ASX:BGD

www.bgdcorporation.com.au

April 2016

BGD

BGD STRATEGY
PRESENTATION

DISCLAIMER
This presentation has been prepared by BGD Corporation Ltd ABN 78 009 074 588 (BGD). Each Recipient of this presentation is deemed to have agreed to accept
it subject to the qualifications, limitations and disclaimers set out below.
None of BGD and/or its subsidiaries or their respective directors, officers, employees, advisers or representatives (Beneficiaries) make any representation or
warranty, express or implied, as to the accuracy, reliability or completeness of the information contained in this presentation, including any forecast or
prospective information. The forward looking statements included in this presentation involve subjective judgment and analysis and are subject to significant
uncertainties, risks and contingencies, many of which are outside the control of, and are unknown to, the Beneficiaries. Actual future events may vary materially
from the forward looking statements and the assumptions on which those statements are based. Given these uncertainties, you are cautioned to not place undue
reliance on such forward looking statements.
This presentation is a general overview only and does not purport to contain all the information that may be required to evaluate an investment in BGD.
The information in this presentation is provided personally to the Recipient as a matter of interest only. It does not amount to an express or implied
recommendation with respect to any investment in BGD nor does it constitute financial product advice.
The Recipient, intending investors and respective advisers, should:
Conduct their own independent review, investigations and analysis of BGD and of the information contained or referred to in this presentation; and/or
Nothing in this presentation is or is to be taken to be an offer, invitation or other proposal to subscribe for shares in BGD.
The Recipient specifically agrees, understands and acknowledges that some of the information contained herein has been provided by third parties, and the
Beneficiaries accept no responsibility for any inaccuracy, misstatement, misrepresentation or omission in relation to that information.

-1STRICTLY PRIVATE AND CONFIDENTIAL

THE BOARD AND MANAGEMENT OF BGD

The BGD Board and Management have a proven track record in building and growing healthcare assets

Shane Tanner
Non Executive Chairman
Shane brings 20 years leadership experience in healthcare and strategy culminating as CEO of Symbion Healthcare, one of Australia's largest diagnostic
business and Chairman of ASX listed healthcare business Vision Eye Institute
In addition to BGD, Shane is currently the Chairman of ASX listed companies including Funtastic Limited and healthcare business Paragon Care Limited
and a Non-Executive Director of Jayex Healthcare Limited

Jonathan Lim
Board

Executive Director
Jonathan background is in mergers and acquisitions, private equity and corporate finance. He is currently the Managing Director at Liverpool Partners, a
boutique investment and advisory company located in Sydney. Jonathan was also previously Investment Director at Arowana
At Liverpool Partners, Jonathan led the recapitalisation of BGD and has established a strong track record in the healthcare sector (as both investor and
advisor) including acting as a trusted advisor to a range of listed healthcare companies

Dr Todd Cameron
Executive Director
Dr Todd Cameron is the co-founder of Modern Medical Group and a fellow of the Australia College of General Practitioners . He has extensive
experience in allied health and medical services as a practising GP for over 18 years and developing the Modern Medical group into six medical clinics

Management

Todd is a VMA accredited GP Registrar supervisor and served as a Board member for five years for PivotWest the Local Division of General Practice and
is now sitting as a director on the Board of the regional Medicare Local

Justin Walter
CEO
Justin was previously the General Manager of the Health & Aged Care sector for Spotless Group. In addition, he has held a number of senior roles with
Healthscope including State Manager for Western Australia and Northern Territory as well as working with Ernst & Young in setting up their health
advisory practice in Western Australia
Justin has extensive experience in private healthcare and a strong clinical and public healthcare background
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THE ALLIED HEALTH AND MEDICAL SERVICES MARKET OPPORTUNITY

Market Growth

Macro Healthcare Drivers

AUSTRALIAN ALLIED HEALTH AND MEDICAL SERVICES MARKET

GROWING POPULATION

Australian population over 65 years old

25%

60.0

20%

55.0

15%

50.0

10%

An ageing population

22.4%

coupled with longer life

expectancies lead to
increased chronic illness
and a significant need for
increase in healthcare
services

15.1%

5%

45.0
40.0

47.4

50.6

54.7

52.9

0%
1975

2015

2055

INCREASING CHRONIC DISEASE

43.8
35.0

Australian population with 5+ chronic diseases

60%
50%

30.0

$bn

8.6%

FY10

FY11

FY12

FY13

FY14

Allied health and medical services accounted for 38% of total FY14 healthcare
expenditure or $54.7bn
Attractive industry fundamentals driving CAGR of 5.7% from FY10
to FY14

Industry Momentum

54%

Australians have a chronic

disease, and around 1 in 5
have at least two

40%
30%
20%
10%

Ageing has a strong

24%
1%

0%
0-14

association with chronic

disease

7%
15-34

35-64

65+

UPTAKE IN PRIVATE HEALTH INSURANCE

180
160
140
120

ACCUTE AND
HOSPITAL
BASED CARE

PREVENTATIVE AND
CONSUMER DIRECTED/
COMMUNITY CARE

About half of all

100

Index 2004-06 = 100

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Change in no. insured persons

Government funding
policies and private health
insurers are focused on
increasing efficiencies in
the health care system by
increasing focus on
preventative healthcare
and reducing treatments
within hospitals

BROAD SPECTRUM OF ALLIED AND MEDICAL HEALTH SERVICES

Allied health and medical services industry spans a range of business models. The Federal Government is a major funding source across the
platform of services

Mobile service (B2B)

Home Care (B2C)

Clinic based healthcare services

Trend of larger multi-disciplinary
clinics that offer a greater number
of practitioners and a range of
ancillary services on site

Provide a mobile workforce of

allied health practitioners to
retirement and residential aged
care facilities and workplaces

Range of services for home care /

community care
Consumer Directed Care will allow
individuals who select home care
greater freedom of choice, which
will transform the allied medical
sector

Including a range of other allied

health care services including
telehealth, ambulance services,
drug and alcohol abuse

General practitioners
Physiotherapy
Occupational therapy
Podiatry
Optometry
Speech pathology
Dietetics
Pathology (sub-let)
Other allied services

Pain Management
Physiotherapy
Occupational therapy
Podiatry
Optometry
Speech pathology
Dietetics
Other allied services

Nurses / carers
Respite care
Physiotherapy
Occupational therapy
Podiatry
Optometry
Speech pathology
Dietetics

After-hour services
Tele-health
Drug and Alcohol rehabilitation
centres
Pain management clinics
Respite clinics
Other

Australian Government (Medicare)

Private Health Insurers
Patient

Australian Government via

Consumer Directed Care (CDC)
Patient

Australian Government via Aged

Care Funding Instrument (ACFI) and
Medicare
Facility operator
Patient

Australian Government
Private Health Insurers
Patients

c.7,000 integrated medical clinics

c.36,000 allied health clinics

c.193,000 residential aged places

c. 112,000 independent living units

c.67,000 places

c.38,000 patients (respite care)

Business
Model

Funding

Market size

Other Allied
Health Services

Allied medical
health and
other services

General Practice and

Allied Health Clinics

Sources: AIHW, Australian Department of Social Services. 2013-14 Concise Facts & Figures in Aged Care, ACFA, IBIS World

-4STRICTLY PRIVATE AND CONFIDENTIAL

SHIFT OF GOVERNMENT FUNDING AND SUPPORT

Government funding policies are focused on increasing efficiency in the healthcare system. Reduction in hospital funding and increasing
support of allied health and medical services
Shift in Hospital Funding1

Medicare and Government Health Programs2

Historical Medicare funding for the medical clinic sector
9

Public Hospital Budget

40

($billion)

35

($billion)

45

Old spending
arrangement

30

Medicare funding has increased to $8.0 billion at a CAGR

of 7.0% from FY10 FY15

Government has implemented a range of key programs

5
FY10

FY11

FY12

FY13

FY14

including GP Super Clinics Programme ($650m), Health

Networks ($842m) and After Hours Care

FY15

New spending
arrangement

15

funded by the Federal Government via Medicare

25
20

Allied health and medical services healthcare is principally

Home Care3

10

Funding of $2.4bn with a growth CAGR of 10% from

5
0
2012-13

2016-17

2020-21

2024-25

The Federal Government is shifting the burden of

CDC Packages
2015:

CDC Packages
2022:

66,000

140,000

healthcare services from acute care to preventative care

include allied health and medical services, with over $80
billion savings estimated by 2024-25

Government healthcare grants

25

Home Care services via Consumer Directed Care (CDC)

15

2Source:

Australian Federal Government (Budget 2014-15)

Department of Human Services (Medicare Australia Statistics)

elderly and their families have the opportunity to

procure the specific services they need including allied
health services

NDIS will provide support for Australian individuals with a

Projected NDIS expenditure on disability support

services health via:

1Source:

With the introduction of Consumer Directed Care(CDC)

Disability Care4

Shift of funding and role to allied health and medical

significant and permanent disability

20
($billion)

Respite care via NDIS which takes over all industry

funding as it rolls out across the nation (expected to
complete by 2020)

FY14 FY17

10

Overall expenditure of aged and disability care is

A$22.1bn

expected to reach $22.1bn in 2019-20 and demand for

service is likely to increase as a result of the trend

A$7.2bn

The scheme will be rolled out nationally from 2016.

0
FY12

Existing trial sites have been operating since 2013

FY15

-5STRICTLY PRIVATE AND CONFIDENTIAL

3Source:
4Source:

Aged Care Financing Authority (Third Report on the Funding and Financing)
National Commission of Audit

OUR VISION
BGD will seek to be the pre-eminent allied and medical healthcare service provider in Australia

KEY COMMENTS
BGDs strategy includes establishing an
integrated healthcare business with a focus
on:
General Practice
Allied Health
Low Acute Procedural Facilities

Target a range of operational modalities: (i)

multi-disciplinary clinics that offer multiple
doctors and allied health practitioners ; and
(ii) through mobile or embedded
practitioners (predominantly aged care,
home care and disabled)

Target a diversified funding mix including

Government (Medicare, ACFI, NDIS and CDC)
and private billings

Target a nationwide presence for all service

offerings

General Practice
General Practitioners
Chronic Disease
Management
Pathology (sub-let)
Mental Plans
Care Plans

Allied Health

Physiotherapy
Occupational therapy
Podiatry
Optometry
Dietetics
Respite Services
Home care services

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Low Acuity Procedures

Endoscopy
Orthotics
Bariatrics
Other low acuity day
procedures

BGD COMPARABLES
BGD will be well priced in the healthcare services market

Ticker

Name

Country

Market Cap
(AUD$'mils)

EV
(AUD$'mil)

LTM
Revenue

LTM
EBITDA

EV/Revenue
FY15

FY16e

EV/EBITDA
FY17e

FY15

FY16e

EV/EBIT
FY17e

FY15

FY16e

P/E
FY17e

FY15

FY16e

FY17e

AUSTRALIAN COMPARABLES (HEALTHCARE PROVIDERS AND SERVICES)

Healthcare Facilities

ASX:PHG Pulse Health Limited

AU

ASX:ONT 1300SMILES Limited

AU

ASX:IDX Integral Diagnostics Limited

AU

ASX:PSQ Pacific Smiles Group Limited

AU

ASX:VET Virtus Health Limited

AU

ASX:PRY Primary Health Care Limited

AU

ASX:HSO Healthscope Limited

AU

ASX:SHL Sonic Healthcare Limited

AU

ASX:RHC Ramsay Health Care Limited

AU

110.5

108.0

64.0

5.3

1.7x

1.4x

0.8x

20.3x

10.6x

5.9x

26.8x

12.0x

6.9x

35.4x

14.8x

10.8x

162.9

155.5

37.0

12.2

4.2x

4.0x

3.6x

12.7x

11.5x

10.5x

15.6x

14.4x

13.1x

26.3x

21.8x

19.6x

193.9

244.8

162.0

34.7

1.5x

1.5x

1.4x

7.0x

7.0x

6.8x

9.5x

9.3x

9.2x

12.1x

11.9x

11.7x

275.1

266.0

79.0

16.7

3.4x

3.1x

2.6x

15.9x

13.2x

10.9x

21.9x

17.7x

14.6x

31.7x

26.2x

21.4x

533.2

687.1

253.0

64.0

2.7x

2.6x

2.5x

10.6x

10.0x

9.5x

12.7x

12.0x

11.3x

20.1x

15.7x

14.5x

1,929.3

3,041.6 1,655.0

358.1

1.8x

1.8x

1.8x

8.5x

7.9x

8.2x

12.7x

13.5x

14.6x

17.3x

16.8x

17.8x

4,632.7

5,765.6 2,217.0

391.1

2.6x

2.5x

2.3x

14.7x

14.1x

12.7x

19.0x

18.3x

16.5x

28.3x

24.1x

21.8x

7,650.0

10,188.6 4,639.0

727.1

2.2x

2.0x

2.0x

14.0x

11.7x

11.1x

18.3x

15.6x

14.7x

25.2x

17.5x

16.8x

15,915.5 8,190.0 1,140.3

1.9x

1.9x

1.8x

13.9x

12.6x

11.7x

19.8x

17.8x

16.3x

33.0x

26.7x

23.9x

High

4.2x

4.0x

3.6x

20.3x

14.1x

12.7x

26.8x

18.3x

16.5x

35.4x

26.7x

23.9x

Low

1.5x

1.4x

0.8x

7.0x

7.0x

5.9x

9.5x

9.3x

6.9x

12.1x

11.9x

10.8x

Median

2.2x

2.0x

2.0x

13.9x

11.5x

10.5x

18.3x

14.4x

14.6x

26.3x

17.5x

17.8x

Mean

2.4x

2.3x

2.1x

13.1x

10.9x

9.7x

17.4x

14.5x

13.0x

25.5x

19.5x

17.6x

12,472.0

TOTAL GROUP

Source: Capital IQ 13 April 2016

-7STRICTLY PRIVATE AND CONFIDENTIAL