Financial and Operational Review Financial and Operational Review - PowerPoint PPT Presentation

Financial and Operational Review Financial and Operational Review Year to 30 June 2004 Year to 30 June 2004 Dr Colin Dr Colin Goldschmidt Goldschmidt Managing Director Managing Director 23 August 2004 23 August 2004

2004 Financial Highlights 2004 Financial Highlights 2004 Financial Highlights Revenue growth… Revenue growth… … … … … … … … … … … … … … … .6.4% .6.4% ! ! EBITA growth… … … … … … … … … .13.5% EBITA growth… … … … … … … … … .13.5% ! ! EBITA margin… … … … … … … … … .18.9% (up 110 bps) EBITA margin… … … … … … … … … .18.9% ! (up 110 bps) ! NPAT growth… … … … … … … … … … 41.0% NPAT growth… … … … … … … … … … 41.0% ! ! Core* EPS growth… … … … … … ..14.8% Core* EPS growth… … … … … … ..14.8% ! ! EPS growth… … … … … … … … … … … 38.2% EPS growth… … … … … … … … … … … 38.2% ! ! Full year dividend growth… … .20.0% Full year dividend growth… … .20.0% ! ! Core* = Before amortisation amortisation of intangibles of intangibles Core* = Before

2004 Guidance Delivered 2004 Guidance Delivered Full Year 2 0 0 4 Sonic Guidance Actuals Full Year 2 0 0 4 Sonic Guidance Actuals $M $M $M $M 1,037 Revenue Revenue 1,020 - 1,020 - 1,035 1,035 1,037 197 197 EBITA 185 - - 195 195 EBITA 185 Sonic 2004 guidance unchanged since first released in August 2003 3 Sonic 2004 guidance unchanged since first released in August 200

Revenue Revenue 2 0 0 4 2 0 0 3 Grow th 2 0 0 4 2 0 0 3 Grow th ($M) ($M) ($M) ($M) (% ) (% ) Total Revenue 1,037.4 1,037.4 974.8 974.8 6.4% 6.4% Total Revenue Acquisitions completed in FY 2004 Acquisitions completed in FY 2004 ! ! Omnilabs, SDSG Radiology, Haskell Pathology, Schottdorf (29 June 2004) 2004) Omnilabs, SDSG Radiology, Haskell Pathology, Schottdorf (29 June ! ! Organic revenue growth (excluding acquisitions) ~ 6% Organic revenue growth (excluding acquisitions) ~ 6% ! ! Australian pathology revenue growth in line with market Australian pathology revenue growth in line with market ! ! Australian radiology revenue growth in line with market Australian radiology revenue growth in line with market ! ! U.K. pathology revenue growth at double digit (excluding Omnilabs) U.K. pathology revenue growth at double digit (excluding Omnilab s) ! !

Revenue Revenue Second half revenue in line with expected Second half revenue in line with expected ! ! seasonality seasonality H1 H2 H1 H2 $M $M $M $M FY 2 0 0 4 509.9 527.5 FY 2 0 0 4 509.9 527.5 FY 2 0 0 3 485.5 489.3 FY 2 0 0 3 485.5 489.3 Revenue will increase substantially in 2005 Revenue will increase substantially in 2005 ! ! Schottdorf (full year) Schottdorf (full year) ! ! IPN (consolidated from 26 August 2004) IPN (consolidated from 26 August 2004) ! ! Sonic organic growth Sonic organic growth ! ! Possible new acquisitions Possible new acquisitions ! !

Earnings Growth Earnings Growth Movem ent Movem ent FY 2 0 0 4 FY 2 0 0 4 FY 2 0 0 3 FY 2 0 0 3 % % EBITA ($M) EBITA ($M) 196.6 173.1 13.5% 196.6 173.1 13.5% Core NPAT ($M) Core NPAT ($M) 117.0 99.5 17.6% 117.0 99.5 17.6% Core EPS (cents) Core EPS (cents) 43.4 37.8 14.8% 43.4 37.8 14.8% NPAT ($M) NPAT ($M) 57.6 40.9 41.0% 57.6 40.9 41.0% EPS (cents) EPS (cents) 21.7 15.7 38.2% 21.7 15.7 38.2% Cash Generation ($M) 156.3 137.4 13.8% Cash Generation ($M) 156.3 137.4 13.8% Nine consecutive years of double- Nine consecutive years of double -digit EPS growth! digit EPS growth! Core = Before Amortisation of Intangibles Core = Before Amortisation of Intangibles

Earnings Earnings Second half EBITA in line with expected seasonality ! Second half EBITA in line with expected seasonality ! H1 EBI TA H2 EBI TA H1 EBI TA H2 EBI TA $M $M $M $M FY 2 0 0 4 93.5 93.5 103.1 103.1 FY 2 0 0 4 FY 2 0 0 3 82.4 90.8 FY 2 0 0 3 82.4 90.8 EBITA growth of 13.5% on revenue growth of 6.4% EBITA growth of 13.5% on revenue growth of 6.4% ! ! EBITA added $23.4 million ! EBITA added $23.4 million ! Revenue added $62.6 million ! Revenue added $62.6 million !

Earnings Margin Growth Earnings Margin Growth FY 2 0 0 4 FY 2 0 0 4 FY 2 0 0 3 FY 2 0 0 3 Movem ent Movem ent (% ) (% ) (% ) (% ) (basis points) (basis points) EBI TA Margin EBI TA Margin 18.9% 18.9% 17.8% 17.8% + 110 bps + 110 bps EBI TDA Margin 23.0% 21.9% + 110 bps EBI TDA Margin 23.0% 21.9% + 110 bps Revenue growth with marginal profit ! Revenue growth with marginal profit ! Local entity cost management ! Local entity cost management ! Outstanding management teams throughout Sonic ! ! Outstanding management teams throughout Sonic Stability and commitment of CEOs, managers, ! ! Stability and commitment of CEOs, managers, pathologists/ radiologists pathologists/ radiologists Central Sonic synergy initiatives Central Sonic synergy initiatives ! ! Benchmarking, IT, purchasing, centralisation of testing Benchmarking, IT, purchasing, centralisation of testing ! !

Sonic EBITA Margin Expansion Sonic EBITA Margin Expansion 20.0% 19.0% 18.9% 18.0% 17.8% 17.0% 17.0% 16.0% 15.0% 14.0% 2002 2003 2004 FY 2005 margins will be diluted by Schottdorf Schottdorf and IPN and IPN FY 2005 margins will be diluted by

Final Dividend Final Dividend 2 0 0 4 2 0 0 3 Change Change 2 0 0 4 2 0 0 3 Interim Dividend Interim Dividend $0.10 $0.10 $0.08 $0.08 25% 25% Final Dividend $0.20 $0.17 18% Final Dividend $0.20 $0.17 18% Full Year Dividend Full Year Dividend $0.30 $0.30 $0.25 $0.25 20% 20% Dividend fully franked at 30% Dividend fully franked at 30% ! ! Record Date Record Date ! ! ! ! 6 September 2004 6 September 2004 Payment Date Payment Date ! ! ! ! 20 September 2004 20 September 2004 Dividend Reinvestment Plan remains suspended Dividend Reinvestment Plan remains suspended ! !

Balance Sheet Summary Balance Sheet Summary 3 0 .6 .0 4 3 0 .6 .0 3 3 0 .6 .0 4 3 0 .6 .0 3 Receivables (current) $M 145.6 104.7 Receivables (current) $M 145.6 104.7 Intangibles (net) Intangibles (net) $M $M 1,162.2 1,162.2 1,111.1 1,111.1 Total Interest - Total Interest - bearing Debt bearing Debt $M $M 641.3 641.3 561.3 561.3 Equity Equity $M $M 847.8 847.8 831.3 831.3 Gearing (Net IB Debt / Equity) % 74 64 Gearing (Net IB Debt / Equity) % 74 64 Net Interest Net Interest - - bearing debt / EBITDA bearing debt / EBITDA X X 2.62 2.62 2.50 2.50 Interest Cover (EBITDA / Net Interest) Interest Cover (EBITDA / Net Interest) X X 6.98 6.98 5.93 5.93 Undrawn senior debt facilities ~ $ 90 million (after IPN consideration) Undrawn senior debt facilities ~ $ 90 million (after IPN consideration)

2005 Guidance 2005 Guidance 2 0 0 4 Actuals 2 0 0 4 Actuals 2 0 0 5 Guidance 2 0 0 5 Guidance Grow th* Grow th* $ M $ M $ M $ M % % Revenue 1,037 1,290 – – 1,330 1,330 26.3% Revenue 1,037 1,290 26.3% EBI TA EBI TA 197 197 235 235 - - 245 245 21.8% 21.8% 2005 Guidance 2005 Guidance " " Growth* calculated using mid- Growth* calculated using mid - point point of 2005 guidance of 2005 guidance " " Includes full year of Schottdorf Includes full year of Schottdorf " " Includes IPN estimate from 26.8.04 Includes IPN estimate from 26.8.04 " " Intangibles amortisation $64 million Intangibles amortisation $64 million " " Assumes no new acquisitions Assumes no new acquisitions " " Assumes constant exchange rates Assumes constant exchange rates

Pathology Operations Pathology Operations Solid margin expansion in largest Australian entities ! Solid margin expansion in largest Australian entities ! Sullivan Nicolaides Nicolaides Pathology ( Pathology ( Queensland Queensland) ) ! ! Sullivan Melbourne Pathology (Victoria) ! Melbourne Pathology (Victoria) ! ! Douglass Hanly Moir Douglass Hanly Moir Pathology (New South Wales) Pathology (New South Wales) ! New Zealand pathology New Zealand pathology ! ! Revenue growth rates lower than Australia Revenue growth rates lower than Australia ! ! Margin expansion set to continue Margin expansion set to continue ! ! Synergies between Sonic entities Synergies between Sonic entities ! ! Cost management at local level ! ! Cost management at local level Ongoing organic revenue growth ! Ongoing organic revenue growth ! FY 2005 Margins FY 2005 Margins ! ! Omnilabs turnaround will benefit TDL margins in FY ‘05 turnaround will benefit TDL margins in FY ‘05 ! Omnilabs ! Group pathology margins to be diluted by Schottdorf Group pathology margins to be diluted by Schottdorf addition addition ! !