Ramsay Health Care Macquarie Australia Conference

2 May 2013

Christopher Rex, Managing Director

AGENDA

1. Ramsay Health Care – Overview

2. Growth Story & Formula for Success

3. Half-year Group Operational & Financial Highlights

4. Half-year Operational & Financial Highlights - by Region

5. Development Update:

– Ramsay Sime Darby joint venture

– Peel Health Campus

– Brownfield capacity expansion

6. Outlook

2

• One of the largest & most successful private hospital

operators in the world:

– Operating 118 hospitals & facilities across 4 countries

– 10,000 beds

– 30,000 staff

– Treating over 1 million patients per annum

– Extensive education & training, including Ramsay Training

Institute, Graduate Employment & Future Leaders Programmes

• Revenue running at over A$4 billion

• Market capitalisation over A$6 billion

• Enterprise value over A$7 billion

RAMSAY HEALTH CARE – OVERVIEW

3

4

CONSISTENTLY DELIVERING STRONG

TOTAL SHAREHOLDER RETURNS (TSR)

11-Apr-13

2,959%

11-Apr-13

295%

* Ramsay Health Care listed on ASX – 23 September 1997

Source: FactSet, Macquarie Research 5

Compound Annual Rate of Growth

over 15½ years

Ramsay Health Care TSR 24.6%

Vs.

S&P/ASX 100 Acc. Index 9.2%

*

RAMSAY HEALTH CARE – TSR ALPHATM

PERFORMANCE

• Ramsay ranked(1) third in a survey of Australian ASX100

companies, in terms of TSR AlphaTM performance over the

five-year period to 31 December 2012

• The TSR AlphaTM scorecard is a stand alone metric that

takes into account :

– Total shareholder return

– The market value of the investment

– The consistency of a company’s performance in creating

shareholder wealth

• The scorecard acknowledges the quality and capability of

the company’s management team in continually delivering

positive TSR AlphaTM

(1) SOURCE: “Alpha Performance & Reward, February 2013” 6

OUR FORMULA FOR SUCCESS

• Management and culture

– Long term, stable management team, special culture (“The

Ramsay Way”)

– Ramsay can export proven management model and blend it with

local expertise

• Modus operandi and strong growth strategy

– Ramsay’s growth strategy has remained clear and consistent

– Focused solely on operating & managing private hospitals

– Manage and invest for the long term

– Focus is on the provision of quality care – profits will follow

• Financially disciplined

– Growth only pursued if financial and strategic criteria and

investment hurdles (15% ROIC) are satisfied

7

STRONG GROWTH STRATEGY

Organic Brownfield Capacity

Expansion

Public/Private Collaborations

Acquisitions Creation of

Shareholder Value

Underpinned by demographics, quality portfolio of hospitals, ongoing business improvement

Unmet demand

driving Ramsay’s

ongoing

investment in

capacity

expansion

Potential for

more

partnerships to

develop/manage/

provide hospital

services in

changing

political and

demographic

landscape

Exploring further acquisitions in existing and other markets

Ramsay has proven it can export its management model

Must add long-term value to shareholders

8

Sustainable growth enhanced by focusing on hospitals and taking a prudent

approach to acquisitions

+ + +

GEOGRAPHICAL SEGMENTS

82%

13% 5%

Operating Revenue

Asia Pacific*

United Kindom

France

77%

19%

4%

EBITDAR

Asia Pacific*

United Kingdom

France

9

Strong Australian business is the largest contributor to earnings and cash flow

* Asia Pacific currently includes Australia and Indonesia.

Post 1 July 2013 our share of the Ramsay Sime Darby joint venture will be equity accounted.

10

FINANCIAL HIGHLIGHTS - 1ST HALF FY 2013

• Group Revenue – $2.1 billion 5.2%

• Group EBIT – $248.4 million 8.8%

• Core NPAT – $148.2 million 12.3%

• Core EPS – 69.1 cents/share 13.7%

• Interim Dividend

(fully franked)

– 29.0 cents/share 13.7%

• Guidance for Core NPAT and Core EPS growth was

upgraded to 13% - 15% for FY2013 (previously 10% - 12%)

11

Notes:

– Results for the six months ended 31 December 2012

– All amounts are in Australian dollars unless otherwise stated

OPERATIONAL HIGHLIGHTS

• Results reflect solid performance across worldwide

portfolio

• Completed brownfield capacity expansion projects

meeting growing demand and adding to EBIT and EPS

• In Australia, private health insurance membership remains

strong (46.9% with hospital treatment insurance) despite

recent changes to private health care policy

• Selected in the 2013 Global 100 Most Sustainable

Companies in the World for the second year in a row

12

LEVERAGE & CASH MANAGEMENT

5.1

2.7 2.7

3.7

3.3

2.4

1.9

1.5 1.5

1X

2X

3X

4X

5X

6X

FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Dec'12

Leverage

Leverage = Net Debt ÷ EBITDA

Affinity Acquisition $1.4b

Capio UK Acquisition £193m

Ramsay Santé Acquisition €87m

150

200

250

300

350

Dec'11 Dec'12

$m

Cash Flow

Gross Operating Cash Flow

EBITDA

• Continuing strong operating cash flow has allowed Ramsay to invest significantly in

brownfields whilst maintaining a low leverage ratio

• Effective working capital management delivered a high cash conversion rate for the

Group of more than 100% of operating profit (EBITDA) to gross operating cash flow

13

14

OPERATIONAL/FINANCIAL HIGHLIGHTS – AUSTRALIA

• Revenue up 7% to $1.66 billion

• EBIT up 10% to $219 million

• Australian hospital EBITDA margin up 50 bpts to 18.6%

• Private health insurance (PHI) membership remains strong

despite challenges presented by changes to PHI policy

recently

• Demand for health care continues to increase with ageing

and expanding population which drives our investment in

brownfield capacity expansion

• Strong indications that State Governments will procure

more input from private sector in planning, building and

operating public hospitals

15

OPERATIONAL/FINANCIAL HIGHLIGHTS – EUROPE

Ramsay UK

• Revenue up 1.5% to £179 million

• EBITDAR up 1.5% to £45 million

• EBITDAR margin remains strong at 25%

• Private Medical Insured admissions remain subdued but continued growth from

NHS admissions with 9% growth over the previous corresponding period

• NHS now comprises almost 70% of total admissions

• Competition Commission process is ongoing however, health care reform

expected to provide continuing opportunities for the private sector

Ramsay Santé – France

• Ramsay Santé performed to expectations

• Revenue up 1.5% to € 80 million

• EBITDAR up 3.4% to € 13 million

• EBITDAR margin up 30 bpts to 15.8%

16

17

Sunshine Coast University Private Hospital

Joint venture agreement with Sime Darby

announced on 26 March 2013

FURTHER EXPANSION OF FOOTPRINT

INTO ASIA

• The joint venture will combine Ramsay’s three hospitals in Indonesia

with Sime Darby’s healthcare portfolio under a new JV company to be

known as Ramsay Sime Darby Health Care

• Ramsay will achieve a 50% equity interest through the contribution of

its Indonesian assets and total cash payments of approximately

A$120 million

• The deal presents a significant opportunity for Ramsay to expand its

healthcare portfolio in Asia

• Subject to regulatory approvals, the deal is expected to complete on

or before 1 July 2013

18

JOINT VENTURE WITH SIME DARBY

JV Company

Ramsay Sime Darby Health Care

Ramsay Health Care

3 Indonesian Hospitals

Sime Darby Healthcare

3 Malaysian Hospitals

Nursing & Health Science College

Sime Darby

50%

Ramsay Health Care

50%

RS Premier Jatinegara

RS Premier Bintaro

RS Premier Surabaya

SDMC Ara Damansara

SDMC Subang Jaya

SDMC Park City

JV enterprise value of approximately A$500 million

and revenue in excess of A$200 million

19

EXPANSION INTO ASIA

- STRATEGIC RATIONALE

• First major step into Asia since acquiring Indonesian

hospitals in 2005

• Aim of the joint venture will be to build a quality portfolio

of hospitals throughout Asia

• 600 million people in ASEAN with rising middle class

demanding quality healthcare

• Leverages off Ramsay’s management expertise & Sime

Darby’s Asian networks

• Opportunities for value creation via key synergies such

as procurement; medical tourism and productivity

benchmarking

20

PEEL HEALTH CAMPUS WA

Ramsay has entered into agreement to acquire Peel Health

Campus in South Perth, WA:

− 152 bed public hospital

− Located 70km south of Perth

− Offers medical, surgical, maternity and

rehabilitation services

− Over 40,000 emergency presentations pa

− EPS neutral in FY 2014 and mildly

accretive thereafter

− Opportunity to further develop site

− Fits with Ramsay’s broader strategy of

seeking public/private collaborations

− Subject to State government approval, the

deal is expected to complete end May 2013

21

BROWNFIELD (CAPACITY EXPANSION)

DEVELOPMENTS

• Proven track record of undertaking successful brownfield

expansion

• Extensive programme of hospital redevelopments &

expansions currently underway

• Approximately $95 million spent on brownfield projects in

the half year. A further $91 million for brownfield capacity

expansion approved during the six month period

• Projected ongoing pipeline of brownfield investments of at

least $100 million pa to increase capacity, required to

provide services to the ageing and growing population

• Completed brownfield developments adding to earnings at

the EBIT & EPS level & on track to achieve 15% ROI

22

BROWNFIELD DEVELOPMENT UPDATE

Warringal Private Hospital, Melbourne:

– $56 million • Re-development and major expansion

• 62 new private beds

• 5 additional operating theatres

• Day surgery, recovery units

– When completed, Warringal

Private Hospital will have 205

private beds and 11 operating

theatres

– Completion October 2014

23

MAJOR PROJECTS

• New 145-bed private hospital at

Joondalup Health Campus – opened

March 2013, completing the final

stage development on this site

• $47 million expansion of Greenslopes

Private with additional 60 beds, 4

operating theatres and obstetric

services – opened March 2013

• 200 bed Sunshine Coast University

Private Hospital – a public/private

collaboration with Queensland Health

– opens December 2013

24

25

GLOBAL MARKET TRENDS IN HEALTH CARE

• Growing and ageing population will continue to drive

demand for health care

• Governments increasingly concerned about the rising

costs of health care

• Patients demanding and willing to pay for higher quality

health care

• Increasing GDP and affordability driving growth for private

operators

• Significant growth in health care spend expected in

emerging markets

26

OUTLOOK

• Positive market dynamics indicate strong upside for Ramsay

• Growing and ageing population will continue to drive our

investment in capacity expansion

• Remain positive about opportunities overseas including emerging

markets and the opportunity to apply our proven health care

management expertise in these markets

• Continue to investigate acquisition opportunities in existing

markets in both the private and public sectors

• Given strong industry fundamentals and continuing

implementation of our successful growth strategy and barring

unforeseen circumstances, Ramsay reaffirms FY 2013 upgraded

guidance for Core NPAT and Core EPS growth for the Group to

13% - 15%

27

Questions

Macquarie Australia Conference - 2 May 2013