Opportunity Full year financial results 2018 Page 3 Large - - PowerPoint PPT Presentation

Opportunity

Full year financial results 2018 Page 3

Large hospitals vs day hospitals

Full year financial results 2018 Page 4 52.53% 47.24% 17.54% 47.47% 52.76% 82.46% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Australia USA South Africa Day Hospitals General Hospitals

The danger

Full year financial results 2018 Page 5

Our SA healthcare system is in crisis mode Medical schemes paid R51.4-billion to hospitals - 9.36% increase on the previous year. HMI found that the conduct of some of the healthcare stakeholders has an adverse effect on competition. Stakeholders interact with one another in an imperfect environment with a lack of transparency which harms competition. Medical aids and administrators continue to pay more for cases where there is a SMART alternative. Medical scheme premiums will not be sustainable going forward. Everyone lacks information to direct patients for best possible treatment in terms of cost and expected outcomes.

The danger continues

Full year financial results 2018 Page 6

Specialists feel uncomfortable to move cases from larger hospitals to day hospitals. This could be due to : Pressures from large hospitals to bring more cases convenience, consulting room privileges, threat of large hospital recruiting another specialist Larger hospitals focus on length of stay – day hospitals focus on theatre cases. Mindset of “Why worry, the medical aid pays” We keep quiet and carry on as we always do…

Insanity: “Doing the same thing over and

• ver again and expecting

different results.” Albert Einstein

Full year financial results 2018 Page 7

The big 3 groups are dominating the market

The danger continues

Growth Opportunities

Full year financial results 2018 Page 8

South Africa was NOT ripe and ready for the day hospital market previous years, the time is NOW AHSA - increase in activity levels across the board during the last financial year and every discipline is showing an increase in numbers Most hospitals within Advanced reached and improved on previous best theatre cases East Rand only joined our group in February Harbour Bay in Simonstown opening soon with specialists already committed to theatre slots

More opportunities

Full year financial results 2018 Page 9

Same day surgery today has expanded into more than dental and minor procedures Due to enhanced technology – more procedures can be performed in a day hospital Definite increase in doctors moving same-day cases to day hospitals in general Channelling of appropriate care will take place from medical funders If majority of surgery abroad takes place in a day hospital – why not in SA?

@ Advanced Health

Full year financial results 2018 Page 10

Doctors build a trust relationship with the staff in a day hospital – small, unique set-up and doctors appreciate the effective turn-around, no wait, no fuss Wards and theatres are in close proximity to each

• ther and child friendly environment

Theatre-lists are on time , convenient hours, state-

• f-art equipment

At AHSA - no red-tape on decision making Day hospitals are not utilised to the fullest potential it offers.

@ Advanced Health

Full year financial results 2018 Page 11

Advanced health case mix dominates with general and laparoscopic surgery cases, then

• phthalmology, orthopaedic, maxilla-facial and
• dental. Cosmetic, ear-nose-throat surgery, urology,

gynaecology are on the increase. Day hospitals offer convenience to patients - less waiting time – fast and effective Fast effective admissions , short stay and quick discharge Should a case complicate, the patient is transfer to an acute hospital and same specialist continues with the treatment in the larger hospital.

Danger vs Opportunity

Full year financial results 2018 Page 12

DANGERS

3 groups = 90% of hospital admissions SA has one of the most expensive pvt systems in the world Over- servicing Fraud, waste, corruption in private sector (R22 billion per annum : 7-15% of expenditure) Infection (increase stay in hospital and risk to healthier patients)

OPPORTUNITY

Day hospitals utilized between 7 – 14% Day hospital costs can bring down healthcare costs Limited chances of over servicing Limited fraud, waste and corruption due to short procedures Limited chances of infection due to short stay

Danger vs Opportunity

Full year financial results 2018 Page 13

DANGERS

Auxiliary services add costs to an event based

• n SID – Supply Induce Demand

Pathology and radiology units add costs to an event – SID – Supply Induce Dea Mindset and incentives are on longer stay in hospital (PPD) Patients do not have the ability to choose

OPPORTUNITY

Limited use of auxiliary services Rarely have these units on site in a day hospital Doctors have to discharge – behaviour change Patients must have the right to choose

Change is inevitable

Full year financial results 2018 Page 14

At Advanced Health, we are well aware of the dangers in our healthcare system BUT we recognise the OPPORTUNITY for day hospitals – the one aspect that can make a difference. Join the drive for day hospitals

De La Vie Durbanville East Rand Groenkloof Knysna Worcester Soweto Medgate Panorama Vergelegen Harbour Bay

Highlights

309 109 409 290

2018 2017

Revenue

23 027 40 089

2018 2017

32%

EBITDAR

2018 2017

Patient numbers

• 21.74 cent
• 14.12 cent

2018 2017

Loss per share Net borrowing (cash flow)

74% 41% 35% 18%

78 506 64 684

2018 2017

• 19 574

5 772

2018 2017

Cash generated from operations

Positive

Full year financial results 2018 Page 16

Exchange rate fluctuations

It is impossible to forecast the exchange rate due to the current fluctuations in the currency market. Average rate for the year is 9.97. Year end closing rate is 10.14.

Description Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Average rate 9.74 9.83 10.35 10.56 10.58 10.56 10.38 10.26 10.38 10.43 10.07 9.97 Closing rate 9.79 11.24 11.53 11.13 10.54 9.86 9.94 9.93 10.61 9.64 9.05 10.14

Exchange rate : ZAR to AUD

Full year financial results 2018 Page 17

Number of cases per quarter

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Number of cases Quarter

Number of cases per quarter

Presmed Australia Advanced Health South Africa Total Cases AVL

Total increase in patient numbers of 41% compared to the previous financial year.

Full year financial results 2018 Page 18

Group statement of financial position as at 30 June 2018

₁ The increase in property, plant and equipment is due to capital expenditure, mostly due to the establishment of new clinics:

• expenditure of R 10.8 mil was incurred for Coffs Day Hospital

(“Coffs”); and

• expenditure of R 5.0 mil was incurred for Madison Day

Surgery (“MDS”), both in Australia. For Advanced East Rand Day Hospital (“East Rand”), situated in Boksburg, the capital expenditure amounts to R 15.0 mil.

• Medgate refurbishments amounting to R 3.8 mil.

₂ Goodwill relates to the purchase of MDS to the value of AUD 850k (R 8.4mil) on the 1st of July 2017.Total increase in goodwill is AUD 320k (R 3.1mil).

with MDS to the value of R 7.5 mil.

Epping Property Trust.

under review.

that were established/acquired.

increase in revenue generated from greenfield and organic expansion. Full year financial results 2018 Page 19 Jun'18 Jun'17 Reviewed Audited R'000 R'000 Assets Non-current Assets 418 273 349 700 Property, plant and equipment ₁ 282 744 251 184 Goodwill ₂ 30 185 26 597 Intangible assets 3 33 520 28 458 Operating lease asset 478 1 240 Other financial assets 4 10 586 5 894 Deferred taxation 5 60 760 36 327 Current Assets 96 709 88 640 Inventories 6 13 958 10 038 Trade and other receivables 7 33 393 26 576 Other financial assets 4 2 298 5 777 Operating lease asset 5 634 5 412 Current tax receivable 107 354 Cash and cash equivalents 41 319 40 483 Total Assets 514 982 438 340

Group statement of financial position as at 30 June 2018- continue

Jun'18 Jun'17

'Reviewed

Audited R'000 R'000 Equity and Liabilities Capital and reserves 193 831 141 875 Stated capital ₁ 221 956 137 378 Foreign currency translation reserve 34 363 28 898 Retained earnings (64 368) (28 417) Share based payment reserve 1 880 4 016 Non-controlling interest ₂ 53 459 43 507 Total Equity 247 290 185 382 Non-current Liabilities 170 084 184 738 Other financial liabilities ₃ 127 495 142 630 Finance lease obligations 19 497 25 408 Operating lease liability 22 101 16 320 Provisions ₄ 991

• Deferred tax
• 380

Current Liabilities 97 608 68 220 Other financial liabilities ₃ 18 239 13 630 Finance lease obligations 18 718 8 820 Trade and other payables ₅ 45 919 36 658 Provisions ₄ 7 366 3 645 Current tax liability 5 000 2 326 Operating lease liability 2 366 3 141 Total Equity and Liabilities 514 982 438 340

84.5 mil after issue related costs.

• f R 16.7 mil was raised through a shareholders loan. Additional

shares issued in PMA fully subscribed for by non-controlling shareholders resulting in the dilution of AVL shareholding by 3.8%.

not settled in cash, but converted into shares. The total number of shares issued was 58.4 mil, amounting to R 75.9 mil. In South Africa additional shareholders loans of R 48.1 mil were raised as well as loans from finance institutions of R 11.9 mil. In Australia additional loans of R 14.1 mil were raised.

• f employees of PMA.

for the new facilities (MDS, Coffs and East Rand). Full year financial results 2018 Page 20

Group statement of profit or loss and other comprehensive income for the year ended 30 June 2018

Revenue increased with 32% compared to the previous year. Gross profit increased from 50% to 51%. Other operating costs, rental and depreciation increased due to new facilities becoming

• perational in South

Africa and Australia. Decrease in the loss after taxation of 25%.

Full year financial results 2018 Page 21

Group statement of cash flow for the year ended 30 June 2018

Cash generated by operations of R 5.8 mil compared to cash utilised of R 19.5 mil for the previous year. Cash outflow to the value of R 54.1 mil due to capital expenditure for the newly established clinics both in South Africa and Australia. Cash outflow of R 8.4 mil due to the acquisition of Madison. Issue of new shares in Australia as well as the rights issue in South Africa resulted in an inflow of cash resources of R 20.2 mil. Net cashflow from loans indicating the company is becoming less dependent on external loans due to the increase in cash generated from operating activities. Total available cash balance in Rand value on par with the previous year’s balance.

Full year financial results 2018 Page 22

• Financial assets advanced

• Financial assets repaid

• Financial liabilities repaid

Group statement of changes in equity for the year ended 30 June 2018

New shares through the rights issue in August 2017 settled via a loan account and in cash.

Full year financial results 2018 Page 23

• (48 176)

• (11 482)
• (279)

• 2 342
• 2 342

• 2 867

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

• 43 507

• (39 588)

• 5 465
• 1 035

• 1 501
• 1 501

• 84 578

• 11 532

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

• 53 459

Key financial ratios Reviewed June 2018 Audited June 2017

0.85 0.99 58% 1.15 1.30 81% Quick ratio Current ratio Net debt less cash to equity ratio

Full year financial results 2018 Page 24

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

Australia (PMA) South Africa Group T

• tal

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

• f total

291 860 7 544 71% 29% 117 430 (42 758) 409 290 (36 245) 100% Corporate

• (1 031)

Segmental report for the year ended 30 June 2018

Full year financial results 2018 Page 25

29 Aug 2018

Strictly Private & Confidential

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

PRESMED

AUSTRALIA

GROUP OF

DAY HOSPITALS

PMA Overview

PMA Group of Day Hospitals

PMA is a management company that specialises in the establishment and management of day hospitals in Australia. Being in operation for over 20 years, PMA has built a strong and trusted name in the industry. The Presmed Day Hospital Group consists of 5 day hospitals, and 1 laser vision clinic, all based in NSW:

NSW WA SA VIC QLD NT TAS

DAY HOSPITALS

5

NSW

• Chatswood Private Hospital
• Epping Surgery Centre
• Central Coast Surgery Centre
• Madison Day Surgery
• Coffs Day Hospital
• Laser Vision Clinic (management)

+ 1 LASER VISION CLINIC

Full year financial results 2018 Page 28

Specialties:

Ophthalmology

Specialties:

Ophthalmology

Specialties:

Ophthalmology

Specialties:

Ophthalmology

Specialties:

Ophthalmology ; OMF

Specialties:

Ophthalmology ; ENT; OMF; Dental

PMA Overview

PMA Group of Day Hospitals

2 theatres

1 procedure room

14

Accredited Surgeons

1 theatre 3

Accredited Surgeons

2 theatre 14

Accredited Surgeons

6 theatres

1 procedure room

95

Accredited Surgeons

1 theatre 5

Accredited Surgeons

1 Laser Room 1

Accredited Surgeon Central Coast Day Hospital Epping Surgery Centre Chatswood Private Hospital Laser Vision Clinic Central Coast Coffs Harbour Day Hospital Madison Day Surgery

Full year financial results 2018 Page 29

PMA Overview

5

day

hospitals

12

• perating

theatres

15,111 127

accredited

surgeons

patient

surgeries

1

laser vision

clinic

PMA Group Overview

The PMA Group of day hospitals currently has 12 operating theatres, with 127 accredited surgeons. The Group’s revenue is in excess of $29m with over 15,000 patient surgeries. The consolidated group EBITDA has grown from $2.4m in FYE 2017 to $3.6m in FYE 2018.

teaching

hospital

Affiliated with

THE UNIVERSITY OF

SYDNEY

as a

group

93

patient

satisfaction %

Full year financial results 2018 Page 30

Strategic Focus

growth in patient volume when compared to the last year, with 15,111 patients surgeries across the Group.

44%

new Day Hospitals – MDS and COFFS – were acquired by PMA within this financial year.

2

reduction in cost of sales per patient when compared to the last financial year. *

• 5.2%

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.

new surgeons have joined the group within this financial year FYE 2018.

37

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

3 2 1

How have Management achieved this during FYE18

PMA Key Strategic Focus

Full year financial results 2018 Page 31

Strategic Focus

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

3 2 1

Management are focusing on introducing co-associated disciplines such as skin biopsies, dermatology and pain management, where capital expenditure is minimal. Management, with the support of

• ur surgeons, are in the process of

formulating the standardisation of surgical supplies and lenses to reduce our consumable costs. Management have identified several opportunities within the Australian day hospital industry and remain in communication with the owners of these day hospitals. How will Management implement this during FYE19

PMA Key Strategic Focus

33

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

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.

Full year financial results 2018 Page 34