VIRT US HE AL T H (ASX: VRT )
F INANCIAL RE SUL T S PRE SE NT AT ION F Y2017
T ue sda y 22nd Aug ust, 2017 AE ST
F INANCIAL RE SUL T S PRE SE NT AT ION F Y2017 ue sda y 22 - - PowerPoint PPT Presentation
VIRT US HE AL T H (ASX: VRT ) F INANCIAL RE SUL T S PRE SE NT AT ION F Y2017 ue sda y 22 nd Aug ust, 2017 AE T ST DISCL AIME 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 a lth L imite d
VIRT US HE AL T H (ASX: VRT )
T ue sda y 22nd Aug ust, 2017 AE ST
2
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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4
Re ve nue down 1.8% to $256.5m
Y16: 18,752)
, F E T , IUI a nd c a nc e lle d we re up 3.6% to 35,360 o n pc p
d o wn 0.24%
Gr
BIT DA be for e impa ir me nt down 5.9% to $64.8m
BIT DA d o wn 7.6% to $65.8m
BI T DA up 24.4% to $7.1m
Ne t Pr
ta x (NPAT ) a ttr ibuta ble to or dina r y e quity holde r s down 14.6% to $28.1m Ge a r ing a t 2.1X a djuste d Gr
BIT DA Ca sh/ De bt F unding c a pa c ity ~$60m ($51m unuse d b o rro wing fa c ility a nd ~$9m unc o mmitte d
c a sh)
F ina l divide nd 12c ps fully fr a nke d (F Y16:15c ps)
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BI T DA suppre sse d b y Austra lia n ma rke t pe rfo rma nc e
VF E BI T DA de c line
he F e rtility Ce ntre “T F C” ma rg in re duc tio n;
BI T DA g re w in H2 F Y17 o n pc p a s a re sult o f:
F C vo lume g ro wth
BI T DA Sing a po re
irst time c o ntrib utio n Aa g a a rd
c o mpo sitio n c ha ng e
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
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7
Austr alian F e r tility Busine ss
Vic tor ia
pio ne e r
Cha ng e s for e c a st to de live r a nnua lise d OPE X r e duc tion of $3.5m in F Y18
T F C (Se r vic e Mode ls)
Ope r ating E xpe nse s
ffe c tive c o st ma na g e me nt (Dia g no stic & Ma rke ting re struc ture )
e y supplie r & c o nsulting c o sts re duc e d
Cha ng e s for e c a st to de live r a nnua lise d OPE X r e duc tion of $1.5m in F Y18 (in a ddition to Vic tor ia )
Diagnostic s
$5m o f fo r e c ast annualise d savings fo r F Y18
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Y17 do wn 3.7% to 15,776 c yc le s o n a like fo r like b a sis
AS & QL D
C de c line ; ma rke t sha re sta b le in la st q ua rte r
F C c linic s inc re a se d 3.9% o n a like fo r like b a sis
Y17
Y17 E BI T DA va ria nc e de c line d c o mpa re d to pc p
F Cs re pre se nt ~15% o f o ve ra ll Virtus Austra lia n a c tivity
Y16: $219.5m)
BI T DA do wn 7.6% to $65.8m (F Y16: $71.2m)
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Y17 re fle c ts a ma rke t c o ntra c tio n o f 1.2% o ve r pc p to 43,948 c yc le s. H2 vo lume s impro ve d
Austra lia n IVF Cyc le s So urc e : Me d ic a re Austra lia
0% 2% 4% 6% 8% 10%
2010 2011 2012 2013 2014 2015 2016 2017
Annua l Industr y Gr
a te s (F Y10-17)
Annua l Gro wth Ra te s
39,457 39,688 41,154 41,557 44,468 43,948 36,000 37,000 38,000 39,000 40,000 41,000 42,000 43,000 44,000 45,000
F Y12 F Y13 F Y14 F Y15 F Y16 F Y17
Ma r ke t Volume s (F Y12-17)
Numb e r o f I VF Cyc le s
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in F Y17 le a ding to E BI T DA g ro wth o f 37%
14% o f fre sh c yc le s (H1F Y17: 12.3%)
se ro lo g y a nd e a rly o b ste tric pa tho lo g y te sting
xpa nde d c o lle c tio n c e ntre fo o tprint
a sma nia & ACT
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a c tivity
pro c e dure re ve nue o f 9.2% o n pc p a c ro ss a ll da y ho spita ls
surg ic a l re la tio nships & se rvic e s to impro ve utilisa tio n in F Y18
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13
IRE L AND Pe rfo rming in line with stra te g ic o b je c tive s SINGAPORE I nc re a sing ma rke t re puta tio n a nd impro ve d fina nc ia l pe rfo rma nc e
DE NMARK
Suc c e ssful inte g ra tio n with Virtus a nd c o ntinue d e xpa nsio n
Inte r natio nal E xpansio n: E ur
tunitie s be ing pur sue d
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Gro up re ma ins ma rke t le a de r
Y17 (F Y16: 2,321) c o nsiste nt re sult c o nside ring six we e k c lo sure fo r Ro tunda IVF upg ra de & Co rk do c to r c ha ng e s
BIT DA (lo c a l c urre nc y) in line with pc p
a ppo intme nts
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Y17 (F Y16: 301)
Y17 E BIT DA po sitive
ull ye a r E BI T DA lo ss impro ve s to S$120,000 c o mpa re d to pc p lo ss o f S$637,000 (lo c a l c urre nc y)
spe c ia lists utilising the fa c ility
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c o lla b o ra tive me dic a l & sc ie ntific mo de l
PS a c c re tive o n a full ye a r 2017 b a sis c o ntrib uting K r4.4m to Gro up E BIT DA (7 mo nths)
e a ding Da nish fe rtility c linic o utside Co pe nha g e n with hig he st na tio na l re po rte d suc c e ss ra te s *
his a c q uisitio n o pe ns furthe r Sc a ndina via n o ppo rtunitie s
* Da nish F e rtility So c ie ty: ART a rsra ppo rt 2015
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Statuto r y and adjuste d r e sults
Statutor y Re sults Adjustme nt Adjuste d Re sults A $ millions F Y17 F Y16 F Y17 F Y16 F Y17 F Y16
Re ve nue 256.5 261.2 256.5 261.2
Se g me nt E BI T DA 72.9 76.9 72.9 76.9
E BIT DA (be fore impa irme nt) 64.8 68.9 (3.0) (1.3) 61.8 67.6
De pre c ia tio n, a mo rtisa tio n a nd impa irme nt (14.0) (11.2) 1.9 (12.1) (11.2) E BI T 50.8 57.7 (1.1) (1.3) 49.7 56.4 I nte re st (8.0) (8.7) 1.2 1.1 (6.8) (7.6)
Profit be fore inc ome ta x 42.8 49.0 0.1 (0.2) 42.9 48.8
I nc o me ta x e xpe nse (12.8) (14.2) (0.1) (12.9) (14.2)
Profit a fte r inc ome ta x 30.0 34.8 0.0 (0.2) 30.0 34.6
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 (1.9) (1.9) (1.9) (1.9)
Profit a fte r inc ome ta x a ttributa ble to ordina ry e quity holde rs 28.1 32.9 0.0 0.2 28.1 32.7
E a rning s pe r sha re (c e nts) 35.00 41.18 Dilute d E a rning s pe r sha re (c e nts) 34.79 40.79
No te s: Sha de d a re a indic a te s IF RS disc lo sure s F Y17 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.
19
$ Million F Y17 F Y16
Profit a fte r inc ome ta x a ttributa ble to ordina ry e quity holde rs 28.1 32.9
F a ir Va lue Adjustme nt to put lia b ilitie s1 (3.3) (2.2) F a ir Va lue Adjustme nt to c o nting e nt c o nside ra tio n (0.5) 0.0 No n Ca sh I nte re st2 1.2 1.1 T ra nsa c tio n c o sts 0.8 0.9 I mpa irme nt o f Go o dwill3 1.9 0.0 T a x-e ffe c t o n a ll a djustme nts (0.1) 0.0
Adjuste d NPAT 28.1 32.7
Ove r all tr ansac tio n r e late d no n-c ash adjustme nts, tr ansac tio n e xpe nse s and Impair me nt ne t o ut to NIL in F Y17
No te s: 1. F a ir va lue a djustme nt to put lia b ilitie s re la ting to re ma ining inte re sts in a c q uire d e ntitle s 2. 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 o ptio n a nd c o nting e nt c o nside ra tio n lia b ilitie s 3. Impa irme nt o f g o o dwill in re la tio n to T a sma nia
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186.6 201.2 234.1 261.2 256.5
F Y13 F Y14 F Y15 F Y16 F Y17
F Y13-17 Re ve nue
F Y17 Re ve nue impa c te d by:
F C pric e re duc tio n
Pa rtia lly offse t by:
mpro ve me nt in Virtus full se rvic e a c tivity in Vic to ria H2F Y17
F C vo lume
43.4 59.4 61.4 68.9 64.8
F Y13 F Y14 F Y15 F Y16 F Y17
F Y13-17 Gr
BIT DA
F Y17 E BIT DA impa c te d by:
BI T DA do wn b y $3.8m o n pc p
F C ma rg in de te rio ra tio n
Pa rtia lly offse t by:
BI T DA g ro wth
BI T DA lo ss re duc tio n
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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
Ge ar ing
nc re a se in b o rro wing s a rising fro m a dditio na l dra wdo wn o f $11m to fund a c q uisitio n o ffse t b y vo lunta ry re pa yme nt
e ve ra g e ra tio o f 2.1 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 , ~$60m re fle c ting $51m o f unuse d fa c ilitie s a nd ~$9m o f unc o mmitte d c a sh
Divide nd pr
12c ps, (pc p15c ps) fully fra nke d pa ya b le o n 13 Oc to b e r 2017
A $ millions Statutor y June 17 Statutor y June 16
Ca sh 27.3 22.2 T ra de a nd o the r re c e iva b le s 12.3 11.3 I nve nto rie s 0.7 0.6 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 3.0 2.3 PP&E 29.0 30.3 De fe rre d ta x a sse ts 4.0 6.0 I nta ng ib le a sse ts 411.5 399.0
T
489.3 473.2
T ra de a nd o the r pa ya b le s 22.1 25.1 De fe rre d re ve nue 8.2 5.8 Bo rro wing s 153.6 147.4 Pro visio ns 9.8 9.6 Curre nt ta x lia b ilitie s 0.4 0.0 Othe r fina nc ia l L ia b ilitie s 26.8 27.2
T
ia bilitie s 220.9 215.1 Ne t Asse ts 268.4 258.0
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Ope r ating c ash flo w impac te d by lo we r F Y17 E BIT DA
Ope r ating c ash flows use d to fund:
Ope ra ting c a sh flo ws a ffe c te d b y lo we r E BI T DA a nd lo we r pa ya b le s in F Y17 Ne t de b t inc re a se d b y $2.0m a s a re sult
the a c q uisitio n o f Aa g a a rd F e rtility Clinic in De nma rk, mo stly o ffse t b y a n inc re a se in c lo sing c a sh b a la nc e o f $4.0m a nd a vo lunta ry de b t re pa yme nt o f $5.0m.
Summar y (A$m) F Y17 (A$m) F Y16 (A$m)
Group E BIT DA 64.8 68.9
Cha ng e s in o the r o pe ra ting a sse ts / lia b ilitie s (5.6) 1.5 Ne t fina nc ia l c o sts (6.4) (6.9) I nc o me T a x (10.7) (16.2) Othe r no n-c a sh a djustme nts* (3.4) 0.4
Ope ra ting Ca sh F low 38.7 47.7
Ne t CAPE X (9.8) (9.6)
F re e Ca shflow 28.9 38.1
Divide nds pa id (22.5) (22.1)
F re e Ca sh F low a fte r divide nds 6.4 16.0
* Increase resulting from non cash fair value gains
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24
Pur po se : T
aspir atio ns to c r e ate a family
Ambition
T
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
c e ntre o f e ve rything we d o
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 &
Re se a rc h d rive n 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 ve ra g e fe rtility, g e ne tic s & g e ne ra l pa tho lo g y te sting a c ro ss the b usine ss Othe r d ive rsific a tio n
L e ading minds, le ading sc ie nc e
25
pla tfo rm fo r pa rtic ipa tio n in a ll ke y fe rtility se g me nts
a rly a do ptio n o f te c hno lo g y, a dva nc e s in sc ie nc e a nd o pe ra tio ns fo r pa tie nt, do c to r a nd e mplo ye e va lue
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27
Ave r age sale s r e ve nue r e fle c ts mix c hange fr
vic e to T F C
Vir tus Note F Y17 F Y16 Change
Numb e r o f I VF Cyc le s in Virtus Austra lia 1 15,776 16,130 (2.2%) 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 15.0% 13.0% 2.0% Numb e r o f I VF Cyc le s in NSW, QL D, T AS, VI C, ACT ma rke t 1 37,497 37,587 (0.2%) E a st sta te s ma rke t sha re 1 42.1% 43.9% (1.8%) Na tio na l ma rke t sha re 1 35.9% 36.2% (0.3%) T re a tme nt vo lume 2 30,148 29,917 1.7% Ave ra g e numb e r o f F e rtility Spe c ia lists 106 100 6.0% Ave ra g e numb e r o f c yc le s pe r F e rtility Spe c ia list 149 161 (7.5%) Ave ra g e a g e o f F e rtility Spe c ia lists 51 50 2.0% Ave ra g e to ta l re ve nue pe r c yc le (A$) 13,758 13,784 (0.2%) L a b o ur a s a % o f to ta l re ve nue 32.8% 30.0% (2.8%) Pro vide r fe e s a s a % o f to ta l re ve nue 15.1% 15.1% 0.0% Re po rte d se g me nt E BI T DA ma rg in % 30.0% 32.1% (2.1%)
No te s: 1. Implie d la st 12mo 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
28
Y17
26,167 29,034 32,363 35,921 38,472 36,301 39,457 39,688 41,154 41,557 44,468 43,948
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Austr a lia n Ma r ke t Volume s (2006-2017)
Ma rke t Ma rke t 12-T re nd
29
53% 33% 14%
T r e atme nt Mix
Cyc le F ro ze n AI / OI
Vir tus Cyc le s
30
31
ASSIST E D RE PRODUCT IVE SE RVICE S SPE CIAL ISE D DIAGNOST ICS DAY HOSPIT AL S
Austra lia 41 Ire la nd 3 Sing a po re 1 De nma rk 1
F E RT IL IT Y CL INICS
E mb ryo lo g y 29 And ro lo g y 27 E nd o c rino lo g y 4 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
32
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 is in pro g re ss
(“NHMRC”) ha s pro vide d ne w g uida nc e o n se x se le c tio n fo r fa mily b a la nc ing (no t c urre ntly pe rmitte d) a nd do no r se rvic e s
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
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