Healius Limited · ASX:HLS
Healius — Primary Health Care — Debt Investor Presentation (August 2010)
27 slides from Healius's debt investor presentation, Aug 24, 2010
Slide 1: Primary Bonds Series A
Primary Bonds Series A Presentation to brokers and institutional investors 24 August 2010
Slide 2: Important Notice
Important Notice You must read the following notices before reading or making any use of this document or any information contained in this document. By continuing to read, use or otherwise act on this document, you agree to be bound by the following terms and conditions, including any modifications
Slide 3: Offer Summary
Offer Summary ■ Summary of Primary Bonds – Primary (ASX: PRY) is seeking to raise approximately $125m from the issue of Primary Bonds Series A – Primary Bonds Series A are the first securities to be offered utilising ASIC Class Order [10/321] – Primary Bonds Series A are new five year unsecured debt
Slide 4: Summary of Primary Bonds Series A
Summary of Primary Bonds Series A Primary Bonds Primary Bonds Series A are unsecured debt obligations of Primary Health Care Limited. Series A Offer Size $125m with the ability to raise more or less. Interest Mandatory interest payments each quarter. Interest = 90 day BBSW + 4.00% Assuming the 90 da
Slide 5: Features of Primary Bonds Series A
Features of Primary Bonds Series A Mandatory Regular Mandatory interest on Primary Bonds Series A paid quarterly in arrears. Interest Payments Attractive Rate Of Assuming the 90 day BBSW is 4.73%, the initial interest rate would be 8.73% p.a. Interest Bullet Maturity Mandatory repayment of $100 issu
Slide 6: Purpose of and Rationale for issuing Primary Bonds Series A
Purpose of and Rationale for issuing Primary Bonds Series A ■ Purpose of the Offer: – Primary intends to use the proceeds raised from this Offer to repay part of its existing loan facilities. – 50% of the proceeds raised will be used to partially repay term debt owing under Primary’s Secured Syndica
Slide 7: Ranking of Primary Bonds Series A
Ranking of Primary Bonds Series A ■ Ranking: – Primary Bonds rank equally with Primary’s other unsecured and unsubordinated debt obligations. – Primary Bonds rank behind any secured debt obligation of Primary, including its existing bank debt. – Primary Bonds Series A will rank ahead of the ordinary
Slide 8: Healthcare Industry Overview
Healthcare Industry Overview ■ The healthcare industry in Australia is relatively non-cyclical with key industry trends indicating continued growth in demand. Key factors which are likely to influence the Australian healthcare industry over the medium term include the following: – Population demogra
Slide 9: Primary Overview
Primary Overview ■ Primary is one of Australia’s leading listed healthcare companies. Primary was established in 1985 and has been listed on ASX since 1998. Primary offers a broad range of medical and related services throughout its network of medical centres, diagnostic imaging and pathology facili
Slide 10: Financial Summary
Financial Summary FY2010 FY2009 Revenue ($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 10
Slide 11: Outlook
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 ser
Slide 12: Operating cash flow
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 Operati
Slide 13: Balance Sheet
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 Liabi
Slide 14: Primary's Existing Debt Facilities and Debt Maturities
Primary’s Existing Debt Facilities and Debt Maturities Amount expected to Amount drawn be drawn down down as at the after Offer proceeds Facility Facility maturity date of this Second (assuming $125 Loan limit date Part Prospectus million is raised) Secured Syndicated $900m December 2012 $900m $837.
Slide 15: Key Financial Metrics
Key Financial Metrics Gearing Ratio Pro forma gearing ratio as at 30 June 2010 0.491 Interest Cover Pro forma interest cover ratio for the year ended 30 June 2010 of 5.021 Working Capital Pro forma working capital ratio as at 30 June 2010 1.161 Ratio 1 Assumes A$125m of Primary Bonds Series A are is
Slide 16: Key Risks
Key Risks ■ Risks associated with Primary Bonds Series A include: – The market price of Primary Bonds may fluctuate; – The interest rate will fluctuate over time with movements in the 90 day BBSW; – Primary may be unable to pay interest or to repay all or any of the money owed on Primary Bonds on ti
Slide 17: Key Risks
Key Risks ■ Risks associated with investing in Primary, include: – Primary’s businesses operate in a highly regulated and constantly changing industry and there is a risk of significant changes to current or future healthcare programs, laws and regulations that could be detrimental to Primary; and –
Slide 18: Offer Structure
Offer Structure Institutional Offer Institutional Investors who have been invited by the Joint Lead Managers to bid for Primary Bonds Series A through the bookbuild Broker Firm Offer Open to all Australian resident clients of a Syndicate Broker who apply for a firm Allocation from that Syndicate Bro
Slide 19: Indicative Timetable
Indicative Timetable Key Dates for the Offer Lodgement of Base Prospectus and Second Part Prospectus with ASIC 24 August 2010 Bookbuild 31 August 2010 Opening Date 1 September 2010 Closing Date for Shareholder Offer and General Offer 5.00pm 21 September 2010 Closing Date for Broker Firm Offer 10.00a
Slide 20: Syndicate Contacts
Syndicate Contacts Joint Arrangers & Joint Lead Managers Damian Pretty +61 3 9631 9801 Mike Saba +61 3 9631 9813 Nicholas Chaplin +61 2 9237 9518 Anthony Teasdale +61 2 9237 1670 Joint Lead Managers Mozammel Ali +61 2 8258 1845 Peter Molesworth +61 2 8258 1692 Michael Hughes +61 2 8216 6710 Conrad A
Slide 21: Appendix
Appendix 21 PRIMARY
Slide 22: Segment analysis
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 1,2
Slide 23: Medical Centres
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 ser
Slide 24: Medical Centres – underlying organic growth
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 Volum
Slide 25: Pathology
Pathology Year ended Year ended Six months 30 June 2010 30 June 2009 31 Dec 2009 Trading Revenue 720.7 737.4 363.5 EBITDA 135.3 145.2 73.4 EBITDA Margin (%) 18.8 19.7 20.2 ■ 2nd round of Federal Govt Medicare rebate cuts effective 1 November 2009 – Estimated annual adverse impact of approx $45m in r
Slide 26: Imaging
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) – Indu
Slide 27: Health Technology
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
Primary Health Care — Debt Investor Presentation (August 2010) on 6ix