FY2010 Results 12 Months Ended 30 June 2010 Investor Presentation 17 August 2010
Financial Summary FY2010 FY2009 Revenue ($m) 1,296.8 1,336.6 EBITDA ($m) 331.0 355.3 EBITDA Margin (%) 25.5 26.6 Net Profit After Tax ($m) 132.0 108.5 EPS (cps) 27.8 28.7 Final dividend (cps) 10.0 7.0 2
Income statement Year ended Year ended Six months All amounts in $m 30 June 2010 30 June 2009 31 Dec 2009 Trading revenue 1,296.8 1,336.6 655.9 EBITDA 331.0 355.3 175.0 Depreciation & Amortisation (72.9) (67.8) (35.2) Finance costs (77.8) (128.1) (37.2) Income tax (46.1) (31.3) (24.9) Net profit before minorities & one ‐ offs 134.2 128.1 77.7 Minorities & one ‐ offs (2.2) (19.6) (1.1) Net profit after tax 132.0 108.5 76.6 3
Segment analysis Year ended Year ended Six months All amounts in $m 30 June 2010 30 June 2009 31 Dec 2009 Revenue Medical Centres 259.0 252.0 131.8 Pathology 720.7 737.4 363.5 Imaging 289.1 314.4 147.1 Health Technology 46.4 49.4 24.1 Corporate 9.8 7.3 3.2 Intersegment (28.2) (23.9) (13.8) Total 1,296.8 1,336.6 655.9 EBITDA Medical Centres 142.4 140.9 73.8 Pathology 135.3 145.2 73.4 Imaging 42.6 54.8 23.0 Health Technology 20.0 16.8 9.7 Corporate (9.3) (2.4) (4.9) Total 331.0 355.3 175.0 4
Operating cash flow ■ Full conversion of EBITDA into cash flow Gross operating cash to EBITDA $m Cash flow from Operating Activities 225.0 Add back: ‐ Interest paid 62.1 ‐ Income Tax paid 28.4 ‐ Acquired Symbion provisions paid 16.0 Gross Operating cash flow 331.5 EBITDA 331.0 Ratio of Gross Operating Cash Flow to EBITDA 100% 5
Synergies from Symbion acquisition Minimum Minimum All figures in $m achieved estimated Pathology 48 39 Medical Centres 20 24 Imaging 14 19 Corporate 13 13 95 95 ■ Pathology labour and consumable synergies exceeded ■ Medical Centres less backfilling of Symbion sites than anticipated ■ Imaging radiologist productivity gains slower than anticipated ■ Corporate in line with expectations 6
Medical Centres Year ended Year ended Six months 30 June 2010 30 June 2009 31 Dec 2009 Trading Revenue 259.0 252.0 131.8 EBITDA 142.4 140.9 73.8 EBITDA Margin (%) 55.0 55.9 56.0 ■ Underlying organic growth 10% ■ 53 large scale centres now open ■ Doctor recruitment progressing well ■ GP and other services below normal anticipated growth ■ Co ‐ payments introduction – results as expected ■ Current focus on backfilling GP and services into centres 7
Medical Centres – underlying organic growth $m EBITDA – 2009 140.9 Less: Federal Budget funding cuts (4.1) Accounting changes – expensing acquisition costs (1.8) Reduction in contribution from clinical trials (5.0) (10.9) 130.0 FY2010 organic growth ~ 10% 12.4 EBITDA – 2010 142.4 ■ GP Medicare Volume Growth Data <3% for FY2010 ■ 1% GP Volume Growth adds approximately $1.5m EBITDA 8
Pathology Year ended Six months Year ended 30 June 2009 31 Dec 2009 30 June 2010 Trading Revenue 720.7 737.4 363.5 EBITDA 135.3 145.2 73.4 EBITDA Margin (%) 18.8 19.7 20.2 2 nd ■ round of Federal Govt Medicare rebate cuts effective 1 November 2009 – Estimated annual adverse impact of approx $45m in revenue and EBITDA (Pro ‐ rata FY2010 adverse impact of approx $30m in revenue and EBITDA) ■ Unusually flat/down industry volumes and accompanying revenue – “Noise” surrounding various industry private billing initiatives – Decline in rate of referral per doctor visit ■ Collection centre deregulation post 1 July 2010 likely to increase both industry volumes and costs 9
Imaging Year ended Year ended Six months 30 June 2010 30 June 2009 31 Dec 2009 Trading Revenue 289.1 314.4 147.1 EBITDA 42.6 54.8 23.0 EBITDA Margin (%) 14.7 17.4 15.6 ■ Revenue/EBITDA and margins impacted by – Increased competition – The pricing impact of competition (increased bulk ‐ billing) – Industry cost increases ■ Efficiency gains are anticipated in FY2011 as a result of – Improvements in productivity – Labour and IT efficiencies 10
Health Technology Year ended Year ended Six months 30 June 2010 30 June 2009 31 Dec 2009 Trading Revenue 46.4 49.4 24.1 EBITDA 20.0 16.8 9.7 EBITDA Margin (%) 43.1 34.0 40.2 ■ EBITDA increase to $20m with increased margin to 43.1% ■ Renewal rates high for all software products ■ High margin products have offset lower margin knowledge resource revenues ■ Transactional revenues showing good growth 11
Corporate Year ended Year ended Six months 30 June 2010 30 June 2009 31 Dec 2009 Revenue 9.8 7.3 3.2 Expenses (19.1) (9.7) (8.1) EBITDA (9.3) (2.4) (4.9) ■ Revenue includes: – Profit on sale of investments – Distribution from Pan liquidators – Interest income ■ Expenses include: – Non cash option expense $1.6m – Higher than usual legal fees FY2010 12
Balance Sheet As at 30 June 2010 31 Dec 2009 30 June 2009 Current Assets (excluding Cash) 181 190 189 Goodwill & Intangibles 3,075 3,001 2,968 Non ‐ Current Assets 414 413 399 Total Assets 3,670 3,604 3,556 Net Debt (Debt less Cash) 979 969 1,210 Other Current Liabilities 171 151 183 Non ‐ Current Liabilities 50 38 46 Total Liabilities 1,200 1,158 1,439 Total Equity 2,470 2,446 2,117 Gearing Ratio (Net Debt/Net Debt + Equity) 28.4 28.4 36.3 13
Debt Position 30 June 2010 $m Secured Syndicated Facility 900 Secured Working Capital Facility 100 Bilateral Facilities 95 Total Syndicated Facilities 1,095 Net Debt at 30 June 2010 979 ■ Primary has extended its secured facilities for three years to December 2012 – Syndication well supported and simplified banking group now in place – Margin will be 2.50% to 3.00% above BBSY, dependent on gearing ratios ■ Primary currently considering Retail Bond issue – Funds raised would repay bank debt and diversify funding 14
Outlook ■ Medical Centres – 15% EBITDA Growth benchmark for FY2011 – Backfilling of centres with GP and other services, new centre rollout to continue ■ Pathology – Further incremental cost savings – Aggressively competing for revenue ■ Imaging – Productivity and service improvements via fee for service model and connectivity ■ Health Technology – Extending scope of dominant products and E Health transactions ■ Underlying drivers of healthcare demand remain strong ■ Return to more normal patterns of demand hard to determine precisely ■ Primary expects to achieve the lower range of its FY2011 earnings guidance of $360m EBITDA 15
Important Notice The information provided in this presentation is based on the ordinary earnings of Primary Health Care Limited (the Company) as disclosed in the Appendix 4E released to the ASX on 17 August 2010. It contains certain forward-looking statements. The words “expect”, “forecast”, “estimate”, “anticipate” and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, the Company’s future earnings, financial position and performance are also forward-looking statements which speak only as of the date they are made. Such forward-looking statements are not guarantees of the Company’s future performance and involve risks, uncertainties and other factors which could cause actual results to differ materially from those expressed or implied in such statements including, but not necessarily limited to: regulatory, business, competitive and economic uncertainties and risks. The information in this presentation is provided for information purposes only and does not take into account the investment objectives, financial situation and needs of any particular investor. No representation, warranty or assurance (express or implied) is given or made in relation to any underlying assumption or that any forward-looking statement will be achieved. Subject to any continuing obligations under applicable law or the listing rules of the ASX, the Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements in this presentation. 16
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