Ramsay Health Care Limited

Good morning and welcome to Ramsey Healthcare's financial results for the six months to 31st of December 2025. My name is Natalie Davis and I'm joined today by Anthony Nielsen, our Group CFO, who commenced with Ramsey in late November. After 12 months in the role, I'm pleased to report that we're making good progress on our key priorities. The refresh of our Group Executive is now complete, strengthening capability and supporting the acceleration of our multi-year transformation program. We remain focused on delivery against the three priorities I first outlined this time last year that are shown on slide three. First, disciplined execution of the transformation of our market leading Australian hospital business. In the half we've improved patient, people and doctor MPS, grown admissions with a focus on higher acuity and have lifted our theatre utilisation. Our second priority is strengthening capital allocation and improving returns across the portfolio. You will have seen last week's announcement regarding the proposed distribution of Ramsey's investment in Ramsey Sante to Ramsey shareholders. Subject to obtaining the relevant approvals, we believe this will simplify the group and enable focus on the transformation of the core Australian hospital business. We have also progressed the turnaround at Elysium by right-sizing the business for the current environment through site closures and reducing available beds. With Joe O'Connor joining as CEO in January, we expect the turnaround to continue to gain traction. Our third priority is evolving our culture to innovate and accelerate delivery. I'm pleased to say that our group leadership team is in place, strengthening capability, and our patient and people MPS scores remain high across the group reflecting the commitment of our teams and clinicians and the quality of the care we provide. Turning to the half year results on slide five, we reported 7.3% growth in underlying EBIT and 8.1% growth in underlying NPAT and that was driven by Australia. The board has determined a fully frank dividend of 42.5 cents per share up 6.3% and representing a 60% payout ratio of underlying earnings. Slide 6 shows the underlying performance across each region and the contribution to the funding groups and the consolidated group results. Australia was the key driver, reporting underlying EBIT growth of 7.1%, supported by good activity growth, higher acuity, improved PHI indexation and cost management, which together helped offset the impact of the new funding mechanism at Joondalup Health Campus. The team at Joondalup have progressed a range of operational programs, including a focus on reducing agency usage, which has also helped to partially mitigate this impact. A lower underlying net loss from Randvisante supported the results, reflecting growth in Sweden and performance actions in France that partially offset the government funding pressures in that market. Turning to the performance of each region and starting with Australia. Slide 8 lays out our 2030 strategy where our vision is to innovate to be Australia's most trusted leading healthcare provider and to deliver long-term value for our shareholders through the five pillars of our strategy. Our strategy will innovate Ramsey. We will lead in local catchments, growing our services, patient care and relationships with specialists and GPs in communities around our strategically located hospitals. Differentiate ourselves in priority therapeutic areas, including cardiology, orthopaedics and cancer care. Create one-RAMSI advantages powered by digital and AI to capture the synergies enabled by our market-leading scale. Connect patient and doctor journeys from hospital care to community-based care. And work with our communities and partners to shape Australia's leading healthcare system for the future. We will measure progress with clear financial and non-financial metrics and early indicators include our patient, doctor and people MPS metrics, growth in admissions, cost efficiencies through OneRAMC advantages and revenue indexation that better matches cumulative cost growth. Turning to slide 9, and through all the change underway, it's important to reinforce that our patients, people and clinical excellence remain at the heart of what we do and how we operate. We've leveraged Ramsey's strong reputation in clinical trials to launch a national Ramsey Research and Development Network, supporting 23% growth in clinical trials activity in the first half. Growth in admitting VMOs and strong theatre utilisation contributed to good activity and market share gain. The changing environment in the delivery of private healthcare is creating opportunities for us, given our strong and stable reputation and portfolio strategically located at known facilities. The proposed acquisition of National Capital Private Hospital is a clear example of this, delivering us access to an attractive catchment area where we're not currently represented and a hospital with a strong reputation for clinical excellence. Our focus on utilisation across catchment areas has also seen some development projects postponed or reshaped, with development spend now expected to be below the bottom end of the guidance range. We continue to drive cost efficiencies and maintain capital discipline through our Big Five hospital initiatives, supported by pilot programs across the business. Following last year's review, digital and data OPEX remains on track to be at or below FY25 spend. Turning to the Australian result on slide 10. The business delivered top line and profit growth despite the impact of the new funding mechanism at Joondalup. Revenue from customers increased 8.2%, driven by a 3.1% increase in hospital admissions and improved indexation. Revenue from our private hospital portfolio grew 8.7%. EBIT margins excluding Joondalup improved by 40 basis points on the prior period, driven by higher activity levels and case acuity, increased serialisation and improved PHI indexation relative to wage inflation. Looking at activity in more detail on slide 11, our core surgical admissions grew 5.7%, with day admissions growing more strongly than overnight admissions. However, a higher acuity mix resulted in inpatient IPTAs increasing at a faster rate than inpatient admissions. We remain disciplined with our CAPEX spend in Australia, where it's focused on projects with good returns and strategic value. On slide 12, the major development projects in the half were the completion of Ramsey Private at Joondalup campus and the final phase of the expansion of Warringal in Melbourne, due to be completed in the second quarter of financial year 27. We have 23 new theatres and procedure rooms scheduled to open in financial year 26, concentrated in major hospitals in key catchment areas. Development capex for the full year is now expected to be in the range of 170 to 190 million below our previously guided range, reflecting our disciplined approach to utilisation and capital allocation. Turning to the outlook for Australia on slide 13. In the second half, we'll continue to advance our multi-year transformation program in Australia. We aim to finalise negotiations on the Victorian and Queensland nurse EBAs by the end of this financial year. We will continue to work with our payers to recover both the gaps created by cumulative revenue indexation for low-cost indexation and future wage inflation, as well as innovating our funding to better support innovation in care models. We have one major PHI contract renewal due in the second half. We expect EBIT growth momentum in Australia to continue in the second half, driven by growth in activity in our priority therapeutic areas revenue indexation, cost focus and partial mitigation of the impact of the new funding mechanism at Joondalup. We will continue to progress the proposed acquisition of National Capital Hospital which is expected to transition into the Ramsey portfolio in the first quarter of financial year 27 and be EPF accretive in the first 12 months of ownership. Turning to the UK region on slide 14, both businesses operating in challenging conditions The UK acute hospital business was impacted by NHS budgetary restrictions towards the end of the period. This was mitigated by focus on high acuity and private work as well as operational initiatives. Elysium continues to face weak market demand from local authorities. The turnaround plan is underway and beginning to gain traction including central cost reduction, agency reduction, site optimisation and fee negotiation. Turning to the acute hospital business results on slide 15, the business delivered 3.5% revenue growth in constant currency, driven by a higher acuity case mix, increased private pay admissions and tariff indexation. NHS admissions slowed and declined in quarter two as NHS budgetary constraints began to impact activity. A continued focus on managing complexity and consistent operational excellence helped to mitigate the impact of lower NHS volume. The result included backdated indexation. Excluding this impact, underlying EBIT margins improved 30 basis points to 9.3%. Turning to the outlook for the acute business on slide 16. NHS activity outlook for the third quarter, financial year 26, is expected to remain negative compared to the prior period. The UK hospital business will continue to focus on growing private volumes and driving operational excellence to help offset the NHS funding uncertainty, which we expect to prevail until the new NHS fiscal year. As the leading private provider to the NHS, Ramsey UK remains well positioned to support the UK government's objectives to reduce elective surgery, outpatient and diagnostic waitlists when additional funding is anticipated to be made available in the new NHS fiscal year from 1 April, with a strong pipeline of patients through its outpatient clinics. On slide 17, Elysium has remained focused on its turnaround program, informed by the recommendations of the performance diagnostic completed in the second half of financial year 25. Key priorities include site optimisation, cost reduction and fee negotiation that better reflects the complexity of services we provide. This resulted in the closure of 163 beds at underperforming sites in the first half, with five sites expected to be closed in the second half. A number of these properties have been put to market for sale. Turning to the outlook on slide 18, Elysium's new CEO Joe O'Connor commenced in January and is leading the performance improvement plan. We expect the ongoing focus on the plan and the initiatives already taken in 2025 will see the turnaround continue to gain traction. Turning to Ramsay-Sante on slide 19. As announced last week, we are progressing the proposed demerger of Ramsay-Sante via an in-specie distribution of our 52.8% investment to Ramsay shareholders. While this process continues, we remain focused on the performance improvement programs across the European business, and particularly in France, which continues to face funding headwinds and broader market uncertainty. In the Nordics, the focus remains on continuing the performance momentum of the Swedish business and the turnaround programs in Denmark and Norway. Turning to Ramzi Sante's results on slide 20, and the business delivered a 4.4% increase in underlying EBIT in constant currency, driven by a strong result from the Nordics region, in particular the performance in Sweden. This was partially offset by weaker results in France, where the reduction in subsidies of €20 million compared to the prior period and the inadequacy of tariff indexation continue to pressure earnings. Turning to the outlook for Ramsey Sante on slide 21, Across Europe, the focus remains on cost control, efficiency and cash generation, as well as continuing the performance momentum of the Swedish business. Activity growth in Europe is expected to continue in the second half, driven by day admissions, partially offset by the impact of a three-day French doctor strike in January. The new contract at Saint-Goran commenced 5 January 2026 for 8 plus 4 additional years on improved terms which will assist the Nordics' results. As outlined in detail in last week's announcement on slide 22, we believe that the proposed demerger of Ramsay Sanchez through in-specie distribution will simplify Ramsay and enable both organisations to focus on transforming their respective businesses. We will update the market as we work towards the release of the demerger booklet and subject to receiving necessary approvals, currently expect to complete the in-specie distribution in December 2026. I'll now hand you over to Anthony to run through the financials in more detail.

Thanks, Natalie. Good morning, everyone. Natalie has already covered as much as slide 24, so I'll just highlight a few points, noting currency translation has impacted some of the movements on the P&L and balance sheet for this half. In this result, we have focused on underlying numbers, given the large non-recurring items in the UK region and Ramsey Stompe in the first half of last year. Items excluded from underlying profit this half were $11 million negative impact on net profit and primarily relate to transaction and restructuring costs. There is a detailed reconciliation shown in the appendix. Underlying NPAT showed strong growth for the half of 8.1% driven by activity growth across Australia and Europe combined with higher acuity across Australia and UK and revenue indexation in Australia. There continues to be a focus on operational efficiencies across all regions to mitigate cost pressures. The underlying NPAT tax rate was 36%, slightly higher than last year. This reflects the impact of CVAE taxes in France, which calculated on turnover, despite France being in a pre-tax loss position in the first half. The full-year tax rate is forecast to be approximately 35%, reflecting a higher rate in Remzi-Santac. Operating cash flow on slide 25 improved 16.9% to $350 million for the period, driven by the performance of Australia and lower tax pay than the previous corresponding period which included the sale of Ramsey Sign Darby. Improving our cash conversion is one of our key priorities in all regions and we are all investing in systems and processes to strengthen cash collection and drive cost out and efficiency programs across all businesses. CAPEX cash outflow increased from prior period mainly due to development projects in Australia. I will touch on CAPEX in more detail on slide 31. Dividends paid increased 20% reflecting the suspension of the dividend reinvestment plan for fiscal year 25 final dividend. Turning to slide 26, currency translation had a significant impact on the face of the balance sheet for this period to the tune of $84 million. Movements in working capital, primarily related to the Renzi-Sante, and the timing of periodic true-op payments with French government with advances repaid, reducing payables. Consolidated net debt is $5.1 billion, and I'll show a separate breakdown between the funding group and Renzi-Sante on the coming slides. 67% of the consolidated group's floating rate debt in the second half of this fiscal year 26 is hedged at an average base rate of 3%. We have provided both the funding group and Renzi-Sante summary balance sheets in the appendix so you can see the group results excluding Sante. Turning to the funding group performance on slide 27, underlying impact grew 5% which was driven by good growth in Australia, partly offset by a lower contribution from the UK. UK margins were impacted by higher costs and lower occupancy at Elysium. Elysium cost efficiency initiatives began to gain momentum late in the half with continued focus on these initiatives in the second half. Total financing costs including lease costs increased 1.3% in constant currency due to higher average base rates and a small increase in drawn debt during the half. Moving to the funding group debt and leverage on slide 28. Given the separate funding arrangements of the funding group and Renzi Sante, looking at the group's consolidated leverage is not a meaningful metric. The funding group shows leverage excluding Sante and is 2.22 times within our target range of less than 2.5 times and interest cover remains strong. Fitch has recently reaffirmed its BBB minus investment grade rating for the funding group. We have adequate liquidity in place for the purchase of the National Capital Hospital in FY27 and leverage is expected to remain within our target range of less than 2.5 times. During the period, we successfully refinanced our key syndicated debt facilities, extending Kenner and reducing our margin by 30 basis points. While base rates are increasing, our weighted average cost of debt has declined 20 basis points since 30 June 2025, reflecting the refinancing of our facilities at these lower margins. We remain reasonably well hedged, with 65% of our debt hedged at an average base rate of 3.65%, which is below current spot rates for the second half of the year. Moving to Ramsay Sante's debt position on slide 29, and it remains well supported by its own separate funding arrangements, with Tenner extended significantly over the last 12 months. The business has Euro 391 million of liquidity available, with leverage of 5.3 times and the company is focused on improving cash flows and driving cost out and efficiency programs to reduce leverage over time. Turning to slide 30 and our focus is on improving capital management, cost discipline and cash flows across the group. First, we are improving capital allocation and returns. A range of programs are underway to recycle capital into higher returning projects of the business and lift utilization of existing facilities and assets. In the overseas business, we will drive capital discipline and focus on maintenance projects and the optimisation of service and assets. Second, we need to strengthen both operating and investing cash flow. We have multiple initiatives in place to improve working capital with revenue cycle management, cost-out and efficiency programs being a key focus. We are also reviewing capital spend and will be pushing all these initiatives harder. In the near term, our priority is maintaining our leverage and our credit rating at current levels. Looking at capital expenditure in more detail on slide 31, our focus is on capital discipline, with CapEx modified for the current environment with both UK and Ramsey Sante spend lower in local currency. Group CapEx increased $27 million between periods in constant currency terms due to higher Australian development CapEx, with focus on development projects increasing procedural capacity in Joondalup and Warringal. We have reduced the full year CAPEC range to between $755 to $795 million, which is $40 million below the previous range to reflect the lower spend. I will now hand you back to Natalie to talk about the outlook.

Thanks Anthony. So to recap briefly, our strategic priorities remain clear, transforming our market leading Australian hospital business Strengthening our capital discipline and improving capital returns across the portfolio and evolving our culture of people caring for people to innovate and drive performance. Our financial year 26 full year results are expected to reflect the following. In Australia, we expect continued EBIT growth momentum driven by increased activity in priority therapeutic areas, revenue indexation, cost focus and partial mitigation of the impact of the new gingerlet funding mechanism. In our UK hospital business, we expect NHS activity in the third quarter to remain negative compared to prior period due to NHS budget constraints for the remainder of the UK fiscal year ending 31st of March. Granting UK remains well positioned to support the UK government's objectives to reduce waiting lists and has a strong pipeline of patients through its outpatient clinics. when anticipated additional funding is made available in the new NHS fiscal year from 1 April. For Elysium, we'll remain focused on improving performance and expect the turnaround to continue to gain traction over the second half. In Europe, we expect activity growth to continue in the second half, driven by day admissions, partially offset by the impacts of the French three-day doctor strike in January. Our net financing costs are forecast to be 590 to 610 million and our underlying effective tax rate is expected to be approximately 35% given the high tax rate in Ramsay-Saint. Group capex guidance has been reduced. We spend in the second half to be lower than the first half. Finally, the dividend payout ratio for the year is expected to be 60 to 70% of underlying net profit after tax and non-controlling interest. Overall, I'm very proud of the progress we have made and the commitment of our team members to providing excellent care for our patients while we transform and strengthen the business for the future. And with that, I'll open up to questions.