HEALIUS LIMITED — AGM Information 2019

Nov 24, 2019

2019 Annual General Meeting

25 November 2019

Robert Hubbard

Chairman

Board of Directors

Robert Hubbard Non-executive Chairman

Arlene Tansey Non-executive Director

Dr Paul Jones Non-executive Director

Dr Malcolm Parmenter MD & CEO

Charles Tilley Company Secretary

Sally Evans Non-executive Director

Gordon Davis Non-executive Director

Executive Leadership Team

Malcolm Parmenter MD & CEO

John McKechnie Chief Executive, Pathology

Scott Beattie Chief Executive, Medical Centres

Dean Lewsam Chief Executive, Imaging

Ben Korst Chief Executive, Day Hospitals

Maxine Jaquet Chief Financial Officer

Janet Payne Group Executive, Corporate Affairs

Peter Wilson Group Executive, People and Shared Services

A year in review

• 'Healius' brand rolled out
• Acquired Montserrat Day Hospitals
• Strategic initiatives progressed
• Political engagement
• Organisational re-design
• Sustainability reporting

Financial results

Underlying

FY 2019 \$m	Pathology	Medical Centres1	Imaging	Corporate	Group2
Revenue	1,128.3	327.4	391.3	0.3	1,804.5
EBITDA	136.2	61.4	54.1	(15.7)	236.0
EBIT	111.1	37.6	38.7	(20.1)	167.3
UNPAT					93.2

FY 2018 \$m	Pathology	Medical Centres1	Imaging	Corporate	Group2
Revenue	1,090.6	289.7	362.6	0.0	1,704.6
EBITDA	138.7	53.7	51.2	(15.6)	228.0
EBIT	114.1	31.6	33.8	(19.4)	160.1
UNPAT					87.5

1 Medical Centres includes Healius Medical Centres, Health & Co, Dental, IVF and Day Hospitals

2 \$42.8m of inter-company revenue/expenses have been eliminated at the Group level (FY18 \$38.3m)

Strategic projects

FY 2019 \$m	Laboratory Platforms	Leapfrog	iCAR	Corporate
Total Opex (adjusted between reported and underlying)	10.3	13.1	3.1	9.2
Total Capex	4.2	31.6	5.0	0.0
Total Project Costs	14.5	44.7	8.1	9.2

• Four key projects which are transformational in nature and unlikely to be undertaken again at such a collective magnitude:
• o Leapfrog Medical Centres transformation program
• o Core technology platform upgrades Pathology and Imaging
• o Corporate infrastructure renewal program
• Future adjustments:
• o iCAR expected to cease after FY 2020
• o Leapfrog and corporate infrastructure renewal expected to substantially reduce after FY 2020
• o LIS in Pathology is a 5-year project

Cash flow and capital

• Growth capex \$176m partly funded by the capital raise
• Including Montserrat Day Hospitals acquisition
• Net debt \$678m
• Bank gearing ratio 2.4x
• Dividends
• o Final 3.4 cents per share
• o Total 7.2 cents per share

Dr Malcolm Parmenter

Managing Director & CEO

Executive Leadership Team

Malcolm Parmenter MD & CEO

John McKechnie Chief Executive, Pathology

Scott Beattie Chief Executive, Medical Centres

Dean Lewsam Chief Executive, Imaging

Ben Korst Chief Executive, Day Hospitals

Maxine Jaquet Chief Financial Officer

Janet Payne Group Executive, Corporate Affairs

Peter Wilson Group Executive, People and Shared Services

Healius brand

Pathology

• Creditable performance with strong 2H returns
• Upgraded Serum Work Area in NSW in October

SWA Benefits:

• o increased automation
• o test costs and turnaround times reduced
• o leading-edge clinical methodology
• o capacity for growth
• Progress on implementing new Laboratory Information System to deliver improved accuracy and efficiencies
• Expansion of niche specialties including Genomic Diagnostics

New Serum Work Area at Laverty

Medical Centres

• Record GP cohort of 1,164
• Leapfrog investment:
• o Practice management system (MedicalDirector 3) rolled out
• o Appointment capability introduced
• o New consumer services
• o 15 centres transformed and extended

Maroubra centre refurbishment under Leapfrog

New consumer services

Medical Centres (cont.)

Join-the-queue remotely

• Patients can join the queue from anywhere reducing time spent in waiting room
• Patients receive an SMS alert 60 and 30 minutes prior, advising them to head to the centre
• Currently available at 7 centres

"It was so convenient to be able to join the queue while travelling in from home."

Patient feedback

"This is an amazing feature and something that I am proud to promote to patients."

Practice feedback

Medical Centres (cont.)

Dental

• Success in growth of Dental
• Launch SwiftQ Dental
• Affordable dental care 6 services at \$99 each

IVF

• Success in growth of Adora Fertility
• New clinic opened in WA and new satellite clinics in QLD & NSW
• Expansion of Sydney and Melbourne clinics

SwiftQ Dental, Fairfield

Montserrat

• Acquired October 2018
• 3 hospitals opened including Westside with 40+ specialists
• Building diversified platform for future growth:
• o In US strong shift to day procedures where ASCs grown to > 5,000
• o In Australia, similar cost drivers and technology innovation
• Expected strong growth from FY2020

Westside Private Hospital, QLD

4 star Medi-Hotel room

Imaging

• Third consecutive year of double-digit growth
• Successful contract wins and delivery:
• o Northern Beaches Hospital
• o Australian Defence Force Health Services
• iCAR technology replacement and innovation:
• o nearing successful completion of the roll-out of major IT project

"Thank you, the new tele-connect (iCAR) system is a really big improvement, and has made a massive difference to my work"

Radiographer quote

"I had a number of complex patients that required internal and external comparison of imaging and this worked seamlessly on the new system."

Radiographer quote

Organisational re-design

• Simplify and streamline management of the portfolio
• Improve agility and autonomy of the businesses
• o Devolved support functions
• o Leaner Head Office
• Profitability improvement initiatives:
• o Roles, functions and management layers
• o Procurement activities
• o Property portfolio
• Example:
• o Optimisation of regional laboratory network

Outlook

• Long-term drivers remain positive
• Well-funded frontline health system key to efficient and effective healthcare
• Indexation July 2019 in General Practice and July 2020 in Imaging
• Recruitment in General Practice remains competitive

FY 2020 forecast

• Expect underlying FY 2020 NPAT to be in the range of \$94m to \$102m
• At the top, delivers an increase of 9.4%, in line with the seasonally-adjusted 2H19 run-rate