EBOS GROUP LIMITED — Interim / Quarterly Report 2014

Feb 18, 2014

==> picture [277 x 154] intentionally omitted <==

----- Start of picture text -----

EBOS GROUP LIMITED
INTERIM REPORT
2014
----- End of picture text -----

EBOS GROUP LIMITED
INTERIM REPORT 2014
CONTENTS	Page
Summary of Financial Highlights	1
Shareholder Calendar	1
Auditor’s Report	2
Condensed Consolidated Income Statement	3
Condensed Consolidated Statement of Comprehensive Income	4
Condensed Consolidated Statement of Changes in Equity	4
Condensed Consolidated Balance Sheet	5
Condensed Consolidated Cash Flow Statement	6
Notes to the Interim Financial Statements	7
Directory	19

EBOS GROUP LIMITED INTERIM REPORT 2014 SUMMARY OF FINANCIAL HIGHLIGHTS

Six months 31 Dec 13 $’000 (Unaudited) Six months 31 Dec 12 $’000 (Unaudited)	Year ended 30 Jun 13 $’000 Audited
Revenue 3,001,512 755,250 EBITDA 96,247 27,230 Profit before income tax expense 69,347 20,828 Profit for the period 49,409 14,959 Shareholders’ interest 961,131 215,903 Earnings per share 34c 25c* Interest cover 5.5 6.0 Net interest bearing debt to net interest bearing debt plus equity 26.7% 30.8% Net asset backing per share 651c 410c	1,823,169 58,243 42,214 28,207 304,877 47c* 5.4 36.3% 465c

‘* Earnings per share for comparative periods has been adjusted for the bonus share element included in the rights issue of 5 July 2013, as required by International Financial Reporting Standards. This is to allow a direct like for like comparison of the current period earnings per share with comparative periods.

SHAREHOLDER CALENDAR

Release of half year result Interim dividend record date Interim dividend payable Release of full year result Final dividend payable Annual General Meeting

19 February 2014 14 March 2014 4 April 2014 Late August 2014 Late October 2014 31 October 2014

1

REVIEW REPORT TO THE SHAREHOLDERS OF EBOS GROUP LIMITED

We have reviewed the condensed consolidated interim financial statements on pages 3 to 18. The condensed consolidated interim financial statements provide information about the past financial performance of the EBOS Group Limited and its financial position as at 31 December 2013. This information is stated in accordance with the accounting policies referred to on page 7.

This report is made solely to the company’s shareholders, as a body. Our review has been undertaken so that we might state to the company’s shareholders those matters we are required to state to them in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company’s shareholders as a body, for our engagement, for this report, or for the opinions we have formed.

Board of Directors’ Responsibilities

The Board of Directors is responsible for the preparation, in accordance with New Zealand law and generally accepted accounting practice, of the condensed consolidated interim financial statements which give a true and fair view of the financial position of the Group as at 31 December 2013 and of the results of operations and cash flows for the six months ended on that date.

Independent Accountant’s Responsibilities

We are responsible for reviewing the condensed consolidated interim financial statements presented by the Board of Directors in order to report to you whether, in our opinion and on the basis of the procedures performed by us, anything has come to our attention that would indicate that the condensed consolidated interim financial statements do not present fairly the matters to which they relate.

Basis of Opinion

A review is limited primarily to enquiries of company personnel and analytical review procedures applied to financial data and thus provide less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

We have reviewed the condensed consolidated interim financial statements of EBOS Group Limited for the six months ended 31 December 2013 in accordance with the Review Engagement Standards issued by the External Reporting Board.

Other than in our capacity as auditors under the Companies Act 1993, the provision of due diligence work, internal control assurance services and other advisory services we have no relationship with or interests in EBOS Group Limited or any of its subsidiaries.

Opinion

Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial statements on pages 3 to 18 do not present fairly the financial position of the Group as at 31 December 2013 and the results of operations and cash flows for the six months ended on that date in accordance with NZ IAS 34: Interim Financial Reporting and IAS 34: Interim Financial Reporting.

Our review was completed on 18 February 2014 and our review opinion is expressed as at that date.

==> picture [89 x 46] intentionally omitted <==

Chartered Accountants Christchurch, New Zealand

2

EBOS GROUP LIMITED CONDENSED CONSOLIDATED INCOME STATEMENT For the Six Months ended 31 December 2013

Notes Six months 31 Dec 13 $’000 (Unaudited) Six months 31 Dec 12 $’000 (Unaudited)	Year ended 30 Jun 13 $’000 (Audited)
Revenue 2(a) 3,001,512 755,250 Profit before depreciation, amortisation, finance costs and income tax expense 96,247 27,230 Depreciation 2(b) (5,187) (2,171) Amortisation of finite life intangibles 2(b) (6,162) (91)	1,823,169 58,243 (4,922) (1,514)
Profit before finance costs and tax 84,898 24,968 Finance costs 2(b) (15,551) (4,140)	51,807 (9,593)
Profit before income tax expense 2(b) 69,347 20,828 Income tax expense (19,938) (5,869)	42,214 (14,007)
Profit for theperiod 49,409 14,959	28,207
Earnings per share Basic (cents per share) 34 25 Diluted (cents per share) 34 25	47 47

Calculated on a weighted average basis of the number of shares on issue.

3

EBOS GROUP LIMITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the Six Months ended 31 December 2013

Six months 31 Dec 13 $’000 (Unaudited) Six months 31 Dec 12 $’000 (Unaudited)	Year ended 30 Jun 13 $’000 (Audited)
Profit for the period 49,409 14,959 Other comprehensive income Items that may be reclassified subsequently to profit or loss: Cash flow hedges gains/(losses) 404 (485) Related income tax (137) 144 Translation of foreign operations (20,695) (329)	28,207 2,773 (359) (6,365)
Total comprehensive income net of tax 28,981 14,289	24,256

EBOS GROUP LIMITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the Six Months ended 31 December 2013

Notes Six months 31 Dec 13 $’000 (Unaudited) Six months 31 Dec 12 $’000 (Unaudited)	Year ended 30 Jun 13 $’000 (Audited)
Equity at start of period 304,877 208,601 Profit for the period 49,409 14,959 Other comprehensive income: Movements in cashflow hedge reserve 267 (341) Movement in foreign currency translation reserve (20,695) (329) Dividends paid to company shareholders 4 (21,992) (10,682) Shares issued 3 649,265 3,695	208,601 28,207 2,414 (6,365) (21,298) 93,318
Equity at end ofperiod 961,131 215,903	304,877

4

EBOS GROUP LIMITED CONDENSED CONSOLIDATED BALANCE SHEET As at 31 December 2013

Notes 31 Dec 13 $’000 (Unaudited) 31 Dec 12 $’000 (Unaudited)	30 Jun 13 $’000 (Audited)
Current assets Cash and cash equivalents 92,580 41,782 Trade and other receivables 755,396 178,149 Prepayments 7,269 2,912 Inventories 505,835 162,248 Current tax refundable 1,401 1,575 Other financial assets – derivatives 2,630 35	198,014 736,429 7,837 558,350 1,628 3,546
Total current assets 1,365,111 386,701	1,505,804
Non-current assets Property, plant and equipment 98,437 22,053 Capital work in progress 693 191 Prepayments - 348 Deferred tax assets 28,936 6,357 Goodwill 721,046 180,422 Indefinite life intangibles 56,941 30,867 Finite life intangibles 82,067 269 Investment in associates 22,620 18,838	95,131 787 16 34,361 722,158 59,324 95,145 19,013
Total non-current assets 1,010,740 259,345	1,025,935
Total assets 2,375,851 646,046	2,531,739
Current liabilities Trade and other payables 874,358 263,147 Finance leases 968 411 Bank loans 7 176,560 9,001 Current tax payable 19,615 4,219 Employee benefits 22,460 8,021 Other financial liabilities – derivatives 1,668 870 Deferredpurchase consideration - -	892,645 1,189 215,675 6,378 25,725 2,872 865,000
Total current liabilities 1,095,629 285,669	2,009,484
Non-current liabilities Bank loans 7 262,641 127,273 Trade and other payables 9,605 4,113 Deferred tax liabilities 40,073 10,784 Finance leases 2,566 1,034 Employee benefits 4,206 1,270	151,357 8,489 48,365 3,296 5,871
Total non-current liabilities 319,091 144,474	217,378
Total liabilities 1,414,720 430,143	2,226,862
Net assets 961,131 215,903	304,877
Equity Share capital 3 850,553 111,665 Foreign currency translation reserve (26,370) 361 Retained earnings 134,685 104,636 Cash flow hedge reserve 2,263 (759)	201,288 (5,675) 107,268 1,996
Total equity 961,131 215,903	304,877

5

EBOS GROUP LIMITED CONDENSED CONSOLIDATED CASH FLOW STATEMENT For the Six Months ended 31 December 2013

Notes Six months 31 Dec 13 $’000 (Unaudited) Six months 31 Dec 12 $’000 (Unaudited)	Year ended 30 Jun 13 $’000 (Audited)
Cash flows from operating activities Receipts from customers 2,927,400 751,727 Interest received 1,461 446 Payments to suppliers and employees (2,855,278) (738,896) Taxes paid (8,460) (8,239) Interestpaid (15,551) (4,140)	1,917,358 1,198 (1,869,090) (13,458) (9,593)
Net cash inflow from operating activities 5 49,572 898 Cash flows from investing activities Sale of property, plant & equipment 476 437 Purchase of property, plant & equipment (15,485) (1,129) Payments for capital work in progress - (182) Payments for intangible assets (631) (83) Acquisition of associates (2,988) - Acquisition of subsidiaries (366,853) - Costs associated with acquisition of subsidiaries - -	26,415 403 (2,943) (778) (142) - 49,263 (5,993)
Net cash (outflow)/inflow from investing activities (385,481) (957) Cash flows from financing activities Proceeds from issue of shares 3 151,119 3,695 Proceeds from borrowings 317,716 2,700 Repayment of borrowings (211,011) (6,044) Dividendspaid to equityholders ofparent 4 (21,992) (10,682)	39,810 93,318 30,009 (21,474) (21,298)
Net cash inflow/(outflow) from financing activities 235,832 (10,331) Net (decrease)/increase in cash held (100,077) (10,390) Effect of exchange rate fluctuations on cash held (5,357) (167) Net cash and cash equivalents at beginning of period 198,014 52,339	80,555 146,780 (1,105) 52,339
Net cash and cash equivalents at end of period 92,580 41,782	198,014
Cash and cash equivalents 92,580 41,782	198,014
92,580 41,782	198,014

6

EBOS GROUP LIMITED NOTES TO THE INTERIM FINANCIAL STATEMENTS For the Six Months ended 31 December 2013

1. FINANCIAL STATEMENTS

These unaudited interim financial statements have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand (“NZ GAAP”). They comply with New Zealand Equivalent to International Accounting Standard 34 (NZ IAS 34) “Interim Financial Reporting” and International Accounting Standard IAS 34, as applicable for profit orientated entities.

The same accounting policies and methods of computation are applied in the interim financial statements as were applied in the financial statements for the year ended 30 June 2013. These financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report for the year ended 30 June 2013. The information is presented in thousands of New Zealand dollars unless otherwise stated.

2. PROFIT FROM OPERATIONS

(a) (b)	Six months 31 Dec 13 $’000 (Unaudited) Six months 31 Dec 12 $’000 (Unaudited)	Year ended 30 Jun 13 $’000 (Audited)
	Revenue Revenue from the sale of goods 2,955,281 753,378 Revenue from the rendering of services 44,770 1,308 Management fees - 118 Interest revenue 1,461 446	1,811,465 10,506 - 1,198
	3,001,512 755,250	1,823,169
	Profit before income tax expense Profit before income tax has been arrived at after crediting/(charging) the following gains and losses from operations: Gain on sale of property, plant and equipment 286 227 Change in fair value of derivative financial instruments (115) 79 Share of profits of associates 619 410 Profit before income tax has been arrived at after (charging) the following expenses by nature: Cost of sales (2,701,778) (656,945) Write-down of inventory (1,550) (1,280) Finance costs: Bank interest (15,229) (3,863) Other interest expense (322) (277)	170 257 585 (1,597,475) (2,227) (8,979) (614)
	Total finance costs (15,551) (4,140) Net bad and doubtful debts arising from: Impairment loss on trade & other receivables (1,249) (357) Depreciation of property, plant & equipment (5,187) (2,171) Amortisation of finite life intangibles (6,162) (91) Operating lease rental expenses: Minimum lease payments (12,993) (4,788) Donations (41) (30) Employee benefit expense (97,585) (33,750) Defined contribution plan expenses (5,576) (1,259) Costs associated with acquisition of subsidiaries - - Other expenses (85,283) (30,327)	(9,593) (14) (4,922) (1,514) (9,227) (29) (76,213) (2,927) (5,993) (71,833)
	Total expenses (2,932,955) (735,138)	(1,781,967)
	Profit before income tax expense 69,347 20,828	42,214

7

EBOS GROUP LIMITED NOTES TO THE INTERIM FINANCIAL STATEMENTS (Continued) For the Six Months ended 31 December 2013

3. 4.	SHARE CAPITAL Six months 31 Dec 13 (Unaudited) Six months 31 Dec 12 (Unaudited) No. ’000 Total $’000 No. ’000 Total $’000	SHARE CAPITAL Six months 31 Dec 13 (Unaudited) Six months 31 Dec 12 (Unaudited) No. ’000 Total $’000 No. ’000 Total $’000	Year ended 30 Jun 13 (Audited) No. ’000 Total $’000
	Fully paid ordinary shares Balance at beginning of period 65,546 201,288 52,107 107,970 Dividend re-invested – October 2012 - - 429 3,445 April 2013 - - - - October 2013 996 9,500 - - Bonus issue – June 2013 - - - - Institutional placement – June 2013 - - - - Share issue costs - - - - Rights issue - July 2013 Share issue costs Issue of consideration shares – July 2013 Share issue costs 22,941 - 58,127 - 149,119 (7,356) 498,146 (144) - - - - - - - - Issue of shares to executives and staff under employee share ownershipscheme - - 63 250		52,107 107,970 429 3,445 357 3,100 - - 1,999 - 10,591 90,026 - (3,503) - - - - - - - - 63 250
	147,610 850,553 52,599 111,665 DIVIDENDS Six months 31 Dec 13 (Unaudited) Six months 31 Dec 12 (Unaudited) Cents per share Total $’000 Cents per share Total $’000		65,546 201,288 Year ended 30 Jun 13 (Audited) Cents per share Total $’000
		Recognised amounts Fully paid ordinary shares - Final – prior year 15.0 21,992 20.5 10,682 - Taxable bonus issue - - - - - Interim – currentyear - - - -	20.5 10,682 - 1,411 17.5 9,205
		15.0 21,992 20.5 10,682 Unrecognised amounts Final dividend - - - - Interim dividend 20.5 30,260 17.5 9,205	38.0 21,298 15.0 21,992 - -
		20.5 30,260 17.5 9,205	15.0 21,992

The Board approved an interim dividend of 20.5 cents per share on 18 February 2014. The record date for the dividend is 14 March 2014 and the dividend will be paid on 4 April 2014. The Group’s dividend reinvestment plan will be operable for this interim dividend.

8

EBOS GROUP LIMITED NOTES TO THE INTERIM FINANCIAL STATEMENTS (Continued) For the Six Months ended 31 December 2013

5. NOTES TO THE CASH FLOW STATEMENT

Six months 31 Dec 13 $’000 (Unaudited) Six months 31 Dec 12 $’000 (Unaudited)	Year ended 30 Jun 13 $’000 (Audited)
Reconciliation of profit for the period with cash flows from operating activities Profit for the period 49,409 14,959 Add/(less) non-cash items: Depreciation 5,187 2,171 Gain on sale of property, plant & equipment (286) (227) Share of profits of associates (619) (410) Amortisation of finite life intangibles 6,162 91 Loss/(gain) on derivatives/financial instruments 115 (79) Deferred tax (2,901) 1,264 Provision for doubtful debts (156) (125)	28,207 4,922 (170) (585) 1,514 (257) 12 (441)
7,502 2,685	4,995
Movements in working capital: Trade and other receivables (18,811) (2,312) Prepayments 584 1,475 Inventories 52,515 749 Current tax refundable/payable 13,464 (3,609) Trade and other payables (17,171) (12,231) Employee benefits (4,930) (473) Foreign currency translation of opening working capital balances (32,990) (345)	(560,276) (3,118) (395,353) (1,503) 621,643 21,832 (6,421)
(7,339) (16,746)	(323,196)
Cash costs classified as investing activities: Costs associated with acquisition of subsidiaries - - Working capital items acquired - -	5,993 310,416
Net cash inflow from operating activities 49,572 898	26,415

9

EBOS GROUP LIMITED NOTES TO THE INTERIM FINANCIAL STATEMENTS (Continued) For the Six Months ended 31 December 2013

6. SEGMENT INFORMATION

(a) Products and services from which reportable segments derive their revenues The Group’s reportable segments are:

Healthcare: Incorporates the sale of human healthcare products in a range of sectors, own brands, retail healthcare and wholesale activities.

Animal care: Incorporates the sale of animal care products in a range of sectors, own brands, retail and wholesale activities.

Corporate: Includes net funding costs and parent company central administration expenses that have not been allocated to the healthcare or animal care segments.

(b) Segment revenues and results

The following is an analysis of the Group’s revenue and results by reportable segment:

	Six months 31 Dec 13 $’000 (Unaudited)	Six months 31 Dec 12 $’000 (Unaudited)		Year ended 30 Jun 13 $’000 (Audited)
Revenue from external customers Healthcare Animal care Corporate Segment result Healthcare Animal care Corporate Segment expenses Healthcare: Depreciation Amortisation of finite life intangibles Income tax expense Animal care: Depreciation Amortisation of finite life intangibles Income tax expense Corporate: Finance costs Income tax credit Profit for the period Healthcare Animal care Corporate	2,823,018 177,033 1,461 81,922 15,720 (1,395) (4,439) (5,139) (20,133) (748) (1,023) (4,402) (15,551) 4,597 52,211 9,547 (12,349) 49,409	673,312 81,492 446 19,573 9,378 (1,721) (1,622) (15) (5,116) (549) (76) (2,395) (4,140) 1,642 12,820 6,358 (4,219) 14,959		1,652,450 169,521 1,198 49,068 18,670 (9,495) (3,785) (1,194) (13,146) (1,137) (320) (4,588) (9,593) 3,727 30,943 12,625 (15,361) 28,207

• Includes costs associated with the acquisition of subsidiaries of $5.993m.

10

EBOS GROUP LIMITED NOTES TO THE INTERIM FINANCIAL STATEMENTS (Continued) For the Six Months ended 31 December 2013

6. SEGMENT INFORMATION (Continued)

The accounting policies of the reportable segments are consistent with the Group’s accounting policies. Segment result represents profit before depreciation, amortisation, finance costs and tax. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

(c) Segment assets

The following balance sheet items are not allocated to operating segments as they are not reported to the chief operating decision maker at a segment level:

• Assets

• Liabilities

• Capital expenditure

(d) Revenues from major products and services

The Group’s major products and services are the same as its reportable segments i.e. healthcare, and animal care, and corporate.

(e) Geographical information

The Group operates in two principal geographical areas; New Zealand (country of domicile) and Australia.

The Group’s revenue from external customers by geographical location (of the reportable segment) and information about its segment assets (non-current assets excluding financial instruments and deferred tax assets are detailed below):

Six months 31 Dec 13 $’000 (Unaudited) Six months 31 Dec 12 $’000 (Unaudited)	Year ended 30 Jun 13 $’000 (Audited)
Revenue from external customers New Zealand 650,064 642,183 Australia 2,351,448 113,067	1,257,302 565,867
3,001,512 755,250 Non-current assets New Zealand 207,002 207,464 Australia 752,182 26,686	1,823,169 206,945 765,616
959,184 234,150	972,561

(f) Information about major customers

No revenues from transactions with a single customer amount to 10% or more of the Group’s revenues (December 2012: Nil, June 2013: Nil).

7. BANK FACILITY AND BORROWINGS

The Group fully complies with and operates within the financial covenants under the arrangements with its bankers. At 31 December 2013 the Group has unutilised term and revolving cash advance facilities of $79.8m (December 2012: $68m, June 2013: $69.5m).

The Group also has a trade debtor securitisation facility of which $310m was unutilised at 31 December 2013 (December 2012: Nil, June 2013: $302.8m).

11

EBOS GROUP LIMITED NOTES TO THE INTERIM FINANCIAL STATEMENTS (Continued) For the Six Months ended 31 December 2013

7. BANK FACILITY AND BORROWINGS (Continued)

On 5 July 2013 the Group refinanced its syndicated banking facilities. The effect of this refinancing was to retain the facility head room that was in place at 30 June 2013 in addition to funding the settlement of the acquisition of the Symbion Group on 5 July 2013. This refinancing also extended the maturity profile of the Group’s borrowing facilities. The Group is committed to repayments of its term debt facilities of approximately $20m per year with quarterly repayment terms.

The Groups new facilities are summarised below:

	Facility Term debt facilities Term debt facilities Term debt facilities Working capital facilities Securitisation facility	Amount (NZD) $85.6m $95.1m $101.1m $90.9m $456.3m	Maturity July 2015 July 2016 July 2017 July 2015 September 2015

8. SIGNIFICANT TRANSACTIONS DURING THE PERIOD

On 4 July 2013 EBOS Group Limited received a net $141.8m in proceeds from a non re-nounceable rights issue to existing shareholders.

On 5 July 2013, in accordance with the sale and purchase agreement to purchase the Symbion Group, the full deferred consideration payable balance of $865m was settled in favour of the previous owners of the Symbion Group, Zuellig Group. This consideration was made through an issue of EBOS Group Limited shares to the Zuellig Group of $498m and cash consideration of $367m. The cash consideration paid was funded by additional debt funding of $134m and cash reserves.

As a result of this transaction the Zuellig Group holds 40% of the shares in EBOS Group Limited. Also on the 5 July 2013 two new Directors, Peter Williams and Stuart McGregor, were appointed to the Board of EBOS Group Limited and represent the Zuellig Group.

In addition to the above in December 2013 EBOS Group Limited was also registered on the Australian Stock Exchange along with its continuing listing on the New Zealand Exchange.

9. RELATED PARTY DISCLOSURES

EBOS Group Limited is the immediate parent, ultimate parent and controlling party.

At 30 June 2013 ZHHA Pty Limited, a subsidiary of EBOS Group Limited, owed CB Norwood Pty Limited, a subsidiary of the Zuellig Group, $7.230m and Zuellig Group Incorporated $1.856m. These balances were repaid during the period.

As at 31 December 2013 no balances were owing to related parties of EBOS Group.

No amounts owed to related parties have been written off or forgiven during the period.

10. EVENTS AFTER BALANCE DATE

Subsequent to 31 December 2013 the Board have approved an interim dividend to shareholders. For further details please refer to note 4.

12

EBOS GROUP LIMITED NOTES TO THE INTERIM FINANCIAL STATEMENTS (Continued) For the Six Months ended 31 December 2013

11. PROSPECTIVE FINANCIAL INFORMATION

The EBOS Group Limited pro-rata renounceable entitlement offer prospectus issued on 5 June 2013 contained prospective financial information (PFI) for the six month period ended 31 December 2013.

The following information is a comparison of the financial statements of EBOS Group Limited from the prospectus dated 5 June 2013 with the actual result for the same period for the six months ended 31 December 2013.

EBOS GROUP LIMITED CONDENSED CONSOLIDATED INCOME STATEMENT For the Six Months ended 31 December 2013

EBOS GROUP LIMITED CONDENSED CONSOLIDATED INCOME STATEMENT For the Six Months ended 31 December 2013
Actual $M (Unaudited) Adjusted PFI(1) $M (Unaudited)	Original PFI $M (Unaudited)
Revenue 3,001.5 2,980.7 Profit before depreciation, amortisation, finance costs and income tax expense 96.2 97.3 Depreciation (5.2) (6.7) Amortisation of finite life intangibles (6.1) (7.8)	3,169.6 103.6 (7.1) (8.5)
Profit before finance costs and tax 84.9 82.8 Finance costs (15.6) (17.3)	88.0 (18.4)
Profit before income tax expense 69.3 65.5 Income tax expense (19.9) (19.7)	69.6 (20.9)
Profit for theperiod 49.4 45.8	48.7

EBOS GROUP LIMITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the Six Months ended 31 December 2013 (unaudited)

EBOS GROUP LIMITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the Six Months ended 31 December 2013 (unaudited)
Actual $M (Unaudited) Adjusted PFI(1) $M (Unaudited)	Original PFI $M (Unaudited)
Profit for the period 49.4 45.8 Other comprehensive income Items that may be reclassified subsequently to profit or loss: Cash flow hedges gains 0.4 - Related income tax (0.1) - Translation of foreign operations* (20.7) (25.4)	48.7 - - -
Total comprehensive income net of tax 29.0 20.4	48.7

• Represents non-profit foreign currency exchange movements arising from the conversion of the Group’s Australian dollar balance sheet items into the Group’s financial reporting presentation currency, being New Zealand dollars.

(1) The original PFI was determined on an assumed NZD:AUD exchange rate of 0.82:1 for the purpose of converting the Group’s Australian dollar denominated trading results, cashflows and balance sheet. To better understand the underlying performance of the Group the original PFI has been restated using the actual exchange rates that have eventuated on which actual results to 31 December 2013 have been recognised.

13

EBOS GROUP LIMITED NOTES TO THE INTERIM FINANCIAL STATEMENTS (Continued) For the Six Months ended 31 December 2013

11. PROSPECTIVE FINANCIAL INFORMATION (Continued)

EBOS GROUP LIMITED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the Six Months ended 31 December 2013

Actual $M (Unaudited) Adjusted PFI(1) $M (Unaudited)	Original PFI $M (Unaudited)
Equity at start of period 304.9 301.7 Profit for the period 49.4 45.8 Other comprehensive income: Movements in cashflow hedge reserve 0.3 - Movement in foreign currency translation reserve (20.7) (25.4) Dividends paid to company shareholders (22.0) (22.0) Shares issued 649.2 646.3	305.3 48.7 - - (22.0) 646.3
Equity at end ofperiod 961.1 946.4	978.3

14

EBOS GROUP LIMITED NOTES TO THE INTERIM FINANCIAL STATEMENTS (Continued) For the Six Months ended 31 December 2013

11. PROSPECTIVE FINANCIAL INFORMATION (Continued)

EBOS GROUP LIMITED CONDENSED CONSOLIDATED BALANCE SHEET As at 31 December 2013 Actual $M (Unaudited) Adjusted PFI(1) $M (Unaudited)	Original PFI $M (Unaudited)
Current assets Cash and cash equivalents 92.6 55.1 Trade and other receivables 755.4 761.9 Prepayments 7.3 7.6 Inventories 505.8 483.3 Current tax refundable 1.4 - Other financial assets – derivatives 2.6 - Investments - 48.9	74.9 832.0 8.2 521.8 - - 54.8
Total current assets 1,365.1 1,356.8	1,491.7
Non-current assets Property, plant and equipment 98.4 86.5 Capital work in progress 0.7 - Prepayments - - Deferred tax assets 28.9 9.6 Goodwill 721.0 736.1 Indefinite life intangibles 56.9 30.8 Finite life intangibles 82.1 122.6 Investment in associates 22.6 19.5	94.6 - 0.2 10.2 729.2 30.8 137.6 19.5
Total non-current assets 1,010.7 1,005.1	1,022.1
Total assets 2,375.8 2,361.9	2,513.8
Current liabilities Trade and other payables 874.4 845.0 Finance leases 1.0 0.3 Bank loans 176.6 188.7 Current tax payable 19.6 14.3 Employee benefits 22.5 19.8 Other financial liabilities – derivatives 1.6 0.9	913.6 0.3 211.3 16.2 21.3 0.9
Total current liabilities 1,095.7 1,069.0	1,163.6
Non-current liabilities Bank loans 262.6 280.6 Trade and other payables 9.6 16.4 Deferred tax liabilities 40.1 43.4 Finance leases 2.5 0.9 Employee benefits 4.2 5.2	300.0 17.9 47.4 0.9 5.7
Total non-current liabilities 319.0 346.5	371.9
Total liabilities 1,414.7 1,415.5	1,535.5
Net assets 961.1 946.4	978.3
Equity Share capital 850.6 849.2 Foreign currency translation reserve (26.4) (30.1) Retained earnings 134.7 127.6 Other reserves - 0.5 Cash flow hedge reserve 2.2 (0.8)	849.2 (1.3) 130.8 0.5 (0.9)
Total non-current liabilities 961.1 946.4	978.3
	15

EBOS GROUP LIMITED NOTES TO THE INTERIM FINANCIAL STATEMENTS (Continued) For the Six Months ended 31 December 2013

11. PROSPECTIVE FINANCIAL INFORMATION (Continued)

EBOS GROUP LIMITED CONDENSED CONSOLIDATED CASH FLOW STATEMENT For the Six Months ended 31 December 2013 (unaudited)

EBOS GROUP LIMITED CONDENSED CONSOLIDATED CASH FLOW STATEMENT For the Six Months ended 31 December 2013 (unaudited)
Actual $M (Unaudited) Adjusted PFI(1) $M (Unaudited)	Original PFI $M (Unaudited)
Cash flows from operating activities Receipts from customers 2,927.4 2,929.0 Interest received 1.5 0.4 Payments to suppliers and employees (2,855.3) (2,856.8) Taxes paid (8.4) (16.9) Interestpaid (15.6) (17.3)	3,113.1 0.4 (3,035.0) (17.4) (18.4)
Net cash inflow from operating activities 49.6 38.4 Cash flows from investing activities Sale of property, plant & equipment 0.5 - Purchase of property, plant & equipment (15.5) (13.4) Payments for intangible assets (0.6) - Acquisition of associates (3.0) - Acquisition of subsidiaries (366.9) (369.3)	42.7 - (14.6) - - (369.3)
Net cash (outflow) from investing activities (385.5) (382.7) Cash flows from financing activities Proceeds from issue of shares 151.1 148.1 Increase of investment in Class B Note - (4.8) Proceeds from borrowings 317.8 134.3 Repayment of borrowings (211.0) (26.9) Dividendspaid to equityholders ofparent (22.0) (22.0)	(383.9) 148.2 (5.3) 140.0 (19.2) (22.0)
Net cash inflow from financing activities 235.9 228.7 Net (decrease) in cash held (100.0) (115.6) Effect of exchange rate fluctuations on cash held (5.4) (2.6) Net cash and cash equivalents at beginning ofperiod 198.0 173.3	241.7 (99.5) - 174.4
Net cash and cash equivalents at end of period 92.6 55.1	74.9
Cash and cash equivalents 92.6 55.1	74.9
92.6 55.1	74.9

16

EBOS GROUP LIMITED NOTES TO THE INTERIM FINANCIAL STATEMENTS (Continued) For the Six Months ended 31 December 2013

11. PROSPECTIVE FINANCIAL INFORMATION (Continued)

The material reasons for the differences between the ‘adjusted’ prospective financial information (‘adjusted PFI’) and actual figures are as follows:

Condensed Consolidated Income Statement:

Profit before depreciation, amortisation, finance costs and tax of $96.2m was consistent with the $97.3m forecast in the adjusted PFI.

Depreciation ($1.5m) and amortisation ($1.7m) were down on adjusted PFI due to less depreciable property, plant and equipment and finite life intangible assets being acquired at the time of acquisition than were forecast in the adjusted PFI.

Finance costs were down $1.7m on adjusted PFI due to a lower than forecast net debt balance and a lower bank funding margin being negotiated under the Groups new syndicated banking facility agreement entered into on 5 July 2013.

The above movements have resulted in NPAT for the six months to December 2013 being $3.6m higher than was forecast in the adjusted PFI.

Condensed Consolidated Balance Sheet:

The Group’s Net Debt position of $346.6m (bank loans offset by cash and cash equivalents and investments) is less than adjusted PFI, $365.3m, by $18.7m. This is primarily due to less cash being tied up in working capital items (receivables $6.5m, trade and other payables $29.4m offset by inventory ($22.5m) due to timing differences for receipts from customers and inventory purchases/payments.

Investments are nil compared to $48.9 in the adjusted PFI. This is as a result of this balance for 31 December 2013 being offset against loans and borrowings as a result of a difference in accounting policies from that used in the preparation of the adjusted PFI. The treatment at 31 December 2013 is consistent with the policy applied in the 30 June 2013 annual financial statements.

Property, plant and equipment is up $11.9m on the adjusted PFI as a result of land and building valuations acquired as part of the Symbion acquisition being higher than forecast in the adjusted PFI.

Deferred tax assets are $19.3m higher compared to the adjusted PFI as a result of additional deferred tax assets being recognised on the acquisition of Symbion than were forecast in the adjusted PFI.

Goodwill is lower than adjusted PFI by $15.1m due to the net assets acquired as part of the acquisition of the Symbion Group, post fair value acquisition adjustments, being higher than was originally forecast in adjusted PFI.

Indefinite life intangible assets are $26.1m higher than adjusted PFI and Finite life intangible assets $40.6m lower than the adjusted PFI due to the finalisation of the valuations of the intangibles acquired as part of the acquisition of the Symbion Group.

17

EBOS GROUP LIMITED NOTES TO THE INTERIM FINANCIAL STATEMENTS (Continued) For the Six Months ended 31 December 2013

11. PROSPECTIVE FINANCIAL INFORMATION (Continued)

Condensed Consolidated Cash Flow Statement:

Net operating cash flows are up $11.2m on adjusted PFI due to less cash being tied up in working capital balances at period end than were anticipated in the adjusted PFI as a result of timing differences for receipts from customers and inventory purchases/payments.

Net investing activity and financing activity cash flows are materially consistent with the PFI.

18

EBOS GROUP LIMITED DIRECTORY

Corporate Head Office

108 Wrights Road P O Box 411 Christchurch 8024 Telephone +64 3 338 0999 Fax +64 3 339 5111 E-mail: ebos@ebos.co.nz Internet: www.ebos.co.nz

Directors

Rick Christie Independent Chairman Mark Waller Chief Executive and Managing Director Elizabeth Coutts Independent Director Peter Kraus Stuart McGregor Sarah Ottrey Independent Director Barry Wallace Peter Williams

Senior Executives

Mark Waller Chief Executive Michael Broome Group General Manager – Healthcare Logistics/ProPharma Angus Cooper General Manager – Group Projects/Mergers & Acquisitions Patrick Davies Chief Executive – Symbion Group Dennis Doherty Chief Financial Officer Sean Duggan Chief Executive – Masterpet Group Kelvin Hyland General Manager – EBOS Healthcare New Zealand David Lewis General Manager – EBOS Healthcare Australia Greg Managh Group General Manager – Onelink/MIS

Auditor

Deloitte Christchurch

Bankers

ANZ National Bank Limited Auckland

Bank of New Zealand Christchurch

Solicitor

Chapman Tripp Christchurch

Share Registers

Computershare Investor Services Ltd Computershare Investor Services Pty Ltd Private Bag 92119 GPO Box 3329 Auckland 1142 Melbourne, Victoria 3001 New Zealand Australia Telephone: +64 9 488 8777 Telephone: 1800 501 366

Managing Your Shareholding Online:

To change your address, update your payment instructions and to view your investment portfolio including transactions, please visit: www.computershare.com/investorcentre General enquiries can be directed to:

• enquire@computershare.co.nz

• Private Bag 92119, Auckland 1142, New Zealand or GPO Box 3329, Melbourne, Victoria 3001, Australia

• Telephone (NZ) +64 9 488 8777 or (Aust) 1800 501 366

• Facsimile (NZ) +64 9 488 8787 or (Aust) +61 3 9473 2500

Please assist our registrar by quoting your CSN or shareholder number.

19