For the period ended For the period ended 31 December 2018 31 - - PowerPoint PPT Presentation

Interim financial results For the period ended 31 December 2018 Interim financial results For the period ended 31 December 2018

Bibi Goss-Ross Chief Operations Officer

Operational overview

Advanced overview

Advanced Health’s 2018 financial year characterised by significant changes in the healthcare industry We made mistakes - to turn a start-up business into profitable ventures takes longer than we anticipated Compared to previous years, this year only added one additional hospital to the group in Boksburg, Advanced East Rand bringing the total to 11 day hospitals. Harbour Bay, Simon’s Town will join the group in the fourth quarter of 2019.

Revenue and case numbers for 2018 increased by 35 and 40% when compared to 2017 Ophthalmology and orthopaedic revenue increased by 20% when compared to same time in 2017 Endoscopy surgery increased by 30% Dentistry, ENT and cosmetic surgery increased by 5 and 10%

Growth

Day hospital industry

Change which took place years ago in the rest

• f the world, is becoming reality in South

Africa Enforcement of Discovery Health to channel day procedures to appropriate same day surgical facilities will increase theatre utilization Specialists remunerated at a higher rate when

• perating at a day hospital is evidence that

day hospitals are financially cost effective alternative to hospitalization What Discovery starts, others follow

Advanced Health’s challenges and views

Many challenges - yet exciting times ahead Healthcare providers cannot fight the system

• f smart hospitalization – change is difficult,

but to the benefit of all in the SA healthcare Encourage all role-players to work with day hospitals – not against Co-payments / penalties to patients when admitted to an acute hospital is evidence of cost effective surgery in same-day facilities

Our opportunities

Out migration of day cases from acute care driven by preferred provider networks Under utilization of theatre time currently Expanding network of different surgeries

Our opportunities

Increase further medical scheme support and medical funder networks Increase theatre capacity due to growing medical scheme network - Saturday lists and evening lists Patients want convenience – day hospitals are the convenient smart alternative to hospitalization.

Plan of action

Retain and recruit quality operating specialists where the case-mix is dominated by day cases and build loyalty Build relationship with specialists and referring doctors Increase shareholding of doctors working at AHSA (loyalty) Continue to appoint staff with the skill and experience required – nursing staff are core attraction to specialists Continue to control costs and purchase the right product at the right price

Carel Petrus Snyman Chief Financial Officer

Financial overview

*Excluding East Rand which started operating in February 2018 – Profit after tax increased by 16% within the South African segment. Overview

Exchange rate fluctuations

Due to the continuous volatility of the currency markets, it is impossible to forecast the exchange rates. As at 31 December 2018, the closing ZAR weakened against the AUD closing rate compared to Q1 2019. The average ZAR rate for the period under review (Q2 2019) strengthened against the AUD compared to Q2 2018.

Number of cases per quarter

The increase in patient numbers compared to Q2 2018 is 10% and 32% for PMA and AHSA respectively. The increase in the patient numbers from Q2 2018 is due to

• rganic growth for

existing facilities as well as the new facility East Rand that became

• perational in February

2018.

Group statement of financial position as at 31 December 2018

₁ Other financial assets increased due to the loan advanced to Epping Surgery Centre(ESC) Property Unit Trust by ESC. ₂ Deferred tax increased due to the taxable losses incurred in South Africa for the 6 month period.

3

Trade and other receivables decreased both in South Africa and Australia. This is attributed to two factors: *Revenue in December was low compared to the other months due to the holiday season. *Improvement in the collection period in South Africa by more than 100% from 17 days to 7 days.

4

Increase in current tax receivable due to income tax paid by Presmed Australia.

Dec'18 Jun'18 Jun'17 Unaudited Audited Audited R'000 R'000 R'000 Assets Non-current Assets 424 525 418 273 349 700 Property, plant and equipment 280 448 282 744 251 184 Goodwill 30 175 30 185 26 597 Intangible assets 32 256 33 520 28 458 Operating lease asset 476 478 1 240 Other financial assets 1 10 690 10 586 5 894 Deferred taxation 2 70 480 60 760 36 327 Current Assets 93 917 96 709 88 640 Inventories 13 868 13 958 10 038 Trade and other receivables 3 20 806 33 393 26 576 Other financial assets 1 4 791 2 298 5 777 Operating lease asset 3 064 5 634 5 412 Current tax receivable 4 1 621 107 354 Cash and cash equivalents 49 767 41 319 40 483 Total Assets 518 442 514 982 438 340

5

Other financial liabilities increased due to loans advanced from: *Eenhede Konsultante amounting to R24,3 million for South Africa and R0,6 million for Australia. *Other financial institutions amounting to R4,4 million for South Africa.

6

No additional finance leases were obtained. An amount of R4,8 million was re-paid with R0,9 million relating to repayments in South Africa.

7

Trade and other payables decreased during the 6 months under review mainly due to a decrease in capex purchases.

Group statement of financial position as at 31 December 2018 - continue

Dec'18 Jun'18 Jun'17 Unaudited Audited Audited R'000 R'000 R'000 Equity and Liabilities Capital and reserves 175 599 193 831 141 875 Stated capital 221 956 221 956 137 378 Foreign currency translation reserve 34 281 34 363 28 898 Retained earnings (82 671) (64 368) (28 417) Share based payment reserve 2 033 1 880 4 016 Non-controlling interest 53 376 53 459 43 507 Total Equity 228 975 247 290 185 382 Non-current Liabilities 197 061 170 084 184 738 Other financial liabilities 5 153 672 127 495 142 630 Finance lease obligations 6 19 156 19 497 25 408 Operating lease liability 23 212 22 101 16 320 Provisions 1 021 991

• Deferred tax
• 380

Current Liabilities 92 406 97 608 68 220 Other financial liabilities 5 20 697 18 239 13 630 Finance lease obligations 6 14 325 18 718 8 820 Trade and other payables 7 41 466 45 919 36 658 Provisions 8 124 7 366 3 645 Current tax liability 6 139 5 000 2 326 Operating lease liability 1 655 2 366 3 141 Total Equity and Liabilities 518 442 514 982 438 340 Notes to Statement of Financial Position Total number of shares in issue 287 988 287 988 221 615 Net asset value per share (cents) 79.51 85.87 83.65 Net tangible asset value per share (cents) 57.83 63.75 58.81

Group statement of profit or loss and other comprehensive income for the period ended 31 December 2018

Revenue increased by 22% - from Q2 2018. Increase attributable to

• rganic growth amounts to 20%.

Gross profit percentage improved by 8% from 49% to 53% which is an indication of improvement in management of direct costs both in South Africa and Australia. Loss after taxation improved by 32%. South Africa experienced a 6% increase in losses whilst Presmed Australia's profit increased by more than 100%. Positive EBITDA amounting to R4,6 million.

Dec'18 Dec'17 Dec'16 6 months 6 months 6 months Unaudited Unaudited Unaudited R'000 Var % R'000 Var % R'000 Revenue 244 079 22 199 463 33 149 751 Cost of sales (114 055) 13 (100 750) 35 (74 651) Gross profit 130 024 32 98 713 31 75 100 Gross profit % 53% 8 49% <100 50% Other income 2 121 >100 902 55 581 Other operating expenses (99 591) 17 (85 235) 30 (65 572) EBITDAR 32 554 >100 14 380 42 10 109 Investment income 219 (23) 286 (1) 290 Finance costs (9 048) 32 (6 865) 10 (6 255) Rental paid (27 970) 20 (23 222) (0) (23 236) Depreciation and amortisation (17 131) 7 (15 939) 26 (12 636) Loss before taxation (21 376) (32) (31 360) (1) (31 728) Taxation 5 899 (32) 8 716 (4) 9 048 Loss after taxation (15 477) (32) (22 644) (0) (22 680) Other comprehensive income for the (134) <100 (2 714) (79) (13 202) Total comprehensive loss for the period/year (15 611) (38) (25 358) (29) (35 882) Loss attributable to: Owners of the parent (17 888) (23) (23 332) (23 311) Non-controlling interest 2 411 >100 688 9 631 (15 477) (32) (22 644) (0) (22 680) Total comprehensive loss attributable to: Owners of the parent (17 970) (27) (24 696) (31) (35 793) Non-controlling interest 2 359 >100 (662) >100 (89) (15 611) (38) (25 358) (29) (35 882) Loss per share Basic (cents per share) (6.21) (27) (8.55) (19) (10.52) Diluted (cents per share) (6.21) (27) (8.55) (19) (10.52)

Group statement of cash flow for the period ended 31 December 2018

Positive cash generated from operations. Marked improvement to R24,3 million in cash generated from operations from Australia. South Africa's cash from operations still in a negative position (R11,3 million) but a 16% improvement from Q2 2018. Less capital expenditure as compared to December

• 2017. Capex for Harbour Bay will still occur during

Q3 & Q4 of 2019. For the 6 month period, capex expenditure for Harbour Bay amounts to R4.0 million. Less cash obtained from financing activities - the group is less reliant on debt.

• 73

• (8 440)

• 57

• 3 481
• Dividends paid

• (807)

Group statement of changes in equity for the period ended 31 December 2018

Net Stated Share based Foreign Retained Non Total capital payment currency earnings / controlling equity reserve translation reserve (Accumulated loss) interest R'000 R'000 R'000 R'000 R'000 R'000 Balance as at 1 July 2016 137 378 4 465 40 380 16 968 44 300 243 491 Loss for the year

• (48 176)

(7) (48 183) Other comprehensive loss

• (11 482)
• (279)

(11 761) Share based payment expense

• 2 342
• 2 342

Change in interest of subsidiary

• 2 867

2 867 Transfer between reserves

• (2 791)
• 2 791
• Dividends declared
• (3 374)

(3 374) Balance as at 30 June 2017 137 378 4 016 28 898 (28 417) 43 507 185 382 (Loss)/Profit for the year

• (39 588)

3 343 (36 245) Other comprehensive income

• 5 465
• 1 035

6 500 Share based payment expense

• 1 501
• 1 501

Issue of shares -net 84 578

• 84 578

Change in interest of subsidiary

• 11 532

11 532 Transfer between reserves

• (3 637)
• 3 637
• Dividends declared
• (5 958)

(5 958) Balance as at 30 June 2018 221 956 1 880 34 363 (64 368) 53 459 247 290 (Loss)/Profit for the period

• (17 888)

2 411 (15 477) Other comprehensive loss

• (82)
• (52)

(134) Issue of shares

• 695

695 Transfer between reserves

• (415)

415

• Share based payment expense
• 153
• 153

Dividends declared

• (3 552)

(3 552) Balance as at 31 December 2018 221 956 2 033 34 281 (82 671) 53 376 228 975

Unaudited Dec 2018 Unaudited Dec 2017

0.87 1.02 69% 0.81 0.94 38% Quick ratio Current ratio Net debt less cash to equity ratio

Current assets less inventories Current liabilities Current assets Current liabilities Interest bearing debt less cash Total equity

Key financial ratios

Australia (PMA) South Africa Group T

• tal

Revenue (R’000) Profit/(loss) after tax (R’000) % Revenue

• f total

165 690 8 344 68% 32% 78 389 (23 584) 244 079 (15 477) 100% Corporate

• (237)

Segmental report for the period ended 31 December 2018

27 Feb 2019

Strictly Private & Confidential

A leading healthcare company specialising in establishing and managing private day hospitals

PRESMED

AUSTRALIA

GROUP OF

DAY HOSPITALS

NSW WA SA VIC QLD NT TAS NSW Coffs Day Hospital Madison Day Surgery Epping Surgery Centre Chatswood Private Hospital

DAY HOSPITALS

+ 1 LASER VISION CLINIC

Central Coast Surgery Centre

+ Laser Vision Clinic

OUR DAY HOSPITALS

22

5

23

5

day

hospitals

1

laser vision

clinic

teaching

hospital

Affiliated with

THE UNIVERSITY OF

SYDNEY

as a

group

93

patient

satisfaction

%

130

accredited

surgeons

Over

8,300

patient surgeries

Over

ASSOCIATION

EYE HOSPITALS

The first Australian

Private Member

WORLD

• f the
• f

OVERVIEW SNAPSHOT

accredited doctor

registrar training program

RANZCO

CONSOLIDATED GROUP HIGHLIGHTS

Up 17% on last year for the same period

17%

$16.1

million

Revenue

Up 14% on last year for the same period

14%

$ 2.3 million

EBITDA

Up 57% on last year for the same period

57%

$1.2 million

NPBT

Up 105% on last year for the same period

105%

24

patients

8,395

Patient Numbers

for the 6 months ending 31 December 2018

25

PMA GROUP MILESTONES

MDS is the fasting growing facility within

• ur group and controls Ophthalmology

in the greater area PMA host and sponsor conferences and CPD events Sydney-wide, providing an

• pportunity for our surgeons

to present and secure referrals Working together with the referrers to bridge the gap and link our doctors and their referrers to our hospitals Every Ophthalmic practice in the Central Coast area now has an ownership in CCDH Doctors perform charitable no- charge surgery on patients both in Australia outback regions and internationally The PMA Group has established a Specialist Advisory Committee to support ongoing ophthalmic surgery to those in need both within Australia and outside Australia CCDH has every

• phthalmologist in the greater

area working at the facility CPH has expanded its floor place in pre and post op areas to accommodate the increase in patient throughput and efficiencies

PMA GROUP

MILESTONES

26 Pursuing investment opportunities within the day hospital business to increase PMA’s Group portfolio. Ensuring cost control objectives are met with opportunities for reduction through rationalisation

• f expenses and group

purchasing power. Driving up patient numbers through attracting doctor support, whilst maintaining the highest levels of patient excellence.

Management have identified several opportunities within the Australian day hospital industry and remain in communication with the owners of these day hospitals. New surgeons to join existing surgeons practices driving patient throughput. Encouraging existing surgeons to consolidate surgery at multiple facilities towards our facilities. Management, with the support of our surgeons, are in the process of formulating the standardisation of surgical supplies and lenses to reduce our consumable costs. Staff Development Program for nursing staff to improve clinical efficiencies.

STRATEGIC FOCUS

3 2 1

27

A leading healthcare company specialising in establishing and managing private day hospitals

810 Pacific Highway, Gordon, NSW 2072 02 9416 0414 info@presmed.com.au www.presmed.com.au

Question and answers

Disclaimer

• Statements contained throughout this presentation regarding the prospects of the group have not been

reviewed or reported on by die group’s external auditors.

• Forward-looking statements involve known and unknown risks, uncertainties and other important factors that

could cause the actual results, performance or achievements of the company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. These forward looking statements may be identified by word such as “expect, believe, anticipate, plan, estimate, intend, project, target, predict, outlook” and words of similar meeting.

• Forward looking statements are not statements of fact but statements by management of Advanced Health

Limited based on its current estimates, projections, beliefs, assumptions and expectations regarding the group’s future performance.

• No assurance can be given that forward-looking statements will prove to be correct and undue reliance should

not be placed on such statements.

• The risks and uncertainties inherent in the forward-looking statements contained in this presentation include,

but are not limited to; domestic and international business and market conditions; changes in the domestic or international regulatory and legislative environment in the countries in which the Group operates; changes to domestic and international operational, economic, political and social risks; changes to IFRS and the interpretations, applications and practices subject thereto as they apply to past, present and future periods; and the effects of both current and future litigation.

• The company undertakes no obligation to update publically or release any revisions to these forward-looking

statements contained in this presentation and does not assume responsibility for any loss or damage whatsoever and howsoever arising as a result of the reliance of any part thereon, including, but not limited to, loss of earnings, profits or consequential loss or damage.