INVESTOR DAY RAMSAY HEALTH CARE /GÉNÉRALE DE SANTÉ MARCH 12 th 2015 2015/03/12 I I
INTRODUCTION � PASCAL ROCHÉ › Chief Executive Officer � DENIS CHARLES › Group Head of Operations � ARNAUD JEUDY › Chief Financial Officer Investor day 2015/03/12 2 I I
ON A FACT-BASED APPROACH, FRANCE NEEDS TO ADAPT BUT HAS A HUGE POTENTIAL The 5 th World Economy (2014) 1 31 French companies among the 17,42 (in billion $) World top 500 global companies 1 128 10,36 95 57 4,77 31 3,82 28 28 2,90 2,85 17 13 13 2,24 2,13 10 2,06 2,03 8 8 8 8 8 1 Source IMF 1 Source Fortune 500 Quality of Education In 2050, with the UK, the largest (number of Mathematical Fields Awards) country in Europe (in million of habitants) 1 13 13 73 73 72 9 5 61 2 France USA Russia UK Japan France UK Germany Italy 1 Source INSEE Investor day 2015/03/12 3 I I
MEDICAL SERVICES OF PRIVATE CLINICS ARE FINANCED BY THE PUBLIC HEALTH SYSTEM WITHIN THE ONDAM BUDGET MEDICAL CONSUMPTION HAS INCREASED FASTER THAN GNP 1 Share of chronical diseases in 75% 20% 80% medical expenses in France (%) 66% 70% Medical consumption vs GNP in 15% 17% 60% France (%) 12.70% 10% 50% 11.7% 11.0% 10.1% 40% 9.0% 30% 8.4% 5% 30% 4.0% 0% 20% 1945 1960 … 1990 1995 2000 2005 2010 2015 … 2030 MEDICAL SERVICES OF PRIVATE CLINICS ARE FINANCED BY THE PUBLIC HEALTH SYSTEM WITHIN THE ONDAM BUDGET «Every year, the "Projet de loi de finances" (funding law project) voted by the Parliament Medicines sets a target for national « ONDAM » € 35bn funding dedicated to health € 175bn ONDAM € 245bn expenses, expressed as a ≈€ 175bn National Statutory Healthcare Spending Objective ("Objectifs Others National de Dépenses € 35bn d'Assurance Maladie" ONDAM) Investor day 2015/03/12 4 I I 1 Source: OECD
ONDAM BUDGET WILL KEEP ON INCREASING EVERY YEAR ONDAM is characterized by an amount and its evolution, both voted and achieved. It is 6 chapters in ONDAM Voted objective expressed in 6 chapters regrouped in 4 categories ONDAM in 2013 Care for elderly people 1 objective in common € 1bn € 17bn Care for disabled people No objective Other care Ambulatory care No objective € 80bn € 77bn Hospitals included in DRG 2 objectives : ODMCO, MIGAC Hospitals not included in DRG 2 objectives : ODAM, OQN Non hospital treatments Hospitals Medico social sector Others ≈ 170 158 154 151 147 143 138 133 ONDAM BUDGET 128 124 120 2% growth (INDEX 100 IN 2001) 114 107 per year 100 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 … 2017 Investor day 2015/03/12 5 I I
AN INCREASING FRENCH HEALTHCARE MARKET … HOSPITAL MARKET (IN € BN) A MASSIVE AND SECURE MARKET 90 › € 79bn for healthcare facilities (MSO) 84 85 82 81 › A market split between 2 main categories : 79 80 77 − Non profit actors ; 75 75 ∑ = 2,000 actors 72 − For profit actors. 70 70 › 2% annual growth expected up to 2017 65 60 2010 2011 2012 2013 2014 2015 2016 2017 Forecast PRIVATE ACTORS ARE MORE EFFICIENT A MARKET WHICH IS CALLING FOR FURTHER CONSOLIDATIONS 100% › 410,000 beds, 20% over capacity › The number of MSO private clinics has 80% decreased by 46% in the last 20 years 1 60% › A private sector key for the French health 40% system, too big to fail › Groups are increasing their market share 20% 34% 25% within the private sector 17% 0% Activity (sessions) Beds ONDAM budget shares Public Private Investor day 2015/03/12 6 I 1 Source: FHP, 2012 I
WE ARE FACING FLAT TARIFFS BUT BY POSITIONING ON THE RIGHT ACTIVITIES WE ARE STILL ABLE TO EXTRACT VALUE DRG EVOLUTION (PUT IN PLACE IN 2006) 4% 4% 2% 1% 0,47% -0,05% 0,16% -0,21% -0,24% 0% 0% 2007 2008 2009 2010 2011 2012 2013 2014 -2% -4% OUR EFFORTS ON CASE MIX AND LENGTH OF STAY COUNTERACT FLAT TARIFFS ( € ) 352 € 1100 360 Besides, increasing subventions are 350 1090 currently put to place to favor : 1086 € 340 1076 € 1080 › Quality outcomes ; 330 1070 › Day surgery. 320 1060 310 318 € which are at the heart of our 1050 300 strategy. 2011 2012 2013 2014 MSO patient average revenue Patient day of stay average revenue Investor day 2015/03/12 7 I I
A GROWING ACTIVITY ON A MID TO LONG TERM PERSPECTIVE … MORE THAN 50% OF OUR CORE MARKET IS ABOVE 60 YEARS OLD Age distribution in MSO 1 Age distribution in FCR 1 ∑ = 68% ∑ = 50% 39% 35% 34% 34% 26% 15% 11% 6% 0-19 20-59 60-79 >80 0-19 20-59 60-79 >80 1 Source: ATIH, Insee & Roland Berger THE FRENCH POPULATION WILL INCREASE DURING THE 15 COMING YEARS 2015 2030 French population in French population in million 2 million 2 63.3m 65.8m Investor day 2015/03/12 8 I 2 Source: INSEE I In 2050, Population including DOM-TOM will reach 73m
… ENJOYING STRONG AND SUSTAINABLE DRIVERS OUR CORE MARKET IS GETTING BIGGER … 2015 2030 Age in million 1 Age in million 1 ∑ = 19.6m ∑ = 15.7m 31,5 32,5 14,8 14,7 15 12 4,8 3,7 60-79 >80 60-79 >80 0-19 20-59 60-79 >80 Age in % 1 Age in % 1 ∑ = 30% ∑ = 25% 51% 48% 22% 23% 24% 19% 7% 6% 0-19 20-59 60-79 >80 0-19 20-59 60-79 >80 1 Source: ATIH, Insee & Roland Berger … AND IS SUPPORTED BY THERAPEUTIC INNOVATIONS : › Improvement of diagnostic methods (endoscopy) › Improvement of treatments (ambulatory procedures, dosage form of drugs, local anesthesia) › Generalization of key procedures (carpal tunnel, cataract, orthopedic prosthesis) › New diagnostic methods: predictive tests › Development of new treatments (new monoclonal antibodies, personalized medicine) and medical procedures (radiotherapy, non invasive procedures) Investor day 2015/03/12 9 I 1 Source: INSEE I
GÉNÉRALE DE SANTÉ & RAMSAY SANTÉ COMBINED GROUP AT A GLANCE MAIN FIGURES COMBINED GEOGRAPHICAL DIVERSITY › 115 facilities › 1.5m of entries Paris › 600 operating rooms › 13,000 beds › 2,900 places Legend › 23 clinics with obstetric authorization MCO +SSR Psychiatry › 34,800 baby deliveries per year › 445k emergencies entries in 24 clinics COMBINED REVENUES IN 2013 2 076 › 6 cancer institutes 389 › 5,000 practitioners 1 687 › 20,000 employees GdS Ramsay Sante Investor day 2015/03/12 10 I I
GENERALE DE SANTÉ : A LEADER OF A HIGHLY FRAGMENTED MARKET … ESTIMATED MARKET SHARES (2013) 15-16% 2% 7% 13% 6% 4% 4% 2% 2% (a) (a) Acquisition of Médi-Partenairesby Bridgepoint, current owner of Medipôle Sud Santé, announced in April 2014. Source: Roland Berger, based on 2012 revenues. GDS : EBITDA (% OF REVENUES) – CONSTANT PERIMETER 12% 11.6% EBITDA › Consistent and stable profitability 6.5% › Higher profitability than competitors National groups average (EBITDA) 3.5% Private sector average (EBITDA) 2010 2011 2012 2013 2014 Investor day 2015/03/12 11 I I
… FOLLOWING A CLEAR STRATGEY In this market Going further : performance is Générale de Santé “ Become the healthcare preference", driven by four Key switching from a B2B to a B2C model Success factors Footprint • More than 95% of clinics in the most attractive quartiles Q1 and Q2 efficiency 4 pillars • Specialist clinics: over the 61 clinics, Focused case only 7 with a mixed model mix • A high specialization • ~13% private market share Size : the 3 • 32% of market share on health territories covered scale effects • 150 beds / clinic • 20 clinics in national ranking 1 • 34% of clinics in national ranking 1 Quality & • Some strong clinic brand equity. e.g. brand equity Antony emergencies leadtime performance (9 minutes) 1 Published by top general public magazines Investor day 2015/03/12 12 I I
CARE EXCELLENCE 1 : SOME MEDALS OF HONOR 9 MSO ranked 8 ranked in top 4 ranked in top 40 in top 25 50 Bariatric Myocardial General ranking surgery infarction 7 ranked 7 ranked 8 ranked 9 ranked 8 ranked in top 50 in top 50 in top 50 in top 50 in top 40 Pneumology Spine surgery Cataract Pacemakers Hip prothesis 1 Source : Le Point, August 2014 Investor day 2015/03/12 13 I I
WE HAVE BEEN PREPARING THE FUTURE BY KEEPING A HIGH INVESTMENT LEVEL Most clusters are involved in brownfield Self financed CAPEX (in € m) projects of development 100 99 98 88 Cluster without recent major development project Major project opened in 2013 Major project opened in 2014 Major short term project (2015) 2011 2012 2013 2014 Major mid term project (> 2015) These figures exclude the externalized CAPEX 3 main innovative projects • Marseille: First French private operator to invest in a Cyberknife 1 (radiotherapy) 2 • Marseille: Innovative one day surgery facility (opening Sept. ‘ 16) • Dijon: regrouping 3 MSO in a clinic designed to simplify patient care 3 2 3 1 processes (opening Jan. ‘ 18) 2015 2016 2017 2018 Investor day 2015/03/12 14 I I
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