Reporting Summary

Sonic Healthcare Limited (SHL)

1H Year Results – Released 15/02/17

  • Beat consensus forecasts for NPAT, revenue but missed on EBITDA

Financial Results

  • Statutory NPAT of $2.48b reported which was slightly better than consensus estimates of $2.45B
  • EBITDA of $413.8m was lower than consensus estimates of $416.7m
  • Revenue of $2.48b reported was better than consensus estimates of $2.45b
  • Interim dividend of 31 cps, 20% franked payable on 11 April

Operational Key Points

  • Australian Pathology:
    - 7% growth, 4% organic ahead of Medicare market data
    - Modest earnings growth excluding APP acquisition
    - New state of the art laboratory for Sulivan Nicolaides Pathology, Brisbane
  • USA:
    - 3.3% organic revenue growth continuing growth momentum of recent years
    - Ongoing strong growth at CPL, Sonic’s largest US lab based in Texas
  • Germany:
    - 6% organic revenue growth, well above market growth

Management Outlook

  • On track to achieve FY guidance of $876m EBITDA, usual seasonal earnings weighting to 2H
  • Ongoing strong organic revenue growth of around 5% expected, underpinned by industry drivers and strong established brands
  • Announced synergistic acquisitions and hospital JV’s to enhance earnings growth in FY18
  • Ongoing pipeline of acquisition and JV opportunities
  • Technology and automation, including GLP systems, boosting efficiencies
  • Infrastructure investments in recent years creating capacity for future growth and efficiencies
  • Geographic diversification provides growth opportunities and risk mitigation

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Michael Ron

Research Analyst

Michael has been trading equities since 2003 and since joining DJ Carmichael in 2004 has worked in numerous roles in operations, trading, compliance and research. Michael’s expertise is in trading and equity strategy using a combination of both technical and fundamental analysis.

Michael holds a Graduate Diploma in Applied Finance, Diploma of Financial Markets, Diploma of Financial Planning, Advanced Diploma of Business Administration and is currently studying towards a Master of Applied Finance.