Healius Limited · ASX:HLS
Healius — Primary Health Care — Macquarie Securities Conference 2007
19 slides from Healius's conference presentation, May 2, 2007
Slide 1: Primary Health Care Ltd
Primary Health Care Ltd Macquarie Securities 2 May 2007 James Bateman Chief Operating Officer
Slide 2: Primary Health Care
Primary Health Care 1. Proven Model + 2. Scaleable + 3. Competitive Advantage + 4. Favourable Industry Conditions + 5. Large Market = 6. Significant Opportunity
Slide 3: Proven Model
Proven Model • Community based health care services – Large multi-specialty medical centres (>80 medical professionals in established centres) – Co-ordinate the delivery of all out-of-hospital health care services – Including GPs, specialists, day surgery, pharmacy, pathology, radiology, occupationa
Slide 4: Proven Model: Campbelltown Medical & Dental Centre
Proven Model • Community based health services – Campbelltown Medical & Dental Centre – Opened 2000 – ~ 13,000 GP consults per month – Consultant Specialists/Para- medical – Diagnostic Imaging (CT, U/S, BMD, etc) – Pathology Collection
Slide 5: Three Business Segments: Medical Centres
Proven Model • Three Business Segments – Medical Centre and associated • Multiple businesses within each centre • Growth from a single centre in 1986 to current 34 – NSW/ACT = 22 – S.A. =4 – Vic =5 – Qld =3 • Contribute $69.7m EBITDA to group in FY06 ($39.1m 1H07) • Circa 4 million general practitio
Slide 6: Three Business Segments: Pathology and Health Technology
Proven Model • Three Business Segments – Pathology • > 1.5m episodes in current year • > 100 ACC in current year • Main lab in North Ryde, 8 labs interstate/STAT • EBITDA of $14m contribution in FY06 ($7m in 1H07) – Health Technology • First Investment in DDI Health, purchase of HCN in Jan 2005 • Le
Slide 7: Key Benefit to Patients
Proven Model • Key Benefit to Patients – Primary manages and co-ordinates the delivery of those various services to: – Deliver Key Benefit to Patients • Broad range of medical services available under one roof • Highly accessible, community based • Competitively priced • The standard of care in the
Slide 8: Key Benefit to Providers
Proven Model • Key Benefit to Providers – Primary manages and co-ordinates the delivery of those various services to: – Deliver Key Benefit to Medical Providers • Evidence suggests pre-tax doctors income improvement circa 30% in year one upon relocation into centres and improving thereafter • Capita
Slide 9: Key Benefit to Payor / Government
Proven Model • Key Benefit to Payor / Govt. – Primary manages and co-ordinates the delivery of those various services that results in delivery of Key Benefit to Govt. • Health delivery, cost of service and accessibility consistently ranks in top 2 or 3 voter issues. • Aging population and technologi
Slide 10: Scaleable: EBITDA and Centre Growth
+ Scaleable • EBITDA – EBITDA 5yr historical compound growth at ~ 33% Centre Growth vs EBITDAGrowth 35 100,000 – EBITDA EBITDA excl invest ($'000s) 90,000 30 Medical Centres Open improvement 80,000 25 70,000 driven by same 20 60,000 centre performance 50,000 Medical Centres (Brookvale ~20 yrs) 15 40
Slide 11: Scaleable: Operating Margins
+ Scaleable • Operating Margins Demonstrably Scaleable – Medical Centre EBITDA margins in EBITDA Margins (%) centres improving – vs infrastructure and 60.0 scale associated 50.0 with interstate 40.0 expansion Pathology 30.0 Medical Centres 20.0 – Pathology margins under pressure 10.0 because of star
Slide 12: Scaleable: Normalised NPAT
+ Scaleable • Normalised NPAT – EBITDA growth PRYNormalisedNPAT rates generating similar bottom line 60,000 growth rates ~ 35% p.a. 50,000 40,000 – “Normalised” = $(000's) remove impact of 30,000 goodwill 20,000 amortisation 10,000 0 FY01 FY02 FY03 FY04 FY05 FY06
Slide 13: Scaleable: Return on Equity
+ Scaleable • Shareholders funds Utilisation – Shareholders funds generating improving post-tax income Return On Equity (NPAT/Equity) – Debt to equity 14 historically stable at 12 30% 10 Percent 8 6 4 2 0 FY02 FY03 FY04 FY05 FY06
Slide 14: Scaleable: Earnings Per Share
+ Scaleable • Earnings to Shareholders Earnings Per Share (cents) – Earnings per Share growth reflective of 45 traction of model 40 35 – EPS in recent years 30 shows that centre roll 25 out at historical rates 20 can be funded without 15 requirement to issue 10 stock 5 0 1999 2000 2001 2002 2003 200
Slide 15: Competitive Advantage
+ Competitive Advantage • Know How & Learning Curve – Considerable progression by company “down the learning curve” able to bring centres to cashflow positive within 3 to 4 months versus 6 to 18 months historically – able to achieve superior returns than imitators – Further establishment of support
Slide 16: Large Potential Market
+ Large Potential Market • Considerable Nationwide opportunity – Primary Health Care accounts currently for Estimated Market Share based on approximately 4% Medicare Consultation Item Numbers of the nationwide market – Current Primary Health Care successfully able IPN/Sonic to run medical Symbion ce
Slide 17: Opportunity
= Opportunity • A scaleable skillset and model – Proven capability to expand into new and diverse geographic areas (On target to have 40 Medical Centres operational by end of CY07) – Proven capability to simultaneously further improve existing centres – A model that offers significant economies of s
Slide 18: Opportunity: Health Care IT Traction
= Opportunity • Health Care IT - signs of traction – HCN & Tyro Bank to jointly provide online patient claiming and medicare refunds • Integration of claiming with doctor’s practice software - an Australian First - answering call from doctors and AMA • Patients no-longer have to attend Medicare offi
Slide 19: Questions and Answers?
Questions and Answers?
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