FULL YEAR RESULTS PRESENTATION 2019 - Investor Relations
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2019 FULL YEAR RESULTS PRESENTATION
MEDICLINIC INTERNATIONAL DISCLAIMER This presentation contains certain forward-looking statements relating to the business of the Company and its subsidiaries, including with respect to the progress, timing and completion of the Group’s development; the Group’s ability to treat, attract and retain patients and clients; its ability to engage consultants and general practitioners and to operate its business and increase referrals; the integration of prior acquisitions; the Group’s estimates for future performance and its estimates regarding anticipated operating results; future revenue; capital requirements; shareholder structure; and financing. In addition, even if the Group’s actual results or development are consistent with the forward-looking statements contained in this presentation, those results or developments may not be indicative of the Group’s results or developments in the future. In some cases, forward- looking statements can be identified by words such as “could”, “should”, “may”, “expects”, “aims”, “targets”, “anticipates”, “believes”, “intends”, “estimates”, or similar. These forward-looking statements are based largely on the Group’s current expectations as of the date of this presentation and are subject to a number of known and unknown risks and uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievement expressed or implied by these forward-looking statements. In particular, the Group’s expectations could be affected by, among other things, uncertainties involved in the integration of acquisitions or new developments; changes in legislation or the regulatory regime governing healthcare in Switzerland, South Africa, Namibia and the United Arab Emirates; poor performance by healthcare practitioners who practise at its facilities; unexpected regulatory actions or suspensions; competition in general; the impact of global economic changes; and the Group’s ability to obtain or maintain accreditation or approval for its facilities or service lines. In light of these risks and uncertainties, there can be no assurance that the forward- looking statements made in this presentation will in fact be realised and no representation or warranty is given as to the completeness or accuracy of the forward-looking statements contained in this presentation. The Group is providing the information in this presentation as of this date, and disclaims any intention to, and make no undertaking to, publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 2019 FULL YEAR RESULTS PRESENTATION 2
MEDICLINIC RESULTS AGENDA INTRODUCTION Page 4 OPERATIONAL REVIEW Page 7 FINANCIAL REVIEW Page 16 GROUP SUMMARY Page 26 QUESTIONS AND ANSWERS Page 32 APPENDIX Page 33 2019 FULL YEAR RESULTS PRESENTATION
INTRODUCTION DR RONNIE VAN DER MERWE CEO MEDICLINIC INTERNATIONAL
MEDICLINIC FULL YEAR RESULTS
FINANCIAL SUMMARY
2019 FULL YEAR RESULTS*
Revenue EBITDA Operating profit Cash conversion
4% 2% in CC 11% 91% of adjusted EBITDA
2%
underlying
EBITDA margin EPS Final dividend
16.8%
4.70p per share maintained
10%
4% in CC (total dividend 7.90p)
* Adjusted measures presented
Switzerland: Significant tariff reductions and less favourable insurance mix; margin in line with guidance at 16.0%
Southern Africa: Excellent operational performance; macro environment impacting volumes; stable margin at 21.2%
Middle East: Increase in revenue and EBITDA; stable 13.0% margin including Parkview Hospital ramp-up loss
Spire (UK): Performance impacted by weaker than expected patient volumes and investments in quality initiative
Current trading in line with expectations; guidance remains unchanged
2019 FULL YEAR RESULTS PRESENTATION 5
MEDICLINIC FULL YEAR RESULTS
OPERATIONAL SUMMARY
Adapting Hirslanden to Swiss healthcare requirements
- All Swiss hospital operators affected by tariff reductions and outmigration
- Benefiting from actions taken to improve performance:
- Accelerated cost savings, driving efficiencies and revenue opportunities
- Advancing the day case delivery model in a cost-efficient manner
- Hirslanden 2020 benefits will support medium-term operating performance
Continued delivery of operational excellence
- Macro environment impacting patient volumes
- Continued focus on efficiencies and investments to improve clinical quality
- Expanding across the continuum of care:
- Investments in Intercare and Welkom Medical Centre
- Opened Mediclinic Newcastle day case clinic - six more planned in FY20 and FY21
Strategy yielding a period of sustained growth
- Leveraging strong brand and delivering internationally recognised clinical care
- Supported by successful investments and strategic expansion:
- Mediclinic Parkview Hospital opened in September; performing well
- Continued business and operational improvements in Abu Dhabi
2019 FULL YEAR RESULTS PRESENTATION 6
OPERATIONAL REVIEW DR RONNIE VAN DER MERWE CEO MEDICLINIC INTERNATIONAL
OPERATIONS
HIRSLANDEN
OPERATIONS OPERATIONAL OVERVIEW
DAY CASE CLINICS
HOSPITALS
Largest Swiss private healthcare provider; 2
competitive mature market; comprehensive 18 OUTPATIENT CLINICS
range of inpatient and outpatient services 3
delivered to an ageing population
BEDS EMPLOYEES
All Swiss hospitals operators affected by 1 916 10 442
rapidly implemented regulatory change:
- Outpatient tariff reductions (TARMED)
- Outmigration of care - insurance mix change INPATIENT INSURANCE MIX*
Adapting to changes; benefiting from cost- 50%
42.7%
savings and efficiency initiatives 43.5%
47.9% 48.7%
44.8%
40%
New management team
32.3% 31.9% 31.2%
Hirslanden 2020 strategic programme: 29.7% 29.5%
30%
25.0% 24.0%
- Standardise, centralise and simplify 24.6%
22.4% 21.8%
- Develop outpatient delivery models
20%
FY15 FY16 FY17 FY18 FY19
Combined La Colline with Les Grangettes in
General Semi Private Private
Geneva; strengthens leading market position
* Includes Klinik Linde and Clinique des Grangettes
2019 FULL YEAR RESULTS PRESENTATION 8
SWISS REGULATORY ENVIRONMENT
SIGNIFICANT TARIFF REDUCTIONS
TARMED OUTMIGRATION
1 National day case and 1 Six clinical procedures specified
outpatient tariff framework by Federal Government
2 Consists of around 4,000 2
Transferred from inpatient to
clinical treatment codes outpatient tariff on 1 Jan 2019
3 Hirslanden day case and 3 Early adoption in certain cantons
outpatient revenue c.20% of since 1 Jul 2017 with more
divisional revenue extensive lists of 16 procedures
4 Annualised c.CHF25m EBITDA 4 Attracting additional patients;
impact in-line with guidance impacting the insurance mix
IN THE BASE SINCE FURTHER 9 MONTHS
1 JAN 2019 COMPARATIVE IMPACT IN FY20
2019 FULL YEAR RESULTS PRESENTATION 9
HIRSLANDEN
BENEFITED FROM ACTIONS TAKEN
ATTRACTING ✓ Maintained inpatient activity levels despite outmigration (ex. acquisitions)
PATIENTS ✓ Continue to attract new doctors – net increase of 250 in FY19
MAINTAINING ✓ IQM data benchmark exceeded by all Hirslanden hospitals
CLINICAL QUALITY ✓ Improved patient experience index
IMPROVING
✓ Improved Gallup employee engagement score
EMPLOYEE
ENGAGEMENT ✓ Maintained training spend
FOCUSING ON ✓ Focused on supply costs, employee efficiencies and general admin costs
COSTS ✓ Delivered CHF21m savings compared to budget
✓ Offer care in most appropriate and efficient setting
ADAPTING THE
BUSINESS MODEL
✓ Opened 2nd day case clinic (St. Anna Im Bahnhof); open 2 more in FY20
✓ Implemented in-house day case optimisation plans
REDUCING CAPEX ✓ FY19 Capex reduced to CHF95m
2019 FULL YEAR RESULTS PRESENTATION 10HIRSLANDEN
MEDIUM-TERM ACTIONS
SUPPORTING HIRSLANDEN'S OPERATING PERFORMANCE
1 Advance the day case delivery model
• Further optimise costs and processes; benefitting from experience in
Southern Africa and Middle East divisions
• Evaluate opportunities to grow across the continuum of care
2 Improve service differentiation across insurance categories
• Continued insurance mix change partially offset by promotion of
supplementary insurance programmes
3 Maintain doctor recruitment and referral initiatives
• Enhance doctor network marketing programmes and GP referral networks
4 Pro-active engagement with government and insurers
5 Deliver Hirslanden 2020 cost savings and efficiencies
• Standardised IT and back office systems – HIT2020
• Corporate restructuring and efficiency improvements being delivered
• Optimise length of stay in DRG environment
• Project opex and capex investment costs peaking
2019 FULL YEAR RESULTS PRESENTATION 11OPERATIONS
SOUTHERN AFRICA
OPERATIONS OPERATIONAL OVERVIEW
HOSPITALS
Maintaining strong market position with an DAY CASE
52 CLINICS
excellent footprint across all provinces SUB-ACUTE HOSPITALS
8*
Stable medical insurance membership of 5
c.9m with an ageing population and EMPLOYEES BEDS
increase in chronic diseases 15 804 8 517
Patient volumes impacted by macro
environment
BED NUMBERS AND OCCUPANCY
Stable EBITDA margin supported by
excellent operational performance 9,000 95%
BED OCCUPANCY RATE
8,517
NUMBER OF BEDS
Investing across the continuum of care: 8,017 8,095 8,131
8,000 7,885 85%
- Day case clinics and sub-acute hospitals
- Digital platform and technology
Continued investment in clinical services 7,000 72.9% 75%
71.5% 71.5%
69.7% 69.2%
Health Market Inquiry and National Health
Insurance review both ongoing; Mediclinic 6,000 65%
FY15 FY16 FY17 FY18 FY19
responses submitted
Operational beds Additional capacity Bed occupancy rate
* Includes 4 Mediclinic and 4 Intercare day case clinics
2019 FULL YEAR RESULTS PRESENTATION 12OPERATIONS
SOUTHERN AFRICA
INVESTING ACROSS THE
CONTINUUM OF CARE Acute
STRATEGIC RESPONSE #2
Hospital
Continue to see general
1 trend of outmigration
Investing across the continuum of
2 care to capture patient growth
outside of acute hospitals – Patient
Intercare group and Welkom Day Case
Facing Clinics
Technology:
Co-location strategy to build day AI Supported Care
3 case clinics at key hospitals which Tele Medicine
aligns with requirements of Mobile Health
patients, doctors and insurers Web
Enhancing the efficiency of day
4 case activities within hospitals Related
Business:
Emergency Services
6 more day case clinics opening in Primary Care
5 FY20 and FY21 Sub-Acute Hospitals
Home care
Specialist Hospitals
Strategy supported by digital Employer Clinics
6 Mental Health
platform and use of technology
2019 FULL YEAR RESULTS PRESENTATION 13OPERATIONS
MIDDLE EAST
OPERATIONS OPERATIONAL OVERVIEW
DAY CASE CLINICS
HOSPITALS
Well positioned to benefit from long-term 2
growth opportunities in the UAE; building on 7 OUTPATIENT CLINICS
our leading market position in Dubai 18
Continuing to make steady progress; BEDS EMPLOYEES
embarking on period of sustained growth in 926 6 152
revenue and EBITDA margin expansion
Successfully opened Parkview Hospital in 57% ABU DHABI INSURANCE MIX
Dubai and integrated recent outpatient
investments; reached peak capex phase 47%
43% 41%
41% 41%
Actions taken in Abu Dhabi have set the 40%
37% 38% 38%
foundations for future growth; insurance mix 38%
change enhancing the quality of revenue;
27%
divested non-core assets 21%
21%
Supporting new doctors to ramp up activity 17%
20% 19%
in Abu Dhabi following recent investments in
facilities, technology and rebranding 7%
1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
OP Thiqa OP Basic Plan OP Enhanced and Other
Abu Dhabi hospital projects remain on track IP Thiqa IP Basic Plan IP Enhance and Other
2019 FULL YEAR RESULTS PRESENTATION 14OPERATIONS
MIDDLE EAST
GROWTH DRIVERS
1 Supporting doctors
to ramp up activity 30% investment -
Bourn Hall IVF
Mediclinic Airport Road
2 Improving quality of Acquisition of 2
revenue through MAF Clinics
insurance mix change
Mediclinic Al Noor Hospital
Selective investments renovation of ground and mezzanine –
3
and expansion across completion by end December 2019
the continuum of care
182-beds Mediclinic Airport Road Mediclinic Al Noor
4 Increasing acuity Mediclinic Hospital 100-bed expansion and
Parkview Comprehensive Cancer Centre –
Hospital opened completion during first half of
September 2018 2020 calendar year
5 Increasing occupancy
Electronic Health Record rolled out by end of 2020
6 Increased inpatient to calendar year Mediclinic Parkview
outpatient activity ratio
FY19 FY20 FY21
FY18 FY19 FY20 FY21 FY22 FY23
2019 FULL YEAR RESULTS PRESENTATION 15FINANCIAL REVIEW JURGENS MYBURGH CFO MEDICLINIC INTERNATIONAL
ADJUSTED GROUP
INCOME STATEMENT
£’m FY19 FY18 % CHANGE
Revenue1 2,932 2,875 2% • Revenue up 4% in constant
EBITDA 493 515 (4%) currency
EBITDA margin 16.8% 17.9% • Switzerland performance
impacted by changing regulatory
Depreciation and amortisation (163) (145) 12% environment and significant tariff
Operating profit 330 370 (11%) reductions
Net finance costs (57) (70) (19%) • Stable margins in Southern Africa
and the Middle East
Taxation (57) (64) (11%)
• Continued focus on cost
Income from associates 3 3 - management across all divisions
Non controlling interests (21) (18) 17% • Depreciation increased due to
Earnings 198 221 (10%) continued investment
• Net finance costs benefited from
Earnings per share (pence) 26.9 30.0 (10%) refinancing in all divisions
Dividend per share (pence) 7.90 7.90 - • Normalised effective tax rate of
20.4% (FY18: 20.8%)
Weighted avg number of shares (m) 737.1 737.1
• Proposed final dividend
maintained at 4.70p
1 An income statement reclassification increased Mediclinic Southern Africa FY18 revenue and cost of sales by £6m.
2019 FULL YEAR RESULTS PRESENTATION 17GROUP REVENUE
ANALYSIS
2% Hirslanden (47% of Group)
2,875 2,932
• Inpatient volumes stable excl. Linde and Les
1 1
Grangettes
1,349 1,368 • Average revenue per admission down 2.2%
• Up 2% in constant currency incl. acquisitions
1%
Southern Africa (30% of Group)
£’m
• Patient volumes up 0.6% incl. Intercare
882 886 • Revenue per bed day sold up 4.3%
• Up 5% in constant currency
1%
Middle East (23% of Group)
5%
643 677
• Gradual improvement despite lack of tariff
increases
FY18 FY19 • Seasonally strong second half
• Parkview ramp-up
Switzerland Southern Africa Middle East Corporate • Up 4% in constant currency
• Up 7% adjusting for IFRS 15
FY19 revenue up 4% in constant currency
2019 FULL YEAR RESULTS PRESENTATION 18ADJUSTED EBITDA
ANALYSIS
4% Hirslanden (44% of Group)
515 • Direct impact of reduction in average revenue
493
per admission
247 • Partially mitigated by management actions
219 • Down 10% in constant currency
11%
Southern Africa (38% of Group)
£’m
• Good operational performance
189 187 • Stable EBITDA margin due to disciplined cost
management
1% • Up 4% in constant currency
Middle East (18% of Group)
7%
82 88
-3 -1 • Abu Dhabi insurance mix benefits materialising
FY18 FY19 • Includes start up losses associated with
Parkview Hospital
Switzerland Southern Africa Middle East Corporate
• Up 7% in constant currency
FY19 adjusted EBITDA decreased 2% in constant currency
2019 FULL YEAR RESULTS PRESENTATION 19GROUP
BALANCE SHEET SUMMARY
£’m 31 Mar 19 31 Mar 18
Assets 6,428 6,343 • Currency largely increased
Non-current assets: reported numbers
Property, equipment and vehicles 3,524 3,590 • Fixed assets increase
Intangible assets 1,587 1,406
- Capital projects - £232m
- Acquisitions - £152m
Other non-current assets 226 386
• Hirslanden impairment
Current assets 1,091 961 - Property - £186m
- Intangibles - £55m
Equity and liabilities 6,428 6,343
• Spire impairment - £164m
Shareholders’ funds 3,151 3,286
• Successfully completed
Non-controlling interests 115 87
refinancing in MCSA and MCME
Interest-bearing debt 1,982 1,937
• Recalibrated Swiss debt
Other long-term liabilities 681 579 covenants
Current liabilities 499 454
• Net debt to EBITDA ratio 3.5x
Net debt (1,717) (1,676)
Maintaining a responsible approach to leverage
2019 FULL YEAR RESULTS PRESENTATION 20GROUP
CASH FLOW SUMMARY
£’m FY19 FY18
Net cash flow from operating activities 344 345 • Strong cash flow generation
Cash flow from investment activities (298) (319) • Cash conversion at 91% of
Investment to maintain operations (86) (112) adjusted EBITDA (FY18: 90%)
Investment to expand operations (154) (142) • Focus on improving debtor days
in the Middle East
Business combinations (63) (83)
• Maintenance capex to revenue
Other 5 18 at 2.9%
Cash flow from financing activities (34) (108) • Free cash flow invested to
support current expansion
Distributions to non-controlling interests (59) (58)
• Les Grangettes acquisition and
Distributions to shareholders (8) (10)
investments in Intercare and
Borrowings and other 33 (40) Welkom
Net increase/(decrease) in cash and cash
12 (82)
equivalents
Closing balance of cash and cash equivalents 265 261
2019 FULL YEAR RESULTS PRESENTATION 21GROUP
CAPITAL EXPENDITURE
TOTAL CAPITAL BUDGETED CAPITAL • In constant currency, FY20 capex
EXPENDITURE EXPENDITURE budget down 11% from FY19:
FY19 (£’m) FY20 (£’m)* - MCME capex down 30%
following completion of
£94m £66m Parkview
41% 32%
£70m • FY20 budget includes:
£72m 34%
31% - MCME Airport Road and Al
Noor Hospitals and EHR project
£232m £207m - MCSA upgrade cycle to
maintain and improve facilities
- Investment across the Group to
adapt to changing healthcare
environment including outpatient
£1m facilities and digital technology
Hirslanden
£65m Southern Africa £71m *Constant currency basis:
28% 34% GBP/CHF: 1.30
Middle East
GBP/ZAR: 18.01
Corporate GBP/AED: 4.82
Focus on capital discipline and returns-orientated investment across the Group
Note: Capital expenditure excludes acquisitions
2019 FULL YEAR RESULTS PRESENTATION 22HIRSLANDEN
FINANCIAL OVERVIEW
CHF’m FY19 FY18 % CHANGE
Revenue* 1,778 1,735 2% • Hirslanden performance impacted
EBITDA* 285 318 (10%) by changing regulatory environment
EBITDA* margin 16.0% 18.3%
and significant tariff reductions
Depreciation and amortisation (124) (110) 13% • EBITDA impacted by reduction in
average revenue per admission
Operating profit* 161 208 (22%)
• Depreciation increased due to
Net finance costs* Δ
(51) (62) (18%) HIT2020, trade name amortisation
and acquisitions
Income tax expense* (21) (29) (27%)
• Finance costs benefited from
Effective tax rate* 19.0% 19.7% refinance
Non-controlling interests (4) - 100% • Minority interest in Les Grangettes
Earnings*Δ 85 117 (27%) • Cash conversion at 97%
(FY18: 81%)
Movement in inpatient admissions 3.8% (2.6%)
• Capex totalled CHF95m
Movement in revenue per admission (2.2%) (2.5%) (FY18: CHF129m)
Inpatient movement excluding Linde
(-0.1)%
and Les Grangettes
* Adjusted measures presented
Δ Includes inter-company loan interest which is eliminated in the Group earnings reconciliation
2019 FULL YEAR RESULTS PRESENTATION 23MEDICLINIC SOUTHERN AFRICA
FINANCIAL OVERVIEW
ZAR’m FY19 FY18 % CHANGE
RevenueΔ 15,960 15,204 5% • Patient volumes flat excluding
Intercare
EBITDA* 3,385 3,245 4%
• Revenue per bed day up in line
EBITDA* margin 21.2% 21.3%
with inflation
Other gains and losses 7 - 100%
• Strong operational performance
Depreciation and amortisation (556) (496) 12% and cost management delivered
stable EBITDA margin
Operating profit* 2,836 2,749 3%
• Depreciation increased due to
Net finance costs (513) (526) (2%) ongoing investment
Income tax expense (710) (684) 4% • Cash conversion 96%
30.5%
(FY18: 103%)
Effective tax rate 30.7%
Non-controlling interests (316) (303) 4%
• Capex totalled ZAR1,178m (FY18:
ZAR1,057m)
Earnings* 1,301 1,237 5%
Movement in bed days sold 0.6% (1.5%)
Movement in revenue per bed day 4.3% 6.7%
Admissions (000’s) 565 566 -
Δ
An income statement reclassification increased FY18 revenue and cost of sales by ZAR98m.
* Adjusted measures presented 24
2019 FULL YEAR RESULTS PRESENTATIONMEDICLINIC MIDDLE EAST
FINANCIAL OVERVIEW
AED’m FY19 FY18 % CHANGE
Revenue 3,262 3,050** 7% • Gradual improvement in
EBITDA* 425 397 7% performance
EBITDA* margin 13.0% 13.0%** • Quality of revenue improving in line
with strategy
Other gains and losses - - -
• Lack of tariff increase impacting
Depreciation and amortisation* (171) (149) 15% growth
Operating profit* 254 248 3% • EBITDA includes Parkview start up
losses; underlying margin of 14.1%
Net finance costs (31) (34) (9%)
• Depreciation increased due to
Non-controlling interest - (4) (100%) ongoing investment
Earnings* 223 210 6% • Cash conversion at 70% (FY18:
74%)
Movement in inpatient admissions 5.2% 3.2%
• Capex totalled AED452m driven by
Outpatient cases (‘000s) 2,923 2,866 2.0% Parkview (FY18: AED389m)
* Adjusted measures presented
** IFRS 15 adjusted revenue and EBITDA margin figures presented
2019 FULL YEAR RESULTS PRESENTATION 25GROUP SUMMARY DR RONNIE VAN DER MERWE CEO MEDICLINIC INTERNATIONAL 2019 FULL YEAR RESULTS PRESENTATION
STRONG GEOGRAPHIC FOOTPRINT
AND DIVERSIFIED SERVICE OFFERING
SOUTHERN MIDDLE
SWITZERLAND SPIRE FY19 GROUP REVENUE CONTRIBUTION
AFRICA EAST
BEDS 1 916 8 517 926 2 000 Day case Care
Out-patient 8%
HOSPITALS 18 52 7 39
Care
SUB-ACUTE 23%
– 5 – –
HOSPITALS
DAY CASE
2 8 2 –
CLINICS
69%
OUTPATIENT
3 21* 18 8
CLINICS
MARKET
#1 #3 #1 #2 Acute in-patient Care
POSITION
* Minority investment in Intercare’s 21 multi-disciplinary primary care medical and dental centres
2019 FULL YEAR RESULTS PRESENTATION 27UNIQUELY POSITIONED TO
LEVERAGE SCALE AND UNLOCK VALUE
FINANCIAL BENEFITS
• Revenue diversification
• Cost reduction
• Shared resources
• Procurement synergies
• ICT licensing arrangements
• Group financing
OPERATIONAL BENEFITS
• Performance and standards improvement
• Transfer of competencies
• Collaborate to address global trends across the
continuum of care
• Optimise costs and processes to adapt to the
outmigration of care
SHARED SKILLS, RESOURCES, INFRASTRUCTURE AND EXPERIENCE
2019 FULL YEAR RESULTS PRESENTATION 28GLOBAL MEGATRENDS
INFLUENCING HEALTHCARE DELIVERY
Demographics Medical Technology Digital Health Consumerism
Growth Ageing Disease Precision Artificial Personalisation Social Wearables Big data &
prevalence Medicine Intelligence media analytics
2015 2030 2050
Number 60+ Number 60+ Number 60+
901m 1,402m 2,092m
12.3% 16.5% 21.5%
of total of total of total
worldwide worldwide worldwide
population population population
- Prevention
- Growing demand - Real-time information and intervention Client
Access Empowered
- Healthcare reforms - Democratising data Centric
Consumer
- Efficiency - Blurred lines consumerism
- Transparency - New revenue streams
- New payment models Quality Cost - Steering of / owning clients
- New delivery models
POSITIONING MEDICLINIC TO TAKE ADVANTAGE OF OPPORTUNITIES
2019 FULL YEAR RESULTS PRESENTATION 29STRATEGIC GOALS
SUPPORTING LONG-TERM SUCCESS
TO ENHANCE THE QUALITY OF LIFE
1 2 3 4 5
To improve To become an To transform To grow in To achieve
our client integrated our healthcare existing superior
value healthcare services and markets and long-term
proposition provider client to expand into financial
significantly across the engagement new markets returns
continuum of through
care digitalisation
BY BEING:
analytics the employer client centred in
driven of choice everything we do
2019 FULL YEAR RESULTS PRESENTATION 30GROUP SUMMARY
FY20 PRIORITIES
CONTINUED FOCUS ON OPERATIONAL DELIVERY ACROSS ALL DIVISIONS
GROUP WIDE DRIVE GROWTH
INITIATIVES EFFICIENCIES OPPORTUNITIES
• Evaluate opportunities to
• Enhance patient • Adapt the business to
invest across the continuum
engagement through changing global healthcare
of care
technology and EHR rollout environment
• Continue to ramp-up
• Focused engagement with • Optimise the delivery of
Mediclinic Parkview
government and regulators services and care we
Hospital in Dubai
provide
• Deliver outstanding patient • Deliver Mediclinic Al Noor
experience • Build on business and
and Airport Road projects
operational improvements
• Continue to improve clinical in Abu Dhabi
on time in Abu Dhabi
outcomes • Open 2 more day case
• Deliver on the HIT2020
• Leverage procurement strategic project in
clinics in Switzerland
benefits Switzerland • Open Mediclinic
• Maintain leading market • Successfully integrate new
Stellenbosch Hospital and 2
positions more day case clinics in
investments
Southern Africa
2019 FULL YEAR RESULTS PRESENTATION 31QUESTIONS AND ANSWERS James Arnold Head of Investor Relations MEDICLINIC INTERNATIONAL PLC 14 Curzon Street London W1J 5HN United Kingdom Tel: +44 (0) 20 3786 8181 James.Arnold@Mediclinic.com www.mediclinic.com
APPENDIX
OUR VISION, PURPOSE
AND VALUES
VALUES
Client orientation
Patient safety
Mutual trust &
respect
Teamwork
VISION PURPOSE
Performance
driven
To be preferred Enhance the quality of life
locally and of our patients by providing
respected comprehensive, high-
internationally quality healthcare services
2019 FULL YEAR RESULTS PRESENTATION 34MEDICLINIC INTERNATIONAL
DIVERSIFIED GLOBAL FOOTPRINT
As at 31 March 2019
DISTRIBUTION OF THE GROUP’S DISTRIBUTION OF THE GROUP’S DISTRIBUTION OF THE GROUP’S
HOSPITALS BEDS EMPLOYEES
UNITED KINGDOM
7 926
1 916 (SPIRE HEALTHCARE GROUP)
9% 8% 6 152 10 442
18 17%
19% 32%
23%
SWITZERLAND
(HIRSLANDEN)
77 11 359 32 398
HOSPITALS BEDS EMPLOYEES
68% 75% 49%
52 8 517 15 804
MEDICLINIC
MIDDLE EAST
For the 12 months to 31 March 2019
CONTRIBUTION TO GROUP CONTRIBUTION TO GROUP CONTRIBITION TO GROUP
REVENUE (£’M) ADJUSTED EBITDA (£’M) ADJUSTED EARNINGS (£’M)
-1 3 -3
88
0% 1% -1%
677 1 368 18% 219 46
23% 47% 44% 23%
80
41%
TOTAL TOTAL TOTAL
£2 932m £493m £198m
30% 38% 36%
886 187 72
MEDICLINIC
Switzerland Southern Africa Middle East UK Corporate SOUTHERN AFRICA
2019 FULL YEAR RESULTS PRESENTATION 35MEDICLINIC INTERNATIONAL
FY20 GUIDANCE (pre IFRS 16)
• Expects modest revenue growth from an increase in average bed capacity for the year,
reflecting the continued integration of Clinique des Grangettes
• Impacted by a further nine months’ comparative effect in FY20 from the national outmigration
care programme that was implemented from 1 January 2019
HIRSLANDEN • Cost management and efficiency savings likely to be more than offset by reductions in tariffs and
operational effects of outmigration; FY20 EBITDA margin around 15%
• Over the medium-term, and assuming no further regulatory changes are implemented, the
operating performance is expected to be supported by benefits from the Hirslanden 2020
strategic project and structural efficiencies being implemented in the division
• Expects volume growth of around 1% reflecting the additional capacity from the Intercare day
case clinics that were consolidated from December 2018
MEDICLINIC • In line with the Group's strategic objectives and a continued focus on improving clinical quality
SOUTHERN and patient experience, further investment will be made in employees and information
AFRICA communication technology during FY20. This, together with the expected lower margin
contribution from Intercare and the ramp-up of the new Mediclinic Stellenbosch facility, is
anticipated to result in an EBITDA margin of around 20%
• Expects revenue growth of around 10% supported by continued ramp-up of the Parkview
MEDICLINIC • A gradual improvement in EBITDA margin to around 14% in FY20 incorporating the ramp-up of
MIDDLE Parkview and investment in the hospital expansion and new comprehensive cancer centre at
EAST Airport Road, which is scheduled to open in the first half of calendar year 2020
• Continues to target an EBITDA margin of around 20%
2019 FULL YEAR RESULTS PRESENTATION 36MEDICLINIC INTERNATIONAL
FY20 GUIDANCE (IFRS 16)
The Group will adopt the new IFRS 16 accounting standard (addressing the definition of a lease, recognition and
measurement of leases and establishes principles for reporting useful information to users of financial statements about
the leasing activities of both lessees and lessors) from 1 April 2019 and comparators will not be restated.
The EBITDA margin guidance and expected increase to depreciation and finance costs under IFRS 16 for FY20 are set
out below, together with the indicative corresponding EBITDA margin for FY19:
• EBITDA margin c.17% (FY19: 18.1%)
HIRSLANDEN • D&A: CHF35m
• Finance cost: CHF7m
MEDICLINIC • EBITDA margin c.21% (FY19: 21.7%)
SOUTHERN • D&A: ZAR89m
AFRICA
• Finance cost: ZAR83m
MEDICLINIC • EBITDA margin c.16.5% (FY19: 16.1%)
MIDDLE • D&A: AED63m
EAST
• Finance cost: AED49m
FY20: Indicatively, at a Group level, profit before tax would be lower by c.GBP4m, excluding the Group’s equity accounted
share of the impact at Spire. EBITDA would be higher by c.GBP61m due to the fact that the operating lease expense
recognised under IAS 17 is replaced with interest and depreciation under IFRS 16 (which is excluded from EBITDA).
The Group expects to recognise right-of-use assets of c.GBP610m and lease liabilities of c.GBP662m.
2019 FULL YEAR RESULTS PRESENTATION 37FOREIGN EXCHANGE RATES Average rates FY19 FY18 % CHANGE GBP/CHF 1.30 1.29 (1.0%) GBP/ZAR 18.01 17.22 (4.6%) GBP/AED 4.82 4.87 1.1% Closing rates FY19 FY18 % CHANGE GBP/CHF 1.30 1.34 2.9% GBP/ZAR 18.90 16.57 (14.1%) GBP/AED 4.79 5.15 6.9% 2019 FULL YEAR RESULTS PRESENTATION 38
GROUP DEBT STRUCTURE
31 MARCH 2019
Carrying value Carrying value
MEDICLINIC SOUTHERN AFRICA ZARm £'m Terms Date repayable
Senior terms 6,194 327 3M Jibar +1.49% (ZAR2,594m) and +1.59% (ZAR3,600m) Sep 2022 and 2023
Preference shares 1,810 96 3M Jibar x 72% +1.65% Sep 2022
Subsidiaries 130 7 Rates linked to prime interest rate 1 to 12 years
Total debt 8,134 430
Interest expense 653 36
Carrying value Carrying value
HIRSLANDEN CHFm £'m Terms Date repayable
Secured long-term bank loans 1,483 1,143 Swiss 3M Libor +1.25% Sep 2024
Other secured bank loans 46 35 CHF16m Swiss 3M Libor +1.4%, CHF10m 0.9%, CHF20m 1.12% May and Dec 2023
Swiss bonds 235 181 CHF145m at 1.625%, CHF90m at 2.0% Feb 2021 & 2025
Secured long-term finance 2 2 Interest ranging between 1-12% 1 to 7 years
Total debt 1,766 1,361
Interest expense 30 23
Carrying value Carrying value
MEDICLINIC MIDDLE EAST AEDm £'m Terms Date repayable
Bank loans 913 191 3M Libor +1.85% Aug 2023
Total debt 913 191
Interest expense 33 7
Total Group interest expense 66
TOTAL GROUP DEBT (£'m) 1,982
CASH AND CASH EQUIVALENTS (£’m) (265)
GROUP NET DEBT (£’m) 1,717
2019 FULL YEAR RESULTS PRESENTATION 39GROUP
CAPITAL EXPENDITURE
FY19 Actual capex (£’m) Hirslanden Southern Africa Middle East Corporate Total
To maintain operations 30 37 16 - 83
To expand operations 42 28 78 1 149
Total capital expenditure 72 65 94 1 232
FY20 Forecast capex (£’m)* Hirslanden Southern Africa Middle East Corporate Total
To maintain operations 42 40 14 - 96
To expand operations 28 31 52 - 111
Total capital expenditure 70 71 66 - 207
• Reduced Hirslanden FY19 actual capex by 28% from original guidance of CHF132m
• Expect to maintain stable spend in FY20
• MCSA investment to maintain and improve facilities and expansion of day case clinics
• MCME FY19 expansion capex relates largely to Mediclinic Parkview Hospital and EHR project
• FY20 includes ongoing EHR investment and projects at the Airport Road and Al Noor Hospitals
* Constant currency basis: GBP/CHF: 1.30, GBP/ZAR: 18.01, GBP/AED: 4.82
2019 FULL YEAR RESULTS PRESENTATION 40FIVE YEAR
OPERATIONAL SUMMARY
OPERATIONAL PERFORMANCE BED NUMBERS AND OCCUPANCY
10%
7.8%
2,000 1,916 100%
HIRSLANDEN
1,805
BED OCCUPANCY RATE
NUMBER OF BEDS
5.3% 1,677
1,800 1,677
1,655
Movements
5% 2.6% 3.8%
1,600
1.7% 76.2% 76.3% 76.2% 80%
0.5% 0.6% 73.3%
1.7% 1,400 70.4%
0%
FY15 FY16 FY17 FY18 FY19 1,200
-2.5% -2.2% 1,000 60%
-5% FY15 FY16 FY17 FY18 FY19
Admissions Revenue per inpatient
Operational beds Bed occupancy rate
OPERATIONAL PERFORMANCE
SOUTHERN AFRICA
10%
6.3% 6.7%
5.8%
5.8%
Movements
4.3%
5%
4.4%
2.9% 0.8% 0.6%
0%
FY15 FY16 FY17 FY18 FY19
-1.5%
Bed Days Sold Revenue Per Bed Day
-5%
2019 FULL YEAR RESULTS PRESENTATION 41OPERATIONS
HIRSLANDEN 2020
HIRSLANDEN 2020
HIT2020 WE2020
GROW2020
Focus on patient care by Patients experience uniform culture of
Easy access to integrated care
decreasing the burden of medical excellence and high quality of
regions for patients.
administration for hospitals. service in all Hirslanden hospitals.
Improve productivity through Generate sustainable growth through Strengthening of group identity through
higher efficiency business areas from adjacent fields selective leadership development
(«from I to We»).
New
Cost savings Material
Acquisitions fields of
programme productivity
business
ONGOING
Leadership
Value
Development
communication
Infrastructure Programme+
productivity
Group
Staff Doctor
purchasing Cooperation
productivity recruitment
organization
2019 FULL YEAR RESULTS PRESENTATION 42CAPITAL PROJECTS
HIRSLANDEN
CAPITAL PROJECTS DURING FY19
Hospital Project Completion
Klinik Hirslanden HKL 2 Biplane 1H19
Klinik Birshof Medical centre and intermediate care facility 1H19
Klinik Hirslanden Emergency practice with 8 additional beds 2H19
rd
Klinik Im Park Renovation of 3 floor/HKL 1 Biplane 2H19
Clinique La Colline Sport medicine centre 2H19
Klinik Stephanshorn (Schuppis) Doctor’s offices 2H19
Klinik Hirslanden (Seefeldstrasse) Doctor’s offices 2H19
St. Anna Im Bahnhof (Lucerne) Day case clinic 2H19
FUTURE PROJECTS Expected
Hospital Project Completion
Clinique Bois-Cerf Day case clinic 1H20
Klinik Hirslanden Upgraded nuclear diagnostics facility 1H20
Enlargement of the cardiology center and relocation of the
Clinique Cecil 1H20
gastroentérology center
Klinik St Gallen Day case clinic 2H20
Klinik Hirslanden Check up re-located to medical centre; Cyber Knife installed 2H20
Klinik Im Park Medical Centre Seestrasse 247 2H20
Salemspital PETCT and Avenir 2.0 2H20/FY21
AndreasKlinik (Cham Lorze) Doctor’s offices 2H20
Klinik St. Anna Ward C5 upgrade with 6-12 additional beds 2H20
Klinik Linde Extension of emergency unit and radiology 2H20
Biel Day case clinic 1H21
Clinique des Grangettes Emergency station, Cath lab and Nuclear medicine 1H21
2019 FULL YEAR RESULTS PRESENTATION 43CAPITAL PROJECTS
SOUTHERN AFRICA
CAPITAL PROJECTS DURING FY19
Hospital Completion Licenced Beds
Growth of existing hospitals
Mediclinic Potchefstroom (70 operational beds) 2H19 55
Mediclinic Medforum (24 operational beds) 2H19 2
Mediclinic Legae (23 operational beds) 2H19 -
Mediclinic Klein Karoo (8 operational beds) 2H19 -
Developing new day case clinics
Mediclinic Newcastle 2H19 30 (3 theatres)
Acquisitions
Majority investment in the Welkom Medical Centre 1H19 60 (2 theatres)
(20-bed sub-acute, 20-bed day case clinic and 20-bed psychiatric unit)
Majority investment in the Intercare Hospital Group 2H19 273 (13 theatres)
(4 sub-acute: 160 beds, 4 day case clinics: 92 beds, 21-bed Medfem specialist facility)
Sale of existing hospital
Mediclinic Barberton 1H19 (34)
Total licenced beds As at FY19 8,517
FUTURE PROJECTS
Hospital Expected Completion Beds
Existing hospitals
Mediclinic Stellenbosch 1H20 32
Mediclinic Vergelegen 2H20 8
Mediclinic Cape Gate 1H21 13
Day case clinics
Mediclinic Nelspruit 2H20 16 (3 theatres)
Mediclinic Stellenbosch 2H20 20 (2 theatres)
Mediclinic Pietermaritzburg 1H21 21 (3 theatres)
Mediclinic Cape Gate 1H21 20 (2 theatres)
Mediclinic Winelands 1H21 10 (1 theatre)
Mediclinic Bloemfontein 2H21 22 (2 theatres)
2019 FULL YEAR RESULTS PRESENTATION 44CAPITAL PROJECTS
DUBAI
MEDICLINIC PARKVIEW HOSPITAL
TOTAL HOSPITAL OPENED TOTAL ICU CONSULTATION ER NEONATAL CATH OPERATING
BUDGET BEDS BEDS ROOMS BEDS ICU BEDS LAB THEATRES
AED680m 22 SEP 2018 182 15 100 19 22 1 5
2019 FULL YEAR RESULTS PRESENTATION 45SPIRE HEALTHCARE GROUP PLC
UNITED KINGDOM
• Mediclinic’s 29.9% investment in Spire gives the Group exposure to UK private healthcare market
• Spire is ideally positioned to be a leading player in the independent hospital sector given its scale,
reach and quality of care
• Underlying performance in 2018 down on previous year reflecting significantly declining NHS
admissions, lower than anticipated growth in Private admissions and planned investment in Clinical
quality and Consumer engagement:
• Underlying revenue down 1% and underlying EBITDA down 23%
• Strong cash flow performance with EBITDA conversion to cash flow of 105%
• Underlying Group admissions fell 4.6% as a result of growth in self pay (+1.5%) more than offset by
declines in PMI (-2.2%) and NHS (-9.9%) volumes
• Appointed new CFO and COO, both effective from October 2018
• FY19 outlook: expect a return to modest revenue growth, offset by mix and the full year effect of
investments in quality. This outlook reflects a measured approach whilst the NHS remains an
uncertain market. Revenue components include:
- Self-Pay: positive momentum in admissions and revenue
- PMI: Moderate revenue increase
- NHS: Tariff improvement from April 2019, but future volumes remain unclear
- Mix: continued shift to oncology and day case
• May 2019 AGM Trading Update: on track to meet market expectations for the full year
2019 FULL YEAR RESULTS PRESENTATION 46You can also read
