Ramsay Health Care Limited

and thank you for standing by. Welcome to the Ramsey Sontay Q1 results presentation conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a Q&A session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Alternatively, you may submit your question via the webcast. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speakers today, Pascal Rocher, Group CEO, and Clément Laffey, Group CFO. Please go ahead.

Okay. Thanks a lot. Thanks, all of you, for joining this Q1 One Festival Day. So, today, we will comment to the results we have just been releasing yesterday evening, and I am so with Claymore Lafayette, the group CFO. Entering into this Q1 result on the page number four, if we were to summarize in a couple of seconds, we would say that we have delivered a solid Q1 performance with continued revenue growth and improved operational performance. As a matter of fact, the revenue has reached €1,233,000,000, which is a plus 2.9% growth versus the same quarter of last year. Would we were to compare in constant currency, it is a 2.6% growth. What has driven this growth? In fact, it has been driven by higher MSO activity. As an example, for France, the MSO admission has increased by 4.1%, targeted efforts driving a huge increase in day medicine care developments in France, and continued strength in the Nordic. But beyond this growth, we are pleased to share with you that the ADPA for Q1 has been issued at 121 million of euros versus 112 last year, which represents a 9.8 margin. Please keep in mind that we are talking about Q1 with the seasonality effect of July and August. So an improved profitability driven beyond this revenue growth by productivity gain, disciplined cost control across all geographies, and, as you may recall, the ruling out the execution of the Sankyuran contract despite all these tariff headwinds. Beyond that, the leverage ratio has decreased versus Q1 last year, continued leveraging by 0.2 points. We will come back to this later with So, in this context, we maintain our short-term and mid-term financial outlook. Besides, in this slide, by the way, number four, there have been, during the last quarter, an important business development, a very hard outside litigation, going back to 2002, 2004, for one of the huge, important hospitals in Lille, called Jean Mermoz, there was an appeal ruling that took place and that confirmed that the group has no liability regarding the topic of the building more than 20 years ago. It means that there is a 57 million euros in damage that remains to be received pursuant to the decision and subject to further appeal by the opposite, I would say, opponents. So, that being said, if we go on the next page, during the Capital Market Day, we held on September 17th, we have shared with you our ambition for the next years to 2030, our strategy plan, Connecting Care 2030, to unlock the full potential of integrated care and reinforcement of the active portfolio management and efficiency measure. So, we are pleased to share with you a couple of deliveries that took place during Q1 on the five avenues. As an example, in order to keep on strengthening the integrated care offering in Sweden, the referral from a huge hospital to discharge patients, so to advance home care, inpatient palliative care, and inpatient rehabilitation, so the number of patients that have been proposed when discharged because they needed to be followed by one of a business unit, one of a team, has increased by 70% compared this one to Q1 2024, so two years ago. Talking about, once again, accelerating the additional profitable growth through new revenue stream, We are pleased to share with you that regarding imaging for France, in the last month, we have been rolling out two new units, one PET scan and one radiotherapy, by the way, in the Hôpital Les Peupliers in Paris. Regarding the third pillar, which is digitalization and AI, we keep on rolling full speed regarding the rollout of MDL scripts, so speech-to-text to relieve, I would say, the administrative burden and to free up some patient time for the doctor. It is done for all the American students, and now we are increasing the speed in the mental health a business unit in France, and with our own AI, Ramsey Compagnon tool, it once again kicks the box of better medical excellence and better efficiency, as an example, Ramsey Compagnon, now there is over 100,000 prompts per month, in September, a couple of days ago. Talking about portfolio management, we were committed during the CMD to say that in Valence, south of France, we will go from three facilities to one facility, reducing, by the way, the number of beds by roughly 50 beds, delivering additional BDA. It has been done as planned. on October 1st. And finally, regarding the continued cost optimization initiative, the Choosing Wisely, which is better for the patient and efficiency, is rolling out once again through various countries. And three weeks ago, we have been relocating the group exporter. We used to be in Paris. We are now in the suburb of Paris, and with a good, I would say, a good study. Another news to share with you on the next slide, during, once again, the CMD mid-September regarding the new board. Once again, would the demerger take place and would the Ramsey-Sante AGM on December 1st validate this content? New governance framework, we were saying. Once again, we confirm that the majority of the board will be constituted by an independent director through a very rigorous process. The chairman of the board will be independent. We're going to come back to this in a couple of seconds. The chairman of the audit committee will be independent, and all this refers to the French Provenance Code. Talking about the chairman, will be proposed, by the way, to the Ramses Santé AGM, Frédéric Collet, independent chairman of the board. Frédéric Collet has a long, long experience in the healthcare industry in France and on an international base. Having been the chairman of Novartis France, has been working in Sandoz, the head of the oncology worldwide. He has been, by the way, for four years in France, the chairman of the Association of the French Pharmaceutical Industry. And by the way, since a couple of years, he's on the board of the Institut Imagine, the largest institute for genetic disease in France, key, key, I would say, institute. He knows well Ramsey Santé because, as you know, we are a mission-driven company. He has been part of the last three years of this committee and very involved. He is, by the way, founder and the president of Biomasse Consort, senior advisor at Oradeo, and chairman of AI and Cancer Consortium. So, this is the key news in a nutshell I wanted to share, not to give you more granularity regarding the financial performance during the last few months. I'm giving the floor to Clément.

Thank you, Pascal. Good morning, good afternoon, everyone. Before presenting the next slide, so a reminder of the key message, Grosvenor Growth has been resilient and predominantly volume-driven, and the line for stability has improved at a higher pace than previous over the last quarter, thanks to performance plans despite a constrained tax environment, and we continue to deliver the company. So if we go to the page number eight, So, let us dig down in a couple of figures. Revenues increased by 2.9% over the last quarter, 2.6% at the constant ethics basis, growing all geographies and all segments of activities. As you can see on this bridge, the growth is quasi-exclusively organic-driven. Organic revenue growth remained resilient at 2.2% in France, with notaries increased, supported by a 4.1% increase in MSO volumes. notably supported by DEM Medicine, a growth that has been quite significant at around plus 40% over the last quarter. And this has been partly offset by the continued negative mixed effects with a shift from full hospitalization to ambulatory care. In the Nordics, organic growth is at 4.2%. driven by primary care development, as well as Saint-Johan, robust volume, as well as the effect of the new contract. If we go to the next page, let's have a look at our profitability. EBITDA has improved by 7.5% over the last quarter versus last year. plus €8 million, in spite of increasing inflation, notably in France, a minimum wage increase of 2.4% in June 26. And this inflation is not covered by the tarification, notably in France. So, how we achieved this profitability improvement? Organic growth, I mentioned it already. Saint-Germain new contract in Q1, and we expect to see a further effect in Q2, because we will be on the live for life basis on this contract, only starting from Jan next year. And I mentioned it as well, structural performance plan and cost containment initiatives. In order to navigate a constrained health environment, performance and operational execution is key. I will give you a couple of examples of what has been delivered in this area over the quarter. First of all, we mentioned the imaging units, the two new imaging units, so continue to accelerate in this area. I mentioned as well the day medicine care developing at a very significant pace. Further improvement in calling their accuracy with AI Non-medical staff reduction in France over the last quarter In the Nordics, very good cost control in pharmaceuticals in primary care Benchmarking between the units and with a further use of generic stress Removed or exporter, Pascal, you mentioned it And finally and we made also good progress in our portfolio management with the transfer of the activities of the balance unit as well as also some transfer of maternity wards. We are not stopping there. Additional actions have already been identified and will continue to accelerate in this step. If we go to the next page, regarding the leverage, leverage is typically higher in September than in June, affecting the normal seasonality of the business. Patients do not undertake non-emergency care during the holiday and summer prayers. But then we compare September with September last year, and two years ago, as you can see on this graphic, we are continuously leveraging the company, minus 0.2 over the last three years. thanks to EBITDA generation, operational cash flow improvement. We observed over the last quarter a positive working-care variation because the last year variation was negatively impacted by the reimbursement of French state advances, which was not the case this year. We also continue to work on the French DSO to reduce our delays. This has been combined with a selective capex policy, 4% of gross capex on revenues this quarter stable versus last year, with a clear priority on high-impact investments and on strategic priorities. So we further develop imaging visotherapy, and we also dedicate our capex to portfolio management initiatives. Forgetting the financing, so a key update of the quarter. Obviously, in July 2026, we need to mention the completion of the refinancing of our senior debt, 1.75 billion, including 200 million RTF, and growth. We pushed our senior debt maturities to 20.3 and simplified our balance sheet structures as well, providing higher flexibility. We also recharge our real estate financing on HPVB, Dijon Bourgogne in France, drawing a new trend of fiduciary loan. It's an illustration on how real estate is a way to secure good financing at attractive conditions. And maybe a last update on our hedging policy in a context where we see the interest rate increasing. We proactively manage and we optimize our hedging policy today 80% of our gross financial debt is hedged, again, versus to hedge and face the context of intriguing interest rates. So, at the conclusion, good start of the year, both in terms of ability to secure organic growth, transition into financial performance, and debt averaging. I'll say a word on the key perspectives for the months to come. So, first of all, executing, sorry, if we move to next page, page 12, yes, executing the performance plan, clearly, it's a priority, delivering the new strategy, sustaining supply and growth notably by leveraging our integrated healthcare offering. and maintaining high standards of care and enhancing the medical outcome. And all of this, combined with a strict capstone allocation, will contribute to deliver the company. As announced by Pascal, if we move to the page 13, We maintain and we confirm our guidance for the short and the mid-term. FY27, revenue growth between 2 and 3% at constant ethics and stable EBITDA margin versus stature. By FY29, revenue growth at 3% CAGR, per annum, and gradual EBITDA. ABDA margin improvement, growth cap tax at 4% of our revenue on average over the next three years, and continued delivery targeting a ratio net debt on ABDA PR price below 4.0. Thank you for your attention, and Pastor and I would be happy to take any of your questions.