CareTech Presentation Team • Farouq Sheikh Group Executive Chairman • Michael Hill Group Finance Director • John Ivers Chief Operating Officer 2
Executive Summary • CareTech has a proven track record of growth, profitability and cash generation over 25 years • Underlying EBITDA and Diluted EPS have grown by CAGRs of 26% and 20% respectively since IPO • We operate in c.£12.6bn per annum UK social care sector • Significant organic growth opportunities and bolt on acquisitions are being driven by: - Market growing in size and value - Regulatory burden - Increased outsourcing - Shortfall of specialist beds • A proven track record of accretive and successful integrated acquisitions since IPO. • Cambian Group – Acquired by CareTech in October 2018. - Management commitment of £3m as part of the acquisition. - Presents opportunity for Strong Value Creation 3
The Journey so far… 13 th year on the Public Markets At IPO Today • • UK Market size of £2.1bn UK Market size of £12.6bn per annum • Capacity of 2,622 • Capacity of 435 • CareTech market share of less than 3% • CareTech market share of less than 1% • Three specialist operating divisions: • One focused operating division – residential and day care services – Adult services – incorporating adult learning disability for adults with learning disabilities – Children services – incorporating young people residential services, fostering care and learning services – Specialist Services – incorporating mental health and acquired brain injury • Cambian Group Acquired 200 Revenue 40 50 EPS EBITDA 180 45 35 160 40 30 140 35 120 25 30 100 25 20 80 20 15 60 15 10 40 10 20 5 5 0 0 0 2005 A 2006 A 2007 A 2008 A 2009 A 2010 A 2011 A 2012 A 2013 A 2014 A 2015 A 2016 A 2017 A 2018 A 2005 A 2006 A 2007 A 2008 A 2009 A 2010 A 2011 A 2012 A 2013 A 2014 A 2015 A 2016 A 2017 A 2018 A 2005 A 2006 A 2007 A 2008 A 2009 A 2010 A 2011 A 2012 A 2013 A 2014 A 2015 A 2016 A 2017 A 2018 A Underlying EBITDA and Diluted EPS has grown by CAGR of 26% and 20% respectively since IPO 4
Highlights Operational Financial • Improved CQC and Ofsted ratings remain ahead of • Revenue increased by 11.9% to £185.7m (2017: sector averages £166.0m) • Strong Occupancy maintained • Underlying EBITDA increased by 10.0% to £43.9m (2017: £39.9m) • Accelerated organic growth continues Targeting • Underlying profit before tax increased by 11.9% to double digit • growth Successful ongoing integration of recent acquisitions £32.9m (2017: £29.4m) • Strong operating cash inflow before non-underlying • Strengthened management team able to scale the items of £39.1m(2017:£32.7m) business further • Final dividend increased by 13.6% to 7.50p (2017: • Acquisition of Cambian Group presents strong 6.60p) per share opportunity for value creation. • Cambian Group Acquired for £366.5m 5
Acquisition of on 19 October 2018 A Combination that Presents a Tremendous Opportunity for Value Creation Unique opportunity for investors to enhance exposure through a market leader in the highly attractive 1 UK market for social care services for children and adults Highly complementary service offering and geographical coverage providing a nationwide integrated care 2 pathway focused on higher acuity social care Deep operational expertise to better service local authority partners, deliver strong user outcomes, and 3 implement positive staff engagement Opportunity to unlock significant value through a compelling strategic fit, tangible near-term synergies 4 and enhanced trading liquidity 6
Enlarged Group Provides Public Investors with Unique Access to the Social Care Market Creation of the #2 UK Social Care Operator and the Only One with a UK List ing… ...With Significant Scale Across Every Metric Ranking by Revenue (1) (£m) Illustrative Metrics Based on Latest Reported Figures (3) Beds / Places 2,271 1,643 797 (Ex-Fostering) Foster Care (4) 301 634 (2) 359 321 Facilities (5) 205 222 (Illustrative) 213 206 196 191 179 177 166 44 Employees 4,744 4,539 Note: (1)Per last reported revenue. Source: Priory as per Acadia 2017 annual report; Cygnet as per Orbis 2016; VoyageCare as per the 2017 annual report; St. Andrews as per the 2017 annual report; Cambian standalone as per the 2017 annual report; NFA as per Orbis 2016, including Acorn as per Orbis 2016; CoreAssets as per Orbis 2016; Elysium as per 2017 financials from the March 2018 public lender presentation; CareTech standalone as per the 2017 annual report; Witherslack Group as per Orbis 2016. (2) Pro Forma CareTech and Cambian revenue presented as financial year-ending September 2017 in line with CareTech ’ s financial reporting year, with Cambian ’ s revenue calendarized to September 2017 year-end. (3) CareTech based on 2018 interim presentation; Cambian based on 2017 Annual Report. Average number of employees for the year ended 30 September 2017 for CareTech and 31 December 2017 for Cambian. (4) CareTech represents available capacity on the basis of the children that carers are able to look after. Cambian represents average foster placementsin the period. (5) CareTech represents freehold properties as per 2018 interim results; Cambian represents total facilities as per 2017 Annual Report. 7
Improved National Scale and Local Reach Providing Full Pathways Cambian (2) CareT ech (1) Creates a true nationwide integrated care pathway focused on higher acuity Access to new key regions for Cambian 2 Ability to grow in areas with 6 established brands and reputation 6 Local reach to better serve partners and communities Specialist education services Adult Learning Disabilities Specialist residential care services Specialist Services Foster care services Foster Care Specialist mental health services Young People & Children Residential Services Schools Note: There may be more than one location within an area highlighted on the map. (1) Illustrative map based on locations disclosed in the interim 2017 results presentation. (2) Illustrative map based on locations disclosed on Cambian ’ s website. 8
Our Care Pathways Our Approach Delivering 5000 expert High Quality trained and quality Outcome focused staff focused provide care through over Promoting 300 sites independence and choice Tailored to individual Excellent Value service user and family requirements 9
Offering a broad range of services across Care Pathway Care Pathway – 30 September 2018 Capacity Our Core Business Today • Adult Learning Residential 1,754 • Disabilities Independent supported living % net Growth • Community support services from Sept 2017 • Transitional Services Adults • Specialist Residential care 214 1,968 1% • Services Low secure and step down • Independent supported living • Community outreach • Young People Residential care of children 353 • Residential Transitional Services • Services Education and therapy Children’s & Young People • Foster care Fostering 301 654 12% Overall Capacity 2,622 2% • Learning Employee Pre-employment and 266 services apprenticeships 10
Initiatives Underpinning Growth Our Focus and Approach • Pioneering provision of specialist social care services across the UK • National profile with Local Engagement and Service Delivery • Innovative Emerging Models of Care • New Partnerships Approach • - Acquisition provides opportunities to extend care pathways, value creation and synergies. 11
We Operate in High Growth UK Healthcare Services Market Social Care Sector in UK Key Drivers • Increasedpublic outsourcing of care Sector Growth (%) 5.7% 5.5% 5.2% • Opportunity to improve outcomes of current interventions 2.9% • Increasing numbers of Looked After Children • Increasing prevalence of learning disabilities, mental health Children and Fostering Adults UK Healthcare (2) and special education needs Young People • Government support and with high reaching ambitions for children ’s care services and mental health UK Social Care £9.5bn (1) £1.5bn (1) £1.6bn (1) £12.6bn (1) Market Size • Fragmented sector with room for consolidation Note: (1) CareTech 2017 annual results. (2) As per PwC report “Ca pture the growth ” , representing 2017-2020 CAGR for total public and private healthcare spending. 12
Community Based Adult Services • Established over 25 years ago as the initial CareTech service - 1754 capacity September 2018 • Increased service offering (Learning Disability/Mental Health/Physical Disabilities) • Geographic Expansion (North/South Regional focus across UK) • Reconfiguring services to meet changing needs and demand • Developing new projects to meet growing needs - 6 projects/reconfigurations in 2018 Revenue EBITDA • Quality ratings currently overall 85% Outstanding/Good; +3% 2017 IPO 2005 £23.0m £2.4m Full Year 2018 £101.0m £27.0m 13
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