GROUP RESULTS YEAR ENDED 30 SEPTEMBER 2014 Date: 14 November 2014 - - PowerPoint PPT Presentation

GROUP RESULTS YEAR ENDED 30 SEPTEMBER 2014

Date: 14 November 2014

2

AGENDA

Operational Review

André Meyer CEO

Financial Review

Pieter van der Westhuizen CFO

Outlook

André Meyer CEO

3

HIGHLIGHTS

GROUP

Previous years’ numbers where used for comparative purposes have been restated for changes in accounting standards. Normalised earnings exclude non-trading related items such as profit/loss on disposal of assets and businesses and associated costs.

Revenue +10.2% R13 046m Normalised EBITDA +8.2% R3 611m Normalised EPS +12.0% 168.6 cents Dividend +11.9% 141.0 cps TO TO TO TO

4

HIGHLIGHTS

GROUP

GROWTH EFFICIENCY QUALITY SUSTAINABILITY

Operational Review

5

HIGHLIGHTS

GROUP SA growth

• PPD growth

2.0%

• New beds

249

SA Efficiency

• Occupancy

71.9%

• Normalised

EBITDA margin 27.9%

Max Healthcare efficiency:

• Occupancy

77.0%

• Normalised

EBITDA margin 9.9%

• Normalised EBITDA

margin : Apr – Sept 10.7%

International growth

• Concluded shareholding equalisation with Max India
• Strong H2 operational performance from MHC
• Entered Polish market through acquisitions of

Scanmed Multimedis, Weiss Clinic and Gastromed

GROWTH EFFICIENCY

Operational Review

6

HIGHLIGHTS

GROUP

• 94 specialised nurses

recruited from India

• 888 nurses graduated
• 1 400 students enrolled

for 2015

• Continued improvement

in clinical outcomes

QUALITY SUSTAINABILITY

Operational Review

7

SA: GROWTH

PPDS

1 400 1 600 1 800 2 000 2 200 2012 2013 2014 PPDs (000) 2.7% 2.0% Bed growth 292 95 249

Operational Review

8

SA: GROWTH

ACUTE BEDS

• Majority of H2 beds added in August/September
• Continued focus on increasing ICU beds
• Broad based growth to take advantage of areas with strong demand

Category H1 2014 H2 2014 Total beds Capacity expansion at existing facilities 142 107 249 Bed breakdown Number

• f beds

Number

• f hospitals

ICU/HC beds General beds H1 142 9 37 105 H2 107 7 14 93 Total 249 16 51 198

Operational Review

9

SA: GROWTH

ACUTE BED PIPELINE

• Acquisition subject to CC approval – expect decision early 2015:

− Operational beds: 50 − Licenced beds: 125

• Strong pipeline of acute beds – consistent growth
• Good transition from Applications pending to Approved beds
• Retained focus on brownfield growth
• Approved: received Health department licence approval. In the process of obtaining Municipal approvals before commencing building
• Applications pending: awaiting approval from the Health departments for bed applications made

Category 2014 2015 Approved beds* Applications pending Capacity expansion at existing facilities 249 148 561 339 New facilities

• 94

300 88 Acquisition

• 50
• Total

249 292 861 427

Operational Review

10

SA: GROWTH

COMPLEMENTARY BUSINESS Redefined our New lines of business as our Complementary businesses:

Mental Health 6 facilities 386 beds Acute Rehabilitation 7 facilities 319 beds Renal Dialysis 14 facilities 178 Stations Oncology 1 Radiosurgery and Chemotherapy unit at Life Vincent Pallotti

361 444 556 200 400 600 2012 2013 2014 R m Complementary revenue CAGR 24.1% 2012 2013 2014 Renal treatments CAGR 40.0%

Operational Review

11

SA: GROWTH

COMPLEMENTARY BUSINESS PIPELINE

• Renal dialysis business continues to show good growth
• Adding a Radiosurgery and Chemotherapy Oncology centre to the new Life Hilton hospital
• Considering expanding the Oncology product into other major metropols
• Approved: received Health department licence approval. In the process of obtaining Municipal approvals before commencing building
• Applications pending: awaiting approval from the Health departments for bed applications made.

Category 2014 2015 Approved beds* Applications pending Mental Health

• 61

249 Acute Rehabilitation

• 15

50 Total

• 76

299 Renal stations 56 34 Oncology units 1 unit 2 units

Operational Review

12

SA: GROWTH

GROUP BUSINESS PIPELINE

• Approved: received Health department licence approval. In the process of obtaining Municipal approvals before commencing building
• Applications pending: awaiting approval from the Health departments for bed applications made.

Category 2014 2015 Approved beds* Applications pending Capacity expansion at existing facilities 249 148 561 339 New facilities

• 94

300 88 Acquisition

• 50
• Mental Health
• 61

249 Acute Rehabilitation

• 15

50 Total 249 292 937 726 Renal stations 56 34 Oncology units

• 1 unit

2 units

Operational Review

13

SA: EFFICIENCY

EFFECTIVE USE OF ASSETS

71,2% 71,7% 71,9%

64% 66% 68% 70% 72% 74% 2012 2013 2014

<60% 60-69% 70-79% 80%+ <60% 60-69% 70-79% 80%+

Beds 70%+

• ccupancy

63%

Beds 70%+

• ccupancy

64% ICU occupancy: 77%

Group Occupancy

Bed growth 292 95 249

2012: Bed occupancy split 2014: Bed occupancy split 21% 42% 24% 13% 23% 41% 22% 14%

Operational Review

14

SA: EFFICIENCY

EFFECTIVE USE OF ASSETS

* Complementary business includes Mental Health and Acute Rehabilitation in the occupancy calculation.

71,3 71,5 71,5 69,2 72,2 76,7 71,2 71,7 71,9

64 68 72 76 80 2012 2013 2014 Occupancy split between Acute and Complementary occupancy* Acute occupancy Complementary occupancy Group occupancy

Bed growth 158 134 292 75 20 95 249

• 249

Operational Review

15

SA: EFFICIENCY

EBITDA MARGIN – CONTINUING BASIS

• Increase in Surgical cases negatively impacted margin
• No bed growth in Mental Health and Acute Rehabilitation also negatively impacted the margin
• Strong management of cost of sales procurement despite Rand weakness

26,6% 28,2% 27,9%

20% 22% 24% 26% 28% 30% 2012 2013 2014

Operational Review

16

EFFICIENCY

IMPROVING AFFORDABILITY OF CARE Cost of Care project:

• Key project in driving healthcare efficiency -

focus on the entire cost of a hospital event

• Continuation of efficiency drive to reduce the

cost of healthcare

Blood Gas project:

• Completed blood gas roll-out
• Financial benefits are shared with medical

schemes

• R50m of savings will be passed back to

members of medical schemes in 2015

10 000 20 000 30 000 40 000 Jan Feb Mar Apr May Jun Jul Aug Sept Number of tests

Operational Review

17

EFFICIENCY

IMPILO RE-ENGINEERING

2011-2013 Deployed and completed:

• Patient administration
• Case management
• Accommodation billing
• e-Pharmacy dispensing
• e-Theatre billing (pilot)

2014

• e-Ward billing
• e-Claims
• Inventory management
• Accounts receivable
• Debt management

2015 National rollout of complete HIS system 2016 Clinical information systems (CIS)

2015 Focus

• Reducing cost of care
• Reducing administrative burden
• Improving staff, doctor and

patient satisfaction

• Re-engineering current

manual processes

• Leveraging off

new technology

Operational Review

18

SA: QUALITY

MEASURING CLINICAL OUTCOMES

Outcome Sep 2014 Outcome Sep 2013 Standard Patient incident rate 2.88 3.24 Per 1 000 PPDs HAI (Healthcare Associated Infection) 0.44 0.51 Per 1 000 PPDs VAP (Ventilator Associated Pneumonias) 1.91 2.69 Per 1 000 VAP days SSI (Surgical Site Infections) 0.76 0.74 Per 1 000 theatre cases CLABSI (Central Line Associated Blood Stream Infections) 0.85 0.83 Per 1 000 central line days CAUTI (Catheter-related Urinary Tract Infections) 0.40 0.57 Per 1 000 catheter days FIM/FAM score 1.14 1.14 >0.9 MHQ14 efficiency (average gain/PPD) 2.39 >1.6 1 2 3 4 5 VAP SSI CLABSI CAUTI Patient incident rate 2012 2013 2014

Operational Review

19

SA: SUSTAINABILITY

REGULATORY ENVIRONMENT

Competition Commission (CC) Healthcare Market Inquiry

• Recap:

− Inquiry will entail an in-depth analysis of the healthcare industry with a focus on the drivers of healthcare costs − Conduct a regulatory impact assessment − Make recommendations on appropriate policy and regulatory mechanisms − Make recommendations with regards to competition policy

• LHC has made a detailed submission on the subject matter of the Inquiry
• Next steps:

− 1 March to 30 April 2015: Public hearings − 1 May to 31 July 2015: Analysis and targeted public hearings and information requests

Operational Review

20

INTERNATIONAL: MAX HEALTHCARE

OVERVIEW

Max Healthcare:

• In July announced shareholding equalisation:

− increasing shareholding to 46.25% from 26% − R1.35bn cost − Concluded on 10 November 2014

• In line with the Company’s growth strategy in India
• The transaction concluded through a 50% primary issue of new MHC shares

and a 50% secondary acquisition of MHC shares held by Max India. The primary issue will be used to reduce debt and to fund further expansion

• LHC has joint control of MHC with Max India
• A Transformation office has been set-up to manage key operational projects
• A strong performance since March 2014 in terms of capacity growth, revenue

and EBITDA margin improvement

Operational Review

21

INDIA: MHC

BED GROWTH

Bed capacity Operational beds Sep 2014 Operational beds Mar 2014 Operational beds Sep 2013 Phase 1 Hospitals 1 080 1 079 1 066 1 040 Phase 2 Hospitals Shalimar Bagh 288 185 158 150 Mohali 204 203 179 141 Bathinda 205 80 59 56 Dehradun 201 130 109 89 Total new 898 598 505 436 Combined total 1 978 1 677 1 571 1 476 106 additional beds opened

Beds as of 30 September 2014

301 beds still to be operational

Operational Review

22

INDIA: MHC

OCCUPANCY

Bed capacity Operational beds 30 Sep 2014 Occupancy Sep 2014 Phase 1 Hospitals 1 080 1 079 78% Phase 2 Hospitals Shalimar Bagh 288 185 79% Mohali 204 203 71% Bathinda 205 80 76% Dehradun 201 130 73% Total new 898 598 75% Combined total 1 978 1 677 77%

Beds as of 30 September 2014 Weighted occupancy

Operational Review

23

INTERNATIONAL: POLAND

SCANMED ACQUISITION

• In April 2014 agreed the purchase of 80.7% of Scanmed Multimedis
• Scanmed acquisition has given LHC an ideal entry into the Polish

market given its strong management team and leading brand

Operational Review

24

INTERNATIONAL: POLAND

SCANMED ACQUISITION Outpatient services:

• Primary Healthcare:

− Registered population – 129 000 people at end of 2013 − Highly-profitable structure of registered PHC population groups with the lowest medical loss ratio

• Medical centres:

− 28 centres in 11 locations; facilities with treatment rooms, including rehabilitation center, dentistry and psychiatry − Diagnostic services

Inpatient services: − St. Raphael Hospital

› High tech, newly built hospital NHF contract › Strategic location – the only twenty-four-hour, multi-profile hospital in the southern part of Krakow

Locations of Scanmed medical centres

Operational Review

Operational Review

25

INTERNATIONAL: POLAND

SCANMED

• Exciting opportunity for consolidation in the Polish healthcare market
• Our strategy is to establish a comprehensive network of facilities covering all

major cities and disciplines in Poland

• Since the initial acquisition:

− Acquired the balance of shares in Scanmed − Acquired: › Weiss Clinic: » 22 bed Ophthalmology facility › Gastromed: » An 8 bed Gastroenterology centre in the Lublin region − In the final stages of a transaction to acquire a 46 bed orthopaedic hospital − In the due diligence stage regarding a leading healthcare provider

26

AGENDA

André Meyer CEO

Operational Review

André Meyer CEO

Financial Review

Pieter van der Westhuizen CFO

Outlook

André Meyer CEO

27

HIGHLIGHTS

GROUP

Previous years’ numbers where used for comparative purposes have been restated for changes in accounting standards. Normalised earnings exclude non-trading related items such as profit/loss on disposal of assets and businesses and associated costs.

Financial Review

Revenue +10.2% R13 046m Normalised EBITDA +8.2% R3 611m Cash generated from operations R3 516m EPS +62.3% 267.5 cents Normalised EPS +12.0% 168.6 cents Dividend +11.9% 141.0 cps TO TO TO TO TO

28

HIGHLIGHTS

GROUP – CONTINUING BASIS

Continuing:

• Excludes revenue from discontinued/disposed businesses
• Includes revenue from Poland – acquired 80.7% of Scanmed Multimedis on 16 April 2014

Previous years’ numbers where used for comparative purposes have been restated for changes in accounting standards. Normalised earnings exclude non-trading related items such as profit/loss on disposal of assets and businesses and associated costs.

Financial Review

Revenue +10.2% R13 046m Revenue - continuing +10.7% R12 989m Normalised EBITDA +8.2% R3 611m Normalised EBITDA - continuing +8.6% Normalised EPS +12.0% 168.6 cents TO TO TO TO TO R3 597m Normalised EPS – excluding Poland +12.7% 169.7 cents TO

29

FINANCIAL RESULTS

GROUP

• JMH sold in February 2014

Attributable earnings is defined as earnings attributable to ordinary shareholders

Change % 30 Sep 2014 Rm 30 Sep 2013 restated Rm Revenue 10.2 13 046 11 834 Normalised EBITDA 8.2 3 611 3 337 Normalised EBITDA margin 27.7% 28.2% Operating profit 42.4 4 093 2 874 Associates and Joint Ventures (44.3) 39 70 Attributable earnings 58.2 2 796 1 767 Associates and Joint Ventures JMH (58.2) 41 98 MHC 68.6 (11) (35) Joint Ventures and Other 28.6 9 7

Financial Review

30

FINANCIAL RESULTS

GROUP SEGMENTAL REVIEW

Change % 30 Sep 2014 Rm 30 Sep 2013 restated Rm Revenue 10.2 13 046 11 834 SA Hospital division 9.1 12 007 11 001 Healthcare services 4.0 864 831 Other

• 2

International Poland 175

• Operating profit before amortisation, profit on

disposals and impairment of intangible assets 9.0 3 256 2 987 SA Hospital division 11.4 2 905 2 607 Healthcare services (19.2) 135 167 Other 213 213 International Poland 3

• Financial

Review

31

NORMALISED EBITDA

GROUP

Change % 30 Sep 2014 Rm 30 Sep 2013 restated Rm Normalised EBITDA 8.2 3 611 3 337 Discontinued operations (14) (26) Normalised continuing EBITDA 8.6 3 597 3 311 Southern Africa 8.2 3 581 3 311 Poland 16

• Financial

Review

32

FINANCIAL RESULTS

SOUTH AFRICA

Continuing revenue excludes the revenue from closed and disposed businesses

Change % 30 Sep 2014 Rm 30 Sep 2013 restated Rm Revenue 8.8 12 871 11 834 Continuing revenue 9.2 12 814 11 731 Normalised EBITDA 7.7 3 595 3 337 Continuing EBITDA 8.2 3 581 3 311 Normalised EBITDA margin 27.9% 28.2% Continuing EBITDA margin 27.9% 28.2%

Financial Review

33

FINANCIAL RESULTS

SOUTH AFRICA: SEGMENTAL REVENUE

Hospital division:

• PPD growth:

2.0%

• Revenue/ppd:

7.1% − Tariff impact: 6.6% − Case Mix: 0.5%

• Complementary revenue growth:

25.2% HCS division:

• Growth in continuing revenue:

10.2%

• Growth in Occupational Health:

17.5% Change % 30 Sep 2014 Rm 30 Sep 2013 restated Rm Revenue 8.8 12 871 11 834 SA Hospital division 9.1 12 007 11 001 Healthcare services 4.0 864 831 Other – 2

Financial Review

34

FIVE YEAR REVIEW

SOUTH AFRICA: CONTINUING

• Consistent growth in revenue – Group benefiting from faster growth in the complementary business
• Continued improvement in efficiencies assisted growth in normalised EBITDA

* Hospital revenue includes other revenue

8 049 9 000 9 816 10 553 11 448 565 596 657 734 809 172 216 361 444 556 2010 2011 2012 2013 2014 Revenue (R m)* Hospital HCS Complementary

CAGR: 9.9%

2 164 2 535 2 886 3 311 3 581 2010 2011 2012 2013 2014 Normalised EBITDA (R m)

CAGR: 13.4%

Financial Review

35

FINANCIAL RESULTS

INDIA: MAX HEALTHCARE – REVENUE GROWTH

Financial year-end: March Total net revenue excludes revenue from the SBU 1 Rs. Crore = R1.8 million

Net Revenue (Rs Crore) LHC 2013 LHC 2014 Change % Net Revenue – Phase 1 hospitals 1 010 1 142 13.1 Net Revenue – Phase 2 hospitals 229 388 69.4 Net Revenue total 1 239 1 530 23.5

248 256 245 261 267 275 294 306 43 49 59 79 81 88 105 114 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Phase 1 Phase 2 LHC 2013: 1 239 Rs Crore LHC 2014: 1 530 Rs Crore

Financial Review

36

33 32 25 33 33 36 37 41

• 8
• 12
• 8
• 1
• 2
• 3

4 5 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Phase 1 Phase 2

EBITDA (Rs Crore) 2013 2014 Change % EBITDA – Phase 1 hospitals 123 147 19.5 EBITDA – Phase 2 hospitals (29) 4 EBITDA total 94 151 60.6 EBITDA margin – Phase 1 hospitals 12.2 12.9 EBITDA margin – total hospitals 7.6 9.9

FINANCIAL RESULTS

INDIA: MAX HEALTHCARE – EBITDA GROWTH

Financial year-end: March EBITDA Total – operations excludes a once-off 3 Rs. Crore negative impact 1 Rs. Crore = R1.8 million

LHC 2013: 94 Rs Crore LHC 2014: 151 Rs Crore

Financial Review

37

33 32 25 33 33 36 37 41

• 8
• 12
• 8
• 1
• 2
• 3

4 5 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Phase 1 Phase 2

FINANCIAL RESULTS

INDIA: MAX HEALTHCARE – EBITDA GROWTH

Financial year-end: March EBITDA Total – operations excludes a once-off 3 Rs. Crore negative impact 1 Rs. Crore = R1.8 million

EBITDA (Rs Crore) H1 14 H1 15 Change % EBITDA – Phase 1 hospitals 58 79 36.2 EBITDA – Phase 2 hospitals (9) 9 EBITDA total - operations 49 88 79.6 EBITDA margin – Phase 1 hospitals 11.5 13.2 EBITDA margin – total hospitals 7.6 10.7

H1 14: 49 Rs Crore H1 15: 88 Rs Crore

Financial Review

38

FINANCIAL RESULTS

POLAND

Financial Review

30 Sep 2014 Rm Revenue 175 EBITDA 16 Attributable loss (17)

• Total investment:

R621 million

• Performance is in line with expectations for the period

39

FINANCIAL RESULTS

GROUP

Change % 30 Sep 2014 Rm 30 Sep 2013 restated Rm EPS 62.3 267.5 164.8 Impairment of property, plant and equipment 0.1 – Profit/loss on sale of assets, associates and businesses (89.7) (0.4) Gain on bargain purchase (0.1) – Loss on derecognition of finance lease – 0.4 HEPS 7.9 177.8 164.8 Profit after tax of businesses sold (5.1) (11.5) Gain on derecognition of finance lease – (1.5) Retirement funds (1.7) (1.2) Transaction cost 1.5 – Fair value gain on foreign exchange hedge contract (3.9) – Normalised EPS 12.0 168.6 150.6 Normalised EPS excl Poland 12.7 169.7 150.6

Financial Review

40

CASH GENERATED VS NORMALISED EBITDA

2 233 2 562 3 041 3 422 3 516 103% 101% 103% 103% 97% 2010 2011 2012 2013 2014 R000m Cash generated vs normalised EBITDA Cash generated from operations Cash generated as % of normalised EBITDA

Financial Review

41

FINANCIAL RESULTS CAPEX

• Excludes capex spent on acquisitions

157 204 111 210 650 752 2013 2014 R000m Capex upgrades expansion Capex maintenance Repairs & maintenance

• 249 acute new beds
• 94 bed Life Hilton hospital WIP
• Life Claremont relocation
• Life St Mary’s relocation
• Capex on maintenance and equipment
• Laundry
• Repairs & maintenance but not included under capex

+ 30% +16% + 89%

42

SUMMARISED STATEMENT OF FINANCIAL POSITION

ASSETS

Proceeds from the sale of our 49.3% in JMH:

• Payment of a special dividend – 100cps
• R300 million being utilised for investment opportunities

Total beds owned by LHC: 87% Movement 30 Sep 2014 Rm 30 Sep 2013 restated Rm Non-current assets 1 351 9 700 8 349 PPE 1 384 5 901 4 517 Intangibles 234 2 318 2 084 Other (267) 1 481 1 748 Current assets (excl. cash) 368 1 691 1 323 Cash 125 422 297 Total assets 1 844 11 813 9 969

Financial Review

43

SUMMARISED STATEMENT OF FINANCIAL POSITION

EQUITY AND LIABILITIES

Movement 30 Sep 2014 Rm 30 Sep 2013 restated Rm Total shareholders’ equity 294 5 900 5 606 Non-current liabilities 759 2 909 2 150 Interest bearing borrowings 687 2 344 1 657 Other non-current liabilities 72 565 493 Current liabilities 791 3 004 2 213 Total equity and liabilities 1 844 11 813 9 969 Net debt (as per covenants) 1 039 3 084 2 045 Net debt to normalised EBITDA (covenant 2.75x) 0.84 0.63 Unsecured borrowings 762 1 385 623 Secured borrowings 13 85 72 IFRS debt 3 597 594 Preference shares 820 820 Debt in Poland 464 464

• Net cash on hand

203 (267) (64)

Financial Review

44

DIVIDEND

• Cover calculated on normalised EPS excluding amortisation
• Future dividend growth will be line with normalised SA EPS growth

Distributions Cents/share R million % of normalised EBITDA Cover* Interim 2012 45 469 34.2 1.47 Final 2012 60 625 40.7 1.34 Total 2012 105 1 094 37.6 1.39 Interim 2013 54 563 36.4 1.39 Final 2013 72 750 42.1 1.32 Total 2013 126 1 313 39.4 1.35 Interim 2014 63 657 37.7 1.38 Final 2014 78 813 43.6 1.22 Total 2014 141 1 470 40.7 1.29

Financial Review

Special dividend 100 1 042

45

FIVE YEAR REVIEW

DIVIDENDS

2014 Dividend numbers exclude the special dividend of 100 cps Normalised EPS excluding amortisation Future dividend growth will be line with normalised SA EPS growth

1,92 1,50 1,39 1,35 1,29 24,9 34,7 37,6 39,4 40,7 2010 2011 2012 2013 2014 Cover % EBITDA 92,7 119,3 141,1 150,6 168,6 52 85 105 126 141 2010 2011 2012 2013 2014

• Dividend cover:

1.29 times

• % of EBITDA:

40.7%

• Normalised EPS CAGR:

16.1%

• Normalised DPS CAGR:

28.3%

Financial Review

46

AGENDA

Financial Review

Pieter van der Westhuizen CFO

Operational Review

André Meyer CEO

Outlook

André Meyer CEO

Future guidance

47

OUTLOOK

SOUTH AFRICA Acute Hospitals:

• 292 beds:
• 148 Brownfield
• 94 Greenfield
• 50 Acquisition

Complementary Business:

• 34 renal stations
• 1 Oncology unit

Focus on improving affordability

• Cost of Care project

Continue to drive efficiency programmes across the Group:

• Cost of sales management
• Impilo programme

Outlook

GROWTH EFFICIENCY

Future guidance

48

OUTLOOK

SOUTH AFRICA

• Continued focus on improving clinical
• utcomes
• Introduction of a patient experience

programme

• Focused doctor retention and recruitment

programme

• 1 400 nursing students enrolled for 2015
• Focus on management development and

staff retention

Outlook

QUALITY SUSTAINABILITY

Future guidance

49

OUTLOOK

INTERNATIONAL

Continued focus on driving revenue and improving EBITDA margins Increase bed capacity number in Phase 2 hospitals

• Additional 301 beds

Focus on brownfield expansion – 2017 goal:

• Patparganj:

150 beds

• Mohali:

85 beds

• Saket:

150 beds

Continued focus on driving revenue and improving EBITDA margins To establish a comprehensive network of healthcare facilities covering all major cities and disciplines in Poland :

• In the final stages of a transaction to acquire a 46 bed
• rthopaedic hospital
• In the due diligence stage regarding a leading healthcare

provider

Future Guidance

Outlook

INDIA POLAND

THANK YOU

APPENDICES

52

GLOSSARY OF TERMS

Approved Received Health department licence approval. Have not commenced building ICU Intensive care unit ARM Alternative reimbursement model MHQ 14 Mental Healthcare questionnaire 14 Attributable earnings Earnings attributable to ordinary shareholders NHI National Health Insurance CAUTI Catheter-related urinary tract infections Normalised EBITDA Operating profit plus depreciation, amortisation of intangible assets, impairment of intangible assets as well as excluding profit/loss on disposal of assets and businesses and associated costs CC Competition Commission NLB New lines of business – acute rehabilitation, mental health and renal dialysis and oncology CLABSI Central line associated bloodstream infections LOH Life Occupational Healthcare EBITDA Earnings before interest, taxes, depreciation and amortisation PPD Paid patient day FIM/FAM Functional Independence measure Functional assessment measure SSI Surgical site infections HAI Health associated infections VAP Ventilator associated pneumonia HEPS Headline earnings per share WIP Work in progress beds

53

SHAREHOLDING

0% 10% 20% 30% 40% 50% 60% SA N America UK Europe Rest Sep 13 Sep 14

54

SA: MACRO ENVIRONMENT

MEDICAL SCHEMES MARKET

• Number of privately insured lives continues to

grow, but at a slower rate – around 1%

• Disease burden and aging continues to drive

healthcare utilisation

• Demand for quality private healthcare remains

0% 1% 2% 3% 4% 5% 6% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Asthma Coronary Artery Disease Diabetes Mellitus Type 2 Hyperlipidaemia Diabetes Mellitus Type 1 Cardiac Failure Epilepsy Hypothyroidism Dysrhytmias Chronic Obstructive Pulmonary Disease Chronic Renal Disease Rheumatoid Arthritis HIV

2 000 4 000 6 000 8 000 10 000 1999 2006 2007 2008 2009 2010 2011 2012 2013

Beneficiaries (000) Incidence of chronic diseases of lifestyle among LHC admissions

55

SA: QUALITY

NEW INITIATIVES

• Patient reported outcomes measures (Proms)

− Proms programme introduced in 2013 − Measures quality from the patient perspective, initially covering hip and knee replacements − The programme will be rolled out by 2015

• Anti-microbial Stewardship (AMS)

− Implemented a multi-disciplinary approach to AMS in all acute care hospitals − A significant investment made in an electronic infection control management solution that is currently being piloted in two hospitals

• VTE risk assessment and prophylaxis

− The VTE Risk Assessment and Prophylaxis programme is now fully implemented in the Acute Rehabilitation facilities − Successfully piloted and audited in six acute hospitals and will be rolled out in 2015

• Vermont Oxford Network (VON)

− VONs are currently available in seven Life Healthcare hospitals and will be rolled out to the remainder of the group’s significant maternity units by 2016

56

INTERNATIONAL: INDIA

OVERVIEW

Strong demand

• Healthcare revenue in India is set

to reach US$160 billion by 2017; expenditure is likely to expand at a CAGR of 15.2% over 2011-17

• Rising incomes, greater health

awareness, lifestyle diseases & increasing access to insurance will contribute to growth

2011

Market value: US$68.4 billion

2017F

Market value: US$160 billion

Quality and affordability

• Availability of a large pool
• f well-trained medical

professionals in the country

• India has an advantage over

its peers in the West and Asia in terms of cost of high-quality medical services offered

Attractive opportunities

• Investment in healthcare

infrastructure is set to rise, benefiting both “hard” (hospitals) and “soft” (R&D, education) infrastructure

• Medical tourism is emerging as one
• f the most lucrative investment

areas in the country

Policy support

• The government aims

to develop India as a global healthcare hub

• Policy support in the form of

reduced excise and customs duty and exemption in service tax

• Initiatives like NRHM would boost

healthcare in rural areas

ADVANTAGE INDIA

57

INTERNATIONAL: POLAND

OVERVIEW

4,3% 1,9% 1,4% 2,9% 3,3% 3,5% 3,6% 3,7% 4,3% 3,7% 1,0% 1,9% 2,2% 2,2% 2,3% 2,6% 2011 2012 2013 2014 2015 2016 2017 2018 GDP growth CPI 28 29 31 33 35 37 39 3,6% 6,9% 6,5% 6,1% 5,7% 5,4% 2009A 2010A 2011A 2012A 2013E 2014E 2015E Value (PLN bn) Growth rate % GDP and CPI for Poland, 2011-2018F Polish private healthcare market growth, 2009-2015E

• Poland is the largest CEE country, with a population
• f 39m
• Poland has shown solid economic growth over the

last decade on the back of a large domestic market

• Private healthcare market is forecast to continue to

grow as demand increases together with ability to pay for services

• The Polish private healthcare market is highly

fragmented with little corporatisation of inpatient care

Operational Review

Key drivers of healthcare market growth

Growth in healthcare spending Ageing population Increasing wealth

• f society

Medical technological advancements

58

INTERNATIONAL: POLAND

SCANMED

Scanmed’s Multimedis Inpatient care 44%

Core line Supporting line

Scanmed’s medical offer Share of total revenue Payer Share of funding NHF 69% Private payer 31% Diagnostic imaging 6% NHF 50% Private payer 50% Specialist care 26% NHF 20% Private payer 80% Holiday and night care, medical transport 5% NHF 38% Private payer 62% Primary health care 17% NHF 91% Private payer 9% NHF 56% Private payer 42%

59

INTERNATIONAL: SCANMED

ST RAPHAEL HOSPITAL

• 130 beds with over 10,000 different surgical procedures performed annually
• 25% of hospital patients come from Scanmed’s outpatient business line
• Inpatient care covers: neurosurgery, general surgery, orthopaedics, plastic surgery, ophthalmology,
• ncology, urology, anaesthesiology and intensive care, emergency admission
• ±69% of provided services were financed from NFZ, private services generated ±31% of revenue

Operational Review

60

INTERNATIONAL: SCANMED

WEISS CLINIC

• One of the leading ophthalmic centers with 22 beds
• Company operates in Chorzów and Gliwice
• Specialises in laser vision correction, the treatment of cataract and other ophthalmic diseases, as well

as procedures in plastic surgery

• ±30% of services financed from NFZ, private services generated approximately over 60% of revenue

(mainly individuals and also customers of insurance companies and medical centers)

Operational Review

61

INTERNATIONAL: SCANMED

GASTROMED

• Leader of gastroenterology in the region of Lublin with 8 beds
• Range of services: endosonography, capsule endoscopy, DGHAL procedures, double-balloon

enteroscopyl, liquid based CellPrep cytology

• The largest contract with the NFZ in the region of Lublin for the gastrological ambulatory, endoscopic

examinations and one day hospitalisation

• ±62% of provided services were financed from NFZ, private services generated ±16% of revenue

Operational Review