ffic ie nc y Oppo rtunistic d o me stic a c q uisitio n
Diagnostic s
(Do me stic )
L e ading minds, le ading sc ie nc e
L e ve ra g e fe rtility, g e ne tic s & g e ne ra l pa tho lo g y te sting fo o tprint Ma ximise d ive rsific a tio n
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Virtus is we ll pla c e d to ma na g e industry c ha lle ng e s a nd va ria b ility
Inte r na tional
inte rna tio na l ne two rk
in nic he ma rke t se g me nts a nd ta rg e te d g e o g ra phie s
re puta tio n within e xisting fo o tprint Austr a lia n F e r tility Busine ss
te c hno lo g y a dva nc e s to de live r e xtra o rdina ry pa tie nt c a re a nd
a ilo re d c linic a l a nd se rvic e de live ry mo de ls (QL D, T AS, Re g io na l NSW)
c linic a nd la b o ra to ry in Ale xa ndria NSW
Str ate gic Pr ior itie s
xtra o rdina ry pa tie nt c a re
uro pe Dia g nostic s & Da y Hospita ls Ope r ational Pr ior itie s
Dia g nostic s
xpa nd g e ne tic & pa tho lo g y se rvic e
xpa nd c o lle c tio n c e ntre fo o tprint
Da y Hospita l
nc re a se b usine ss de ve lo pme nt to ta rg e t no n-I VF pro c e dura l g ro wth
xpa nsio n o f da y ho spita l se rvic e s a t Ale xa ndria , NSW
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ARS is a lo ng -te rm g ro wth ma rke t
pa rtic ipa tio n in a ll ke y fe rtility se g me nts
Vir tus is we ll po sitio ne d fo r c o ntinue d gr
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Vir tus Note H1F Y18 H1F Y17 Change
Numb e r o f I VF Cyc le s in Virtus Austra lia 1 7,929 7,972 (0.5%) T F C c yc le s a s a pe rc e nta g e o f to ta l Virtus I VF c yc le s 13.7% 12.4% 1.3% Numb e r o f I VF Cyc le s in NSW, QL D, T AS, VI C, ACT ma rke t 19,804 18,665 6.1% E a ste rn sta te s ma rke t sha re 1 40.0% 42.7% (2.7%) Na tio na l ma rke t sha re 1 34.3% 36.4% (2.1%) T re a tme nt vo lume 2 15,405 15,416 (0.1%) Ave ra g e numb e r o f F e rtility Spe c ia lists 109 105 3.3% Ave ra g e numb e r o f c yc le s pe r F e rtility Spe c ia list 73 76 (3.7%) Ave ra g e a g e o f F e rtility Spe c ia lists 52 50 3.7% Ave ra g e to ta l re ve nue pe r c yc le (A$) 13,973 13,940 0.2% L a b o ur a s a % o f to ta l re ve nue 31.4% 31.2% (0.2%) Pro vide r fe e s a s a % o f to ta l re ve nue 15.1% 15.3% 0.2% Re po rte d se g me nt E BI T DA ma rg in % 32.3% 30.3% 2.0%
No te s: 1. Implie d la st six mo nths ma rke t sha re is b a se d o n fre sh a nd c a nc e lle d c yc le s in NSW,VIC, QL D, T AS a nd ACT 2. T
s a nd F E T s
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I nte rna tio na l Dive rsific a tio n
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53% 35% 12%
T r e atme nt Mix
Cyc le F ro ze n AI / OI
Vir tus Cyc le s
7,346 7,617 7,663 8,510 7,972 7,929 785 1,272 1,367 1,555
HFY13 HFY14 HFY15 HFY16 HFY17 HFY18 Australian Cycles International Cycles
8,448 9,782 9,339 9,484
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Austr alia
e de ra l He a lth De pa rtme nt re vie w o f Me dic a re Be ne fits Sc he dule o ng o ing
PGD funding o ng o ing
Ir e land
c urre ntly priva te ly funde d
a mily Re la tio nships Ac t 2015 pre c luding a no nymo us e g g do na tio n
Singapor e
PGD/ PGS a c c e ss in Sing a po re
De nmar k
a vo ura b le c ha ng e s to do no r se rvic e s a nd inte rna tio na l use o f g a me te s
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ASSIST E D RE PRODUCT IVE SE RVICE S SPE CIAL ISE D DIAGNOST ICS DAY HOSPIT AL S
Austra lia 41 Ire land 3 Sing a po re 1 De nma rk 1 F E RT IL IT Y CL INICS
E mb ryo lo g y 26 Andro lo g y 29 Ge ne ra l Pa tho lo g y 5 Ge ne tic s 2 L ABORAT ORIE S
IVF a nd no n-IVF pro c e d ure s
DAY HOSPIT AL S
F E RT IL IT Y SPE CIAL IST S
NUR SE S, COUNSE L L OR S, PAT IE NT SUPPOR T (inc l DIAGNOST ICS)
SCIE NT IST S