Annual Report 2022People caring for people TABLE OF CONTENTS
1 INTRODUCTION
2 HIGHLIGHTS
3 CHAIRMAN & MANAGING DIRECTOR’S REVIEW
4 ABOUT RAMSAY HEALTH CARE
5 KEY RISKS
6 OPERATING AND FINANCIAL REVIEW
7 RAMSAY CARES
8 GOVERNANCE
9 REMUNERATION REPORT – AUDITED
10 DIRECTORS’ REPORT
11 FINANCIAL RESULTS
12 INDEPENDENT AUDITORS' REPORT
13 ADDITIONAL INFORMATION
14 CORPORATE DIRECTORY & KEY DATES
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Annual Report 2022
About this reportThis report has been designed to be read in its entirety. Key aspects of the Directors Report are found throughout the document, including Section 5 Key Risks, Section 6 Operating and Financial Review, Section 9 Remuneration Report, and Section 8 Corporate Governance Statement. This information should be read in conjunction with the Financial Statements in Section 11.This is the first year that the Annual Report has been prepared with reference to the Value Reporting Foundation’s Integrated Reporting Framework. We have used this framework to outline the key value drivers of the business performance, the Company’s strategy and the key trends driving it and the risks and opportunities around achieving the strategy.Ramsay is committed to progressing the United Nations Sustainable Development Goals (SDGs) and, where possible in this report, we have mapped our activities to priority goals.Further information on our sustainability performance is contained in our FY22 Impact Report, which is published in October.Sustainable Development GoalsWe are committed to driving action toward the Sustainable Development Goals (SDGs), as adopted in 2015 by the United Nations and member countries.For more information about our reporting suite, visit our website ramsayhealth.com/Investors/Annual‑and‑Financial‑Reports 1.
Introduction
Who We Are
The Ramsay Way
Ramsay Cares
People are at the heart of our success.
As ‘people caring for people’ there are three
key ways we approach our work every day.
We value strong relationships
Healthy working relationships lead to positive outcomes for all.
We look out for the people we work with and we respect and
recognise them. Strong healthy relationships are the foundation of
our stakeholder loyalty.
We aim to constantly improve
We do things the right way. We enjoy our work and take pride in our
achievements. We are not afraid to challenge the status quo to find
better ways.
We seek to grow sustainably
Maintaining sustainable levels of profitability are only part of our
success. We prioritise long term success over short term financial
gains because we care about our people, our community and
our planet.
The Ramsay Cares Sustainability Strategy
unites our global businesses in a shared
vision for sustainability. Ramsay Cares focuses
on fostering healthier people, stronger
communities and a thriving planet. It reaffirms
that we are here to have a positive impact for
current and future generations.
Ramsay Cares has three sustainability pillars:
Learn more about our Ramsay Cares
Sustainability Strategy online >
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2.
Highlights
In FY22, we maintained focus on our medium
to long term strategy - investing to optimise
our world class hospital network for future
demand, while entering into new and
adjacent services. To support this, we are
investing in our people, our digital and data
roadmap and have continued Ramsay's long
standing commitment to research and clinical
trials. These investments place Ramsay in a
strong position to benefit from the growth in
demand for healthcare services.
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Financial
Ramsay's financial performance was impacted
by the disruption to activity and higher costs
flowing from the increase in COVID cases in the
community across all regions.
116.1cps
Fully diluted EPS per share declined 39.7%
on FY21
97.0cps
Dividend per share declined 36% on FY21
$2.2bn
Invested in organic and inorganic growth
strategies over the fiscal year
2. Highlights
Ramsay Health Care Limited
Annual Report 2022
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Caring for People• 46% of senior leadership and 43% of non-executive directors are women.• Hundreds of participants in new leadership, nursing and allied health advancement programs.• Approx. 300 people now trained in Mental Health First Aid.25,000+Ramsay Santé employees in France covered by a landmark ‘Quality of Life & Working Conditions’ agreement.Caring for Planet• Group-wide commitment to net zero greenhouse gas emissions by 2040.• Avoided or replaced more than 38 million single-use plastics.• 2,650kw rooftop solar system rollout in Australia.100%Ramsay UK and Elysium switched to 100% renewable electricity.Caring for Community• Enabling >1,000 clinical research projects.• Supporting 23 start-ups and 7 community associations working in preventative healthcare. • Supported communities in need in each region.25%More than a quarter of Ramsay suppliers (by share of spend) completed corporate social responsibility assessments through an independent compliance scheme. 3.
Chairman & Managing
Director’s Review
Investing for Growth
We continue to have absolute confidence in
the future growth in demand for healthcare
services and so, despite the challenges
created by further waves of COVID, in
FY22 we invested approximately $2.2bn
in organic and inorganic growth strategies
to upgrade and expand our facilities and
broaden our service platform. This included
$276m investment in our brownfield and
greenfield development pipeline with a
number of new developments completed
during the year and $94m in growth
projects, including new imaging equipment,
to drive activity levels in our facilities.
We have also continued to invest in our
digital and data foundations with the aim
of leveraging our existing business base
and supporting our entry into adjacent
health services.
We have made two acquisitions of note this
year, the mental health services business
Elysium Healthcare (Elysium) in the UK and
Swedish speciality health care business,
GHP Specialty Care (GHP). Both businesses
build on our existing capabilities and are
expected to be EPS accretive in FY23.
The Elysium business in particular comes
with a strong pipeline of new projects
that we are already pursuing to meet the
strong demand for acute mental health care
services in the UK. The focus in the UK and
Nordics will be on extracting synergies and
integrating the businesses.
Financial Results
The business continued to be impacted
by COVID reflecting the increase in cases
in the community in all our markets.
Government mandated surgical restrictions
and movement and isolation orders resulted
in lower activity, higher costs and a change
in case mix. As the world moved to
“living with COVID” during 2HFY22 the
healthcare sector continued to juggle the
impact on activity levels and costs of
last-minute cancellations by doctors and
patients combined with higher labour costs
as a result of staff sick leave.
Revenue for the year in constant currency
terms increased 4.6% reflecting good
growth in the Nordics region, a function of
the reduced impact of COVID in the region
and the exposure to the primary health care
sector, combined with initial contributions
from Elysium for five months and GHP for
two months. Net Profit After Tax (NPAT)
declined 39% to $274m impacted by
reduced activity levels and higher costs.
The estimated impact to EBIT of the COVID
disruption in Australia was $264m.
The Board determined a fully franked final
dividend of 48.5 cents per share, which was
flat on the interim dividend, taking the full
year dividend to 97cps.
Investment in Our People
As with all healthcare providers, workforce
attraction, retention and well being remain
issues in all our markets. Our group-wide
People strategy focuses on developing
capability, culture and developing the best
people in healthcare. In FY22 we lifted our
investment in a range of activities to grow
our workforce through graduate programs,
cadetships, and reskilling programs.
A lot of our focus has been on developing
leadership skills at all levels of the business
to enable our success well into the
future. To this end during the year we
were pleased to have 49 rising leaders
participate in our executive leadership
program, which aims to accelerate their
growth and reinforce our global network.
We have also launched a range of nursing
leadership and upskilling programs to
support and advance our people on the
front line of the business.
During the year Ramsay Santé became the
first European healthcare provider to sign
a ‘Quality of Life & Working Conditions’
agreement with unions covering its 28,000
employees in France. This ambitious
agenda includes initiatives targeted at the
quality of life at work, work life balance and
health and safety.
Dear Fellow Shareholder,
We are really proud of what our people
have achieved over the last few years and
the ongoing role Ramsay has played in
supporting the response to the COVID-19
(COVID) pandemic.
Our people and doctors have continued to
assist governments across all our regions
through the treatment of COVID cases, the
treatment of critical non COVID patients
and running activities such as vaccination
and testing clinics. Their commitment to our
patients has never wavered and we are
grateful for the expertise and dedication of
our outstanding Ramsay teams.
At the same time, as they have always
done, our people have supported our local
communities financially and with healthcare
services and supplies through crisises
such as the floods in Australia and the
conflict in Ukraine. We would like to take
this opportunity to thank our people for
continuing to support our patients and
the communities in which we operate,
embodying Ramsay’s purpose, of 'People
Caring for People'.
Throughout the pandemic, consistent with
Ramsay’s values, we have taken the
decision to retain our core hospital
operations and staffing levels. While this
approach has impacted profitability in the
short term it does mean that we are well
placed to ramp up our activities and service
our patients and communities as volume
starts to improve.
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Annual Report 2022
3. Chairman & Managing Director’s Review
Ramsay Health Care Limited
Ramsay Cares
We are very proud of the progress we have
made on our Ramsay Cares sustainability
strategy, which focuses on action to support
healthier people, a thriving planet and
stronger communities.
A major milestone for the business
this year has been establishing a
Group-wide commitment to science-based
targets to achieve net zero greenhouse
gas emissions by 2040. Reducing our
environmental footprint is important to our
people and our business resilience, and
we achieved our goals to reduce energy
and greenhouse gas emissions intensity
last year. Initiatives launched to meet our
goals included Ramsay UK and Elysium
switching to 100% renewable electricity,
a major solar panel roll-out in Australia,
shifting to more energy efficient lighting and
heating and cooling in our facilities and
numerous operating theatres globally have
joined the switch to more environmentally
friendly anaesthetic gases.
With sustainability at the heart of our
strategy we will continue to attract talent
and investment to build the resilience of
the business.
Board Changes
During the year we were pleased to
welcome Steve Sargent to the Board
following the retirement of Peter Evans last
year. Steve brings to the Board significant
executive experience managing businesses
in international markets and has broad
experience across industries including
medtech, technology and financial services.
His appointment has further diversified the
Board’s skills and experience
We continue to assess our Board renewal
strategy however we are conscious of
the need to ensure our expertise and
experience in the acute care hospital sector
and in particular Ramsay is preserved,
recognising the significant renewal our
Board has undergone over the last
few years.
Building our Executive Team
We have announced a number of new
senior appointments over the last twelve
months. Reflecting the importance we have
placed on our updated strategy, we were
pleased to announce that Dr Andy Jones,
formerly the CEO of our UK business,
has been appointed our first Group Chief
Growth Officer with responsibility for our
strategic transformation agenda. Following
on from this appointment the former COO of
our acute hospital business in the UK, Nick
Costa has been appointed the CEO of that
business and has joined Ramsay's Global
Executive Committee.
The importance of digital and data as
one of the critical enablers to deliver
on our strategy, is reflected in the
appointment during the year of a Group
Chief Data & Digital Officer, Dr Rachna
Gandhi, to lead the Australian digital
and IT teams, while also working with
the international teams to develop and
deliver the global digital strategy and data
management framework.
Following the acquisition of Elysium in
January, we were very pleased to welcome
the CEO of Elysium Healthcare, Joy
Chamberlain to Ramsay's Global Executive
Committee. Joy's extensive experience
in the mental health care sector brings
invaluable knowledge and skill sets to our
management team in one of our key areas
of clinical focus.
Strategic Direction
and Outlook
As already noted we have continued to
invest in the four pillars of our strategy to
drive future growth.
The first pillar is growing, modernising,
and leveraging our world class hospital
network designed to strategically grow
our existing market share through
organic growth, brownfield and greenfield
expansion, and strategic acquisitions.
Investment in greenfield and brownfield
development and growth initiatives in FY23
is expected to be in the range $515-570m.
We are confident that this investment
is underpinned by the long-term trends
driving the health care industry including
key demographic changes and advances in
clinical practice.
The second pillar is to move purposefully
into new and adjacent services focused
on moving along the patient pathway,
retaining a relationship with the patient
by providing coordinated care using our
data and digital capabilities to improve the
experience for our patients and clinicians.
We will continue to assess bolt on and
partnership opportunities in all regions as
part of this pillar.
The third pillar is about extracting the
highest potential value from the business
through operational excellence. Building on
our strong global advantage in strategic
sourcing will continue to be one of the key
areas of focus along with driving efficiency
and productivity improvements when the
operating environment allows.
And finally, the fourth pillar is about
reinforcing Ramsay's strong organisational
foundations to underpin the strategy and
ensure we leverage our scale. Investment
in digital and data initiatives to transform
the business and drive efficiencies will be
accelerated to support our existing business
base, margins and deliver an integrated
healthcare experience for our patients.
In the near term the healthcare industry
continues to be under pressure from a high
level of COVID cases resulting in highly
restrictive procedures together with the flow
on impact on the workforce, impeding a
recovery in volumes and productivity. It
is promising to see the recent decline
in cases and hospitalisations in all
our markets.
In common with most industries, we
are also experiencing inflationary cost
pressure across our businesses. We will
be negotiating improved terms with our
payors to reflect this so that we are able to
achieve satisfactory levels of profitability
and maintain and support our staff and
suppliers. We look forward to working
constructively with our health funds and
governments to effectively manage through
the current inflationary pressures.
It would be remiss of us not to touch
on our engagement with KKR and its
consortium during the year and our recent
announcement in relation to the termination
of those discussions. We refer shareholders
to our announcement to the ASX on
26th September for the details. Please be
assured that we have not let this process
distract our people from delivering the best
care for our patients and realising the
growth opportunities within the business.
We believe the outlook for the Group
remains strong. Our world class hospital
network combined with our outstanding
people and clinicians give us confidence
that the business is well placed to
take advantage of the positive long-term
dynamics driving the healthcare industry.
We expect a gradual recovery in activity
levels through FY23 and more normalised
conditions from FY24 onwards.
In closing we would once again like to
thank our people, clinicians and patients
for supporting the business and each other
through what has been another difficult
period for the healthcare services industry.
Michael Siddle & Craig McNally
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4.
About Ramsay Health Care
Ramsay Health Care
(Ramsay) provides quality
healthcare through a global
network of clinical practice,
teaching and research.
Ramsay Health Care’s global
network extends across
ten countries, with over
eleven million admissions
and patient visits to facilities
in more than 530 locations.
Ramsay was founded in 1964 by Paul
Ramsay AO (1936-2014) and has always
focused on maintaining the highest
standards of quality and safety, being an
employer of choice and operating the
business based on a culture known as 'The
Ramsay Way' and our purpose of 'people
caring for people'. Ramsay listed on the
Australian Stock Exchange in 1997 and has
a market capitalisation of A$16.5bn1 and
an enterprise value (EV) of A$21.4bn1 (EV
of A$26.9bn inclusive of lease liabilities).
The Ramsay Group employs over 88,000
people globally. Ramsay’s operations are
split across four regions:
Australia
Ramsay Australia has 73 private hospitals
and day surgery units in Australia and is
Australia’s largest private hospital operator.
Ramsay operations include mental health
facilities as well as the operation of
three public facilities. In addition, Ramsay
has established the Ramsay Pharmacy
retail franchise network which supports
60 community pharmacies. Ramsay
Australia admits more than one million
patients annually and employs more than
33,000 people.
Europe
Ramsay Santé is the second largest
private care provider in Europe, operating
specialist clinics and primary care units
in approximately 350 locations across
five countries. In France, Ramsay Santé
has a market leading position, with 132
acute care and mental health facilities.
In Denmark, Norway, Sweden and Italy.
Ramsay Santé operates 210 facilities
including primary care units, specialist
clinics and hospitals. Ramsay Santé also
operates a 93-bed hospital in Italy. Ramsay
Santé employs around 35,000 staff and its
facilities treated approximately ten million
patients in FY22. Ramsay Health Care
owns 52.79% of Ramsay Santé which is
listed on the European financial markets’
platform Euronext.
UK
Ramsay UK has a network of 34 acute
hospitals and day procedure centres in
England providing a comprehensive range
of clinical specialties to private and self
insured patients, as well as patients referred
by the NHS. Ramsay also operates a
diagnostic imaging service and provides
neurological services through its three
neuro-rehabilitation facilities. Ramsay UK
cares for over 184,000 patients per year and
employs more than 7,000 people.
Ramsay recently acquired Elysium
Healthcare, a leading independent operator
of long-term medium and low secure
hospitals and complex care homes for
individuals with mental health conditions.
Elysium has 76 operational sites across
England and Wales. The business employs
approximately 8,000 people.
Asia
In Asia, Ramsay Sime Darby Health Care
Sdn Bhd operates three hospitals in
Indonesia and four hospitals in Malaysia,
employing more than 4,000 people. Ramsay
Sime Darby is a 50:50 joint venture
arrangement with Malaysian multinational
conglomerate Sime Darby Berhad.
1 Closing price as at 24th August 2022
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MalaysiaIndonesiaUnited KingdomRamsay UKRamsay Sime Darby AustraliaRamsay Australia United KingdomElysiumFranceItalySwedenDenmarkNorwayRamsay Santé
4. About Ramsay Health Care
Ramsay Health Care Limited
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Ramsay’s global portfolio of servicesStrengths of the global businessClinicsPharmacyAdjacent services in hospital and out of hospital²Primary CareOut of hospitalAcute Care/Sub-acute4Mental Health CarePharmacyImaging & Diagnostics Home care/residential careAllied Health3HospitalsDay Surgery CentreEmergency CentresRehab RecoveryMH5 Facility LD6 / Complex CareNeuroFranceSwedenItalyDenmarkNorwayUnited KingdomRSD1Australia1 RSD: Ramsay Sime Darby2 Includes Pathology3 Allied Health includes HealthPlus, Psych Clinics4 Sub-acute care includes Cancer, Gastrointestinal, Rehab5 MH: Mental Health6 LD: Learning DisabilitiesMarket leading positions and globally recognised brand Strong and constructive relationships with public sector stakeholdersDeep and experienced global leadership team and leadership developmentDiversified Portfolio – geography, payors, services mixEconomies of scale in procurementStrong embedded culture‘People Caring for People’Scale to invest in innovation, education and researchGold Standards of Care - clinical best practise – sharing of ideasCompetitive cost of capital and strong balance sheet 4. About Ramsay Health Care
Ramsay Health Care Limited
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Annual Report 2022
Clinical excellence, research and innovationClinical and stakeholder networksLeading physical and digital infrastructureResponsible use of natural resourcesAccess to financial capitalStrong culture, industry leading talentRamsay CaresCaring for PlanetRisk and GovernanceHow we create valueValue Drivers Strategic Vision To be a leading healthcare provider of the futureThe Ramsay WayStrong relationships · Sustainable growth · Constant improvementPeople Caring for PeopleAcute and Sub-acute Hospital CarePrimary Care ClinicsOut of Hospital Care Allied health, home care, diagnostics & imagingClinical Research & EducationClinical Research & EducationMental Health & Specialist Care ClinicsCaring for PeopleCaring for Community How we create valueRamsay creates value by investing in and leveraging our key drivers to create a convenient, integrated, efficient and sustainable healthcare services platform delivering quality healthcare experiences and outcomes for patients; an attractive, industry leading environment for our employees and clinicians; and a supportive and effective service for our payors. At the centre of everything we do is our purpose of people caring for people. 4. About Ramsay Health Care
Ramsay Health Care Limited
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Expanding, upgrading and investing in physical and digital footprint, FY22 global investment $2.2bn• $276m invested in greenfield and brownfield projects• $94m invested in growth projects including new imagining equipmentIntegrated patient centred care, delivering more services along the patient pathway and supporting public health system• Strategic growth in four key therapeutic areas of cardiology, oncology, orthopaedics and mental health• Network growth with the acquisition of Elysium and GHP Speciality Care• Inaugural doctor engagement survey Innovative care models, quality clinical outcomes, attracting best in class clinical specialists and partners• Maintained strong NPS results• Established 5 global Communities of Practice • Inaugural Clinical Excellence Summit• Over 1,000 clinical and research projectsFocus on improving environmental performance including recycling and reducing plastics and greenhouse gas emissions• Committing to Net Zero greenhouse gas emissions by 2040• Avoided or replaced more than 38 million single-use plastics• Switching to 100% renewable electricity in the UK• Installing over 5,000 solar panels in AustraliaCompetitive cost of capital, strong dividend payments and full rate of taxes paid• $371m in dividends paid in FY22• $229m in income taxes paid in FY22• Supportive banking relationships• Awarded APLMA syndicated SLL deal of the yearEmploys over 88,000people globally• Gender balance - 46% of senior leadership and 43% of non-executive directors are women• Hundreds of participants in new leadership, nursing and allied health advancement programs• 49 participants in global Ramsay Leadership Academy• Global Engagement and Enablement Survey• Recruited hundreds of new clinical and corporate graduatesOutcomesMeasuring our value 4. About Ramsay Health Care
Ramsay Health Care Limited
Megatrends
External trends play a critical role in our ability to create long term value for all stakeholders.
These factors are key inputs into the development of Ramsay's vision and strategy and will
shape our long-term legacy.
Trend
SOCIETAL &
DEMOGRAPHIC CHANGES
Description
• As Baby Boomers age in the western world, the population will have a higher proportion of people
in the 65-80 age demographic. This may result in an increasing prevalence of co-morbidities
impacting patient care and length of stay
• Governments investing in high profile public campaigns to improve lifestyle behaviours such as
smoking and drug abuse
• Growth in demand for mental health care services creating an increasing burden on the
healthcare sector
CHANGING PATIENT AND
DOCTOR EXPECTATIONS
• Patients seeking greater convenience and a consumer-centric experience
• Doctors seek to broaden pathway participation and enable ‘top of role’ opportunities
TECHNOLOGY CHANGE
• Digitisation of healthcare enabling convenient and continuous care. Lower cost care options
enabled by digitisation
• Digitisation driving the growth in wellness and prevention tools and businesses creating
increased competition
EMERGENCE OF
NEW COMPETITORS
CLINICAL INNOVATION
INCREASED PAYOR
SOPHISTICATION AND
PRESSURE ON
GOVERNMENT FUNDING
• Data enabling enhanced care coordination and clinical management
• Entry of new digitally-enabled lower cost competitors
• Earlier diagnosis as a result of improved screening / diagnostic techniques
• Lower cost interventional activity
• Clinical innovation enabling migration of care to lower acuity settings
• Reimbursement increasingly focused on value – cost and clinical outcomes
• Increasing sophistication in negotiations and leveraging of data in contract design
• Increasing demand for healthcare services due to the ageing demographic combined with the long
lasting impact of COVID-19 on the system will place pressure on government funding sources
CLIMATE CHANGE
• Climate change and extreme weather events have the potential to increase demand for services
eg respiratory problem, certain cancers
• May demand significant changes and investment in our facilities to adapt to local climate issues
and lower our environmental footprint
WORKFORCE
• A shortage of talent in the healthcare sector has been made more acute by the COVID-19 crisis
• Shortages across nursing and clinicians difficult to change in the short term and will have a
significant impact on capacity utilisation
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4. About Ramsay Health Care
Ramsay Health Care Limited
Strategy
We believe that Ramsay is uniquely positioned to take advantage of the megatrends facing the
industry, building on our global platform, enviable culture and strategic relationships to become
a leading healthcare provider of the future. Our strategy for growth and transformation is built
on four important pillars:
1. Growing, modernising and leveraging our world class hospital network
2. Moving purposefully into new and adjacent services
3. Operational excellence to deliver value for all stakeholders
4. Strong organisational foundations to underpin our achievements
Together, the pillars support our Vision, Mission and Purpose
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By growing, modernising and leveraging ourWorld Class Hospital NetworkAnd moving purposefully into New & Adjacent ServicesOUR VISION: To leverage our global platform and be a leading healthcare provider of the futureOUR MISSION: Creating a best-in-class, digitally enabled healthcare ecosystem - to change what is possible for your healthOperational Excellence will deliver value for all stakeholdersIntegrated patient-centred careStrong Organisational Foundations will underpin our achievementsOUR PURPOSE: People caring for peopleOrganic growthStrategic expansionStrategic growth in key therapeutic areasBroader digi-physical care deliveryNew services, existing regionsDiagnostic and imaging servicesNew payers and funding modelsExtended patient pathwayProcurementOperational efficienciesExcellence in service deliveryDigital and data transformationClinical excellenceIndustry leading talentRamsay Cares sustainability strategyStrategic partnerships and M&A capability
5.
Key Risks
We are committed to meeting high standards of risk management. Effective risk management
is the result of the collaborative endeavours of all key stakeholders and is engrained in our
Ramsay culture. Ramsay faces a number of business risks that could affect our operations,
business strategies and financial prospects. The key risks1 are described below, together with
relevant mitigation strategies.
Potential impact
How Ramsay is responding
Risk
COVID-19
COVID-19 continues to have a
significant impact globally.
• Government intervention in relation to the
nature and scale of surgeries
• Illness, quarantine, fatigue and mental
health impacts to our people
• Workforce shortages, including due to
health care as a profession being perceived
as less desirable
• Supply chain disruptions
• Higher inflation resulting in increased costs
• Detrimental economic impacts increasing
levels of unemployment that could
result in declines in private health
insurance membership
• Negative public perception of the
safety of hospitals impacting volume of
elective surgery
PEOPLE / WORKFORCE
People are Ramsay’s most
important asset and are
key to the organisation’s
ongoing success. It is important
that Ramsay continues to
attract and retain world class
talent and provides a safe
working environment.
• Inability to develop and implement strategy
• Increased costs to the business associated
with employee turnover and/or shortages
• Reputational damage and/or financial
penalties due to serious injury to a person
as a consequence of failure to maintain a
safe workplace
• Operational disruption due to strikes or
other forms of industrial action
Ramsay has developed strong relationships with
relevant government agencies and representatives in
the regions in which it operates. This helps to ensure
that the impacts to Ramsay (as part of the broader
health care sector) are understood by government
in considering the industry-wide response. Ramsay
has had in place, and continues to negotiate,
agreements with government in each of its key
operating geographies to provide Ramsay with a
level of cost recovery in return for such capacity
arrangements (except for France, where there is a
level of revenue recovery).
Ramsay is providing support to employees, including
through additional training, its Employee Assistance
Programs and other wellness initiatives.
Strict safety protocols have been implemented in
hospitals and Ramsay has supply chain strategies in
place to ensure adequate PPE.
Ramsay strives to continue to be an employer of
choice to attract and retain employees, by:
• Ensuring an attractive employee value proposition
(e.g. remuneration, flexible working, career
progression, succession planning, training
and development)
• Maintaining an effective workplace health and
safety framework. This framework includes policies,
training, incident management, monitoring and
reporting of safety performance
• Investment in projects, technology
and infrastructure
• Focussing on The Ramsay Way culture - People
caring for people
1 This report does not identify every risk that could affect Ramsay’s business and the actions taken to mitigate these risks cannot provide absolute assurance that a risk will not
materialise. Risks presented in this section are in no particular order.
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Annual Report 2022
5. Key Risks
Ramsay Health Care Limited
Potential impact
How Ramsay is responding
Risk
CLINICAL QUALITY & SAFETY
The safety of our patients and
the delivery of high quality
clinical care is fundamental to
Ramsay’s success.
• Reputational damage as a consequence of
poor clinical outcomes
• Financial loss resulting from potential
significant medical malpractice incidents
or claims
• Potential impact on ability to recruit and
retain clinicians and employees
RELATIONSHIPS WITH DOCTORS
The recommendation of a
patient’s doctor is often the
most significant factor in a
patient’s choice of hospital
in many of Ramsay’s regions.
Most doctors operating or
working at Ramsay’s hospitals
are not employees (other than in
Scandinavia) and therefore have
a choice of where to practice.
• Loss of doctors and associated
patient referrals
• Inability to provide leading clinical services
• Additional costs associated with doctor’s
decisions e.g. theatre times, use of supplies
and timing of patient discharge
GOVERNMENT POLICY & REGULATION
Ramsay operates in the
healthcare industry which is
subject to extensive laws,
regulations, policies and ethical
standards (which may vary
by jurisdiction). Government
policy may materially impact
the role of Ramsay in
provision of healthcare and/or
the affordability of private
health insurance.
• Policies may effectively reduce the role
of the private sector in a country’s health
system, including the involvement of the
private sector in the provision of healthcare
to public patients
• Economic factors or regulations may impact
the affordability of private health insurance
(particularly in Australia) and result in a
reduction in the level of private health
insurance coverage
GEOPOLITICAL
Ramsay’s global operations
rely on international supply
chains. Geopolitical tensions
may impact cost and availability
of supply which may impact the
role of Ramsay in the provision
of healthcare.
• Cost increases caused by
geopolitical tensions
• International sanctions may impact the
availability of supply
FUNDERS - HEALTH INSURANCE FUNDS & GOVERNMENT SOURCES
Ramsay relies on funding
provided by private health
insurers and governments in
the provision of its services.
Changes in government or
health insurance funding could
have a material impact on
Ramsay’s operations.
• Reduction in earnings from health insurance
funding due to a decline in the profitability
of health funds, a decline in health fund
membership or an inability of health funds
to obtain premium increases (because of
government regulation or other restrictions)
• Failure to reach satisfactory commercial
terms with major insurers or changes to
government funding arrangements
CYBER SECURITY
Ramsay handles and stores
personal information, including
health information, digitally
and in paper form for its
customers and employees.
A cybersecurity incident may
result in damage or interruption
to Ramsay’s information or
operational systems, or those
provided by third party vendors.
• Suboptimal patient experience or patient
harm due to delays or disruption to
service delivery
• Potential consequences for individuals
(including patients and employees) of a
privacy breach
• Increased costs as a result of recovery
strategies and/or financial penalties
• Reputational damage as a consequence of
a cyber breach
Ramsay has in place a comprehensive Clinical
Governance Framework, which includes:
• Clinical effectiveness to ensure a high standard of
quality and continuous improvement
• Clinical risk management ensuring our services are
safe and minimise risk of error
• Credentialing, licensing and training frameworks
• Consumer participation which involves patients
and carers in quality improvement activities and
business planning through feedback.
Ramsay continually invests in its facilities (e.g.
theatres, equipment, nurses, beds and suites) and
ensures it has strong relationships with its doctors
through regular support and engagement, including
providing education forums and opportunities for
innovative research.
Customer feedback (e.g. Net Promoter Score,
complaints, etc.) is closely monitored as this also
impacts on doctor recommendations to patients.
Ramsay closely monitors current and proposed
government policy and regulation in each country in
which it operates, including through:
• Maintaining and developing relationships with
Government in all regions in which it operates.
This takes place at all levels of government and at
various levels within the business (e.g. at a national
and local level)
• Membership and/or leadership in various industry
representative bodies to ensure input into
government healthcare policies and initiatives
Ramsay closely monitors its supply chain risks and
seeks to mitigate its risk through as number of
actions including:
• Good supplier relationship management
• Alternate supply arrangements
• Monitoring of international sanctions
• Global procurement strategy that leverages diverse
supply chains
Ramsay plays an important role in supporting the
health systems in the regions in which it operates and
works to foster strong working relationships with both
private health insurers and government funders.
Our commitment to clinical quality as well as provision
of cost effective, outcome focused care demonstrates
to third party funders the value in contracting
with Ramsay.
Cybersecurity risk is addressed through a Global
Cybersecurity Framework which includes controls
associated with prevention, detection and recovery.
In addition, the Framework is externally validated,
routinely tested and subject to ongoing review and
continuous improvement.
Annual Report 2022
15
How Ramsay is responding
Innovation is a key component of Ramsay’s strategy.
This involves exploring out of hospital opportunities,
digital strategies as well as investing in facilities (new
and existing) and new technologies to ensure that
Ramsay is meeting consumer needs now and in
the future.
Prior to undertaking any acquisition or development,
Ramsay undertakes comprehensive due diligence to
identify key risks and ensure appropriate valuation,
uses external advisors and all acquisitions are
considered by the appropriate executive committee
or the Board.
Ramsay’s capital management plan is designed to
ensure a strong balance sheet to support its strategy
over the medium to long term. This includes a plan
for maintaining diverse sources of capital, ongoing
monitoring and compliance with limits and other
thresholds as set out in the Treasury Policy. A robust
capital structure is maintained to provide capacity
within Ramsay's lender base at efficient pricing.
The balance sheet can be flexed in the short
term to accommodate strategic investments such as
acquisitions and capital expenditure.
The Treasury policy provides a framework for the
management and regular reporting to the Board
of financial risks including liquidity and refinancing
risk, interest rate risk, foreign exchange risk and
counterparty credit risk.
The Ramsay Cares Sustainability Strategy outlines
a shared vision for sustainability across the global
businesses. Ramsay Cares sets measurable targets
and is supported by an investment plan. Key
focus areas include the mental health and the
wellbeing of our people, setting the foundations
to reduce our energy and emissions intensity and
an emphasis on responsible sourcing within our
medical supply chains. This year, Ramsay has
committed to both near-term and long-term science
based decarbonisation targets to achieve net zero
greenhouse gas emissions consistent with a 1.5
degree pathway. Ramsay is continuing to build on risk
assessments in each region to identify climate related
risks and how they may impact our business. The
Ramsay FY22 Impact Report will include disclosures
informed by the Task Force on Climate-related
Financial Disclosures (TCFD) recommendations.
Ramsay has a framework to manage and monitor
its legal and regulatory obligations. This includes
compliance with local laws, employee training and
effective management of licensing and accreditation.
5. Key Risks
Ramsay Health Care Limited
Potential impact
Risk
COMPETITION, INNOVATION, DEVELOPMENTS & ACQUISITIONS
Ramsay’s growth strategy may
be impacted by industry
disruption, innovation, the
actions of our competitors,
the ability to identify future
acquisitions or generate returns
on developments.
• Limited growth or inability to
when compared to competitors
• Difficulty in attracting and
retaining employees
maintain earnings
• Limited improvement in service delivery
• Inability to fully respond to industry changes
• Redundancy of services and assets
CAPITAL STRUCTURE
Ramsay’s capital structure is
designed to support its strategy
and to be resilient to changes in
equity and debt markets.
• Constrained capacity to execute strategy
• Increased costs of funding
• Reduced availability of funding
• A lower credit rating likely leading to
an increase in funding costs and/or less
funding sources
SUSTAINABILITY & CLIMATE CHANGE
Ramsay is committed to
sustainability and being resilient
to a changing climate
through our Ramsay Cares
Sustainability Strategy.
• Loss of reputation leading to inability to
attract employees and capital investment
• Increased operating costs from being
inefficient and exposure to more extreme
weather events
• Missed opportunities in responding to a
transition to a low carbon economy
LEGAL & REGULATORY
Ramsay operates in a highly
regulated industry. Hospitals
are required to be licensed
under various legislation in the
jurisdictions within which they
operate. Ramsay may also be
involved in disputes or litigation,
for example, with patients,
suppliers, funders, regulatory
bodies, or employees.
• Inability to operate a hospital if it is
not accredited
• Reputational damage due to lack of
compliance or disputes
• Costs associated with litigation (e.g. legal
costs and damages) or lack of compliance
(e.g. penalties)
16
Annual Report 2022
6.
Operating and Financial Review
Martyn Roberts,
Group Chief Financial Officer
Group Performance
1. Key Highlights
• The financial impact of COVID in FY22 was the most severe of
the pandemic due to the high incidence of COVID cases in the
community across all regions and elective surgery restrictions
imposed in Australia. The result reflects the challenges of the
operating environment including disruption to activity levels and
an increase in labour and PPE costs. The estimated impact of
the disruption in Australia at the EBIT level net of government
support payments ($12m) was $264m
• During FY22 Ramsay continued to make its facilities and clinical
capabilities available to support public health systems in the
regions in which it operates, to assist in the response to
further outbreaks of the COVID virus. In return, governments
contributed to the overall viability of the private hospital sector
through contractual or legislative support
• Ramsay continued to invest in the business to drive future
growth. Capital expenditure for the period was $733.4m
compared to $674m in the pcp. This included $350m in
greenfield and brownfield developments and growth projects
including investment in diagnostics. A number of new facilities
were opened during the period that will contribute to earnings
in coming years
• Ramsay successfully completed a number of acquisitions during
the year. The result includes a 5 month contribution from the
Elysium Healthcare (Elysium) acquisition which was completed
on 31st January 2022 and an initial 2 month contribution
from the Ramsay Santé acquisition of GHP Speciality Care AB
(GHP) completed at the beginning of May. The combined EBIT
contribution was approximately $26m. Both Elysium and GHP
are performing in line with expectations and are expected to be
EPS accretive in FY23
• Non-recurring items had a negative impact on EBIT of $60.5m
compared to a negative impact of $34.2m in the pcp.
• A final fully franked dividend of 48.5cps was determined taking
the full year dividend to 97.0cps
Ramsay CEO and Managing Director Craig McNally with Elysium CEO
Joy Chamberlain, Ramsay Group Chief People Officer Colleen Harris,
Elysium Executive Medical Director, Prof. Quazim Haque, Elysium
CFO Keith Browner, Cinical Lead at Crossley Place, Chloe Burrows
and Ramsay Group CFO Martyn Roberts outside an Elysium facility,
Crossley Place, in Prescot, UK
Annual Report 2022
17
6. Operating and Financial Review
Ramsay Health Care Limited
1 Overview of Results
Year Ended 30 June A$'m
Asia Pacific
UK
Europe
Total segment revenue & other income
Asia Pacific
UK
Europe
EBITDAR
Rent and short term low value leases
Asia Pacific
UK
Europe
EBITDA
Depreciation
Amortisation & impairment
Asia Pacific
UK
Europe
EBIT
Financing costs (AASB16 Leases)
Net other financing costs
Profit before Tax
Income Tax Expense
Net Profit after tax
Attributable to non-controlling interests
Net Profit after tax attributable to owners of the parent
Final dividend per share (¢)
Basic Earnings per share (after CARES dividend) (¢)
Fully diluted earnings per share (after CARES dividend) (¢)
Weighted average number of ordinary shares (m)
Fully diluted weighted average number of shares (m)
1 Constant currency
1.1 Revenue Breakdown by type
Year Ended 30 June A$'m
Revenue from patients and other revenue
Revenue from governments under COVID support contracts
Revenue from contracts with customers
Interest income
Other income - income from government grants
Other income - income from sale of development assets
Other income - net profit on disposal of non-current assets
Total revenue and other income before intersegment revenue
1 Constant currency
2022
5,361.2
1,321.5
7,064.4
13,747.1
725.5
82.0
1,160.1
1,967.6
(137.4)
713.6
80.1
1,036.5
1,830.2
(881.8)
(57.1)
467.3
(26.2)
450.2
891.3
(242.2)
(110.6)
538.5
(159.3)
379.2
(105.2)
274.0
48.5
116.3
116.1
227.8
228.3
2022
13,174.0
138.4
13,312.4
36.2
402.0
1.8
23.8
13,776.2
2021
5,464.1
1,024.1
6,839.9
13,328.1
866.5
182.4
1,154.3
2,203.2
(149.7)
855.1
181.2
1,017.2
2,053.5
(849.3)
(71.6)
636.0
92.8
403.8
1,132.6
(234.2)
(156.8)
741.6
(230.1)
511.5
(62.5)
449.0
103.0
193.2
192.6
227.7
228.4
2021
12,435.5
428.7
12,864.2
7.1
428.3
20.4
12.3
13,332.3
Chg (%)
(1.9)
29.0
3.3
3.1
(16.3)
(55.0)
0.5
(10.7)
8.2
(16.5)
(55.8)
1.9
(10.9)
(3.8)
20.3
(26.5)
(128.2)
11.5
(21.3)
(3.4)
29.5
(27.4)
30.8
(25.9)
(68.3)
(39.0)
(52.9)
(39.8)
(39.7)
-
-
Chg (%)
5.9
(67.7)
3.5
409.9
(6.1)
(91.2)
93.5
3.3
Chg(%) CC1
(2.0)
27.5
6.3
6.7
(16.9)
(55.1)
3.7
(9.3)
9.3
(16.7)
(55.9)
5.3
(9.3)
(5.6)
20.3
(26.6)
(126.4)
15.9
(19.7)
(4.4)
29.5
(25.1)
28.7
(23.5)
(77.2)
(37.6)
-
-
-
-
-
Chg (%) CC1
7.4
(68.1)
4.1
422.7
(3.3)
(91.3)
104.3
4.6
Group revenue from patients increased 5.9% on the pcp, the improvement reflecting the change in the nature of Ramsay UK's agreements
with the NHS compared to the pcp combined with a five month contribution from the Elysium acquisition ($284.3m) and organic and inorganic
growth in the Nordics region. Reflecting the strength of the Australian dollar against the euro during the financial year, in constant currency
terms revenue increased 7.4%.
During FY22 Ramsay continued to make its facilities and clinical capabilities available to support public health systems in the regions in which
it operates, to assist in the response to further outbreaks of the COVID virus. In return, governments contributed to the overall viability of the
private hospital sector through contractual or legislative support.
Revenue from "Governments under COVID support contracts" reflects payments received under agreements with governments in both the
UK ($126.1m) and Australia ($12.3m) that were designed to compensate Ramsay for the net recoverable costs associated with maintaining its
18
Annual Report 2022
6. Operating and Financial Review
Ramsay Health Care Limited
facilities and workforce for use by the public sector if required1. In FY22 Ramsay UK only operated under a support contract for the period 10th
January to 31st March 2022 whereas in FY21 the business operated under different support contracts for the period 1st July 2020 through to
31st March 2021.
"Other income from government grants" reflects payments received under the French Government decree which provided compensation for
both lost revenue and the costs to Ramsay Santé providing its facilities and services to assist with supporting COVID patients. It also includes
compensation for COVID related costs from governments in the Nordic region and the French Government compensation for the material wage
increase granted to nurses across the system in 2020.
Income from the sale of development assets relates to the sale of consulting suites in Australia.
Net profit on the disposal of assets reflects the sale of assets in France, the Nordics and the Asia Pacific region.
2 EBIT
Group EBIT
Non-Recurring Items in the FY22 Result
A$'m
Net profit on disposal of non-current assets and businesses
Expensing of IT and other assets
Impairment of fixed assets
Refund of prior year rent
Inventory write off
Write back of a provision for indemnities and warranties
Non-recurring employee costs
Transaction costs/ Acquisition, disposal, and development costs
Total EBIT Impact
Bank loan facility break costs netted against interest savings
Net swap mark to market movements
Total PBT Impact
1 Net of a loss on sale of facilities in France of $4.7m
Non-Recurring Items in the FY21 Result
A$'m
Net profit on disposal of non-current assets
Transaction costs/ Acquisition, disposal, and development costs
Impairment/write off of fixed assets
Total EBIT impact
One-off tax credit
Asia Pacific
8.6
(12.6)
(10.1)
-
(4.3)
-
(10.0)
(11.8)
(40.2)
(7.4)
-
(47.6)
Asia Pacific
11.9
(5.7)
(7.1)
(0.9)
-
UK
-
(0.2)
-
-
(18.0)
-
-
(26.2)
(44.4)
-
-
(44.4)
UK
-
(8.7)
-
(8.7)
12.8
Europe
10.61
-
(1.2)
8.3
-
24.8
-
(18.4)
24.1
-
34.1
58.2
Europe
12.3
(9.4)
(27.5)
(24.6)
-
RHC Group
19.2
(12.8)
(11.3)
8.3
(22.3)
24.8
(10.0)
(56.4)
(60.5)
(7.4)
34.1
(33.8)
RHC Group
24.2
(23.8)
(34.6)
(34.2)
12.8
Group EBIT declined 21.3% on the pcp and includes the impact of COVID on activity levels and costs of elective surgery restrictions, movement
restrictions, and cancellations at short notice by doctors and patients; the higher costs associated with operating in a COVID environment
including higher staffing costs due to the impact of isolation orders and higher PPE costs; inflationary pressures in particular in the UK and
Europe; and the impact of case mix changes.
EBIT includes initial contributions from acquisitions made over the last 12 months, the most material being Elysium contributing $23.1m for the
five months of ownership.
In Australia the estimated total impact of the disruption related to COVID in FY22 was $276m and in Ramsay UK the estimated impact of the
additional costs associated with operating in a COVID environment was $56m.
Rental and short term low value lease costs declined primarily reflecting the refund of prior year rent of $8.3m in France.
Transaction, acquisition and developments costs primarily relate to the proposed scheme of arrangement for Spire Healthcare plc which was
voted down by Spire shareholders in July 2021 and the acquisition of mental healthcare provider Elysium. It also includes transaction costs
associated with the acquisition of GHP in Europe and costs incurred in relation to an approach from a consortium of financial investors headed
by KKR to acquire 100% of the shares in Ramsay by way of a scheme of arrangement.2
Net profit on disposal of assets relates to the sale of two facilities in France and the profit on the sale in the Asia Pacific region. The $19.2m
profit compares to the $24.2m profit on the sale of assets and investments in Europe and Australia booked in the pcp.
The expensing of IT and other assets relates to the internal decision to increase the threshold for capitalising assets.
The write back of indemnities and warranties relates to the indemnity raised in FY21 against the sale of the German asset portfolios which is no
longer required.
1 Refer to the Divisional Performance for further information on these agreements
2 Refer ASX announcements 20th April 2022 "Response to Media Speculation - Receipt of Non-Binding Indicative Proposal"
Annual Report 2022
19
6. Operating and Financial Review
Ramsay Health Care Limited
Inventory write-offs relate to medical supplies acquired at the peak of COVID which are in most cases past use by dates.
Refer to Divisional Performance for further detail
3 Financing Costs and Tax
Net financing costs (excl. financing costs associated with AASB16 leases) declined 29.5% on the pcp and includes the $7.4m net upfront cost of
terminating two fixed rate loan facilities totalling $200m which were due to expire in FY25. The net reduction in financing costs in future years
is estimated at $3.6m in both FY23 and FY24 and $1.2m in FY25.
Net financing costs benefited from a non cash mark to market of interest rate swaps of $34.1m used in the hedging of Ramsay Sante's debt
facilities and lower average base rates over the period.
The effective tax rate for the full year was 29.6% compared to 31% in the pcp and includes the benefit of a lower corporate tax rate in France.
The franking account balance at 30th June 2022 was $868m. Following the payment of the CARES dividend and the ordinary final dividend the
balance will be approximately $818.1m.
4 Balance sheet
A$'m
Working capital
Property plant & equip
Intangible assets
Current & deferred tax assets
Other assets/(liabilities)
Capital employed (before right of use assets)
Right of use assets
Capital employed
Capitalised Leases (AASB16)
Net Debt (excl. lease liability debt & incl. derivatives)1
Total shareholders funds (excl. minority interest)
Invested Capital
Funding Group Net debt (excl. lease liability debt and incl derivatives) A$'m
Return on Capital Employed (ROCE) (%)2
Return on invested capital (ROIC) (%)4
Funding Group Leverage (Old Lease Standard AASB 117) (x)
Consolidated Group Leverage (New Lease Standard AASB 16) (x)
30-6-2022
(337.7)
4,806.9
5,799.0
111.7
(153.9)
10,226.0
4,627.7
14,853.7
5,482.4
4,845.1
3,933.5
8,778.6
2,416.8
6.63
3.63
3.3
5.7
31-12-2021
(368.5)
4,537.1
4,320.6
177.5
(305.0)
8,361.7
4,315.8
12,677.5
5,182.0
2,985.9
3,958.3
6,944.2
840.7
8.5
5.5
1.0
4.2
30-6-2021
(794.8)
4,488.6
4,233.6
150.7
1,646.2
9,724.3
4,411.5
14,135.8
5,271.0
4,314.0
4,032.7
8,346.7
2,565.1
9.33
7.03
2.9
4.7
1 Net debt includes derivatives and excludes lease liabilities
2 ROCE - 12 month rolling EBIT / average of opening & closing capital employed
3 Proforma excluding funds in escrow for the Spire transaction
4 ROIC - defined as 12 month rolling NPAT (based on AASB16)/shareholder equity and net debt (pre AASB16 EBIT). Consistent with LTIP calculation
The key changes in the balance sheet over the 12 month period relate to the refund of the funds held on escrow for the proposed Spire
Healthcare acquisition at 30th June 2021, the acquisition of Elysium in the UK1 and the acquisition by Ramsay Santé of Swedish listed
healthcare company GHP. The Elysium acquisition valued the business on a pre-IFRS 16 enterprise value of £775m (A$1.4bn). The GHP
acquisition valued the business on an enterprise value of approximately €240m (~ A$370m).
The change in working capital is mostly as a result of an increase in the trade and other receivables balance as funding under the government
grants provided under the French Government revenue guarantee decree reduced and more usual invoicing and payment patterns with
customers resumed.
Funding group leverage reflects the significant investment in the business over the twelve month period combined with the impact of COVID on
activity levels and margins. Leverage metrics do not reflect the benefit of a full 12 month contribution from completed brownfield developments.
1 Refer ASX announcements 13th December 2021 and January 31st 2022 for further details on the transaction
20
Annual Report 2022
5 Cashflow
Year ended 30 June A$'m
EBITDA
Changes in working capital
Finance costs
Income tax paid
Movement in other items
Operating cash flow
Capital expenditure
Free cash flow
Net divestments/(acquisitions)
Interest & dividends received
Cash flow after investing activities
Dividends
Other financing cash flows
Net increase/(decrease) in cash
Interest cover (x) (EBITDA/finance charges)
6. Operating and Financial Review
Ramsay Health Care Limited
2022
1,830.2
(457.1)
(375.4)
(229.3)
(52.9)
715.5
(708.5)
7.0
734.1
4.4
745.5
(371.0)
(1,039.9)
(665.4)
4.9
2021
2,053.5
(72.7)
(367.5)
(228.2)
96.1
1,481.2
(628.9)
852.3
(1,910.2)
34.9
(1,023.0)
(125.1)
709.1
(439.0)
5.6
Chg (%)
(10.9)
(528.7)
(2.1)
(0.5)
(155.0)
(51.7)
12.7
(99.2)
138.4
(87.4)
172.9
(196.6)
(246.7)
(51.6)
-
Net acquisitions largely reflects the net movement of the return on capital held in escrow at 30th June 2021 in relation to the proposed Spire
acquisition and the funds used to acquire Elysium Healthcare in 2HFY22. These movements are also reflected in other financing cashflows.
The increase in dividends reflects the fact that there was no final dividend paid in relation to the FY20 period in FY21.
Cash capital expenditure increased 12.7% to $708.5m reflecting the growing pipeline of projects in Australia and Europe combined with 5
months of the Elysium business.
Committed Group capital expenditure was $733.4m an increase of 8.7% on the pcp split:
Capital Expenditure by Region ($'m)
1,000
500
0
733733
674674
307307
260260
356356
334334
5858
9393
Asia Pacific
UK
Europe
Total
FY21
FY22
Group Capital Expenditure by Type (%)
Group Capital Expenditure by region (%)
Routine &
Compliance – 42
Growth – 12
Digital – 8
Brownfield &
Greenfield – 38
Asia Pacific – 42
UK – 12
Europe – 46
Annual Report 2022
21
6. Operating and Financial Review
Ramsay Health Care Limited
6 Outlook
Group
• Ramsay has invested approximately $2.7 billion over the
past two financial years to expand and upgrade its facilities
and broaden its service base. This investment is underpinned
by: demographic trends driving strong demand for healthcare
services in western countries; advances in clinical practice
improving patient outcomes and extending life expectancy; the
elective surgery backlog created by the pandemic combined
with an increase in demand for some non-surgical services ; and
increased Government focus on the importance of investment
in maintaining strong, efficient healthcare systems.
• Underlying earnings growth in FY23 will benefit from
the additional capacity created over the last few years
combined with full year contributions from Elysium and
recent acquisitions in Europe. The focus will remain on
driving the synergies, realising the growth opportunities and
improving returns.
• On 20th April 2022, Ramsay announced it had received a
conditional, non-binding, indicative proposal from a consortium
of financial investors led by KKR to acquire 100% of the shares
in Ramsay by way of a scheme of arrangement at an indicative
price of A$88.00 cash per share (reduced by the value of any
dividends paid). On 26th September 2022, Ramsay announced
to the ASX that the Ramsay Board and the consortium had
mutually agreed to terminate discussions.
Over the medium term Ramsay will continue to pursue and
invest in its strategy to be a leading integrated healthcare
provider of the future:
• Growing, modernising and leveraging our World Class
Hospital Network:
– Group capital expenditure for FY23 is expected to be in the
range $0.85bn-1.0bn. Investment in greenfield and brownfield
development and growth initiatives is expected to be in the
range $515-570m
• Moving purposefully into New & Adjacent Services:
– Ramsay will continue to assess bolt on and partnership
• In the near term, the industry continues to be under pressure
opportunities in all regions;
from a high level of COVID cases in the community
combined with the highly restrictive guidelines around the
patient pathway together with the resultant impact on the
availability of the workforce, impeding a recovery in volumes
and productivity.
• The French Government has indicated that it will extend
the revenue guarantee from 1st July 2022 to 31st
December 20221, providing stability to earnings in the French
acute hospital business while the operating environment
remains unpredictable.
• Our partnership and relationships with Governments in each
of our markets have developed over the last few years. We
believe there will be meaningful opportunities for the private
sector to partner with Governments in the future. Given our
global health care capabilities and proven reliability as a private
sector operator Ramsay is uniquely qualified to be a core
healthcare partner.
• Given inflationary and COVID related pressures on costs
Ramsay will focus on negotiating improved terms with
payors to reflect this, (both health funds and governments)
leveraging the Groups global scale in procurements and
driving efficiency and productivity improvements where the
operating environment allows.
• Ramsay believes the outlook for the Group remains
strong. Our world class hospital network combined with our
outstanding people and clinicians give us confidence that the
business is well placed to take advantage of the positive
long term dynamics driving the healthcare industry. We expect
a gradual recovery through FY23 and more normalised
conditions from FY24 onwards.
• As announced to the ASX on 9th September 2022, discussions
between Ramsay, Sime Darby Berhad and IHH Healthcare
Berhad in relation to a potential sale of the Ramsay Sime
Darby Health Care Sdn Bhd joint venture have concluded. The
discussions did not result in a binding agreement for the sale of
Ramsay Sime Darby.
– Investment in digital and data initiatives to transform the
business and drive efficiencies will be accelerated to
leverage Ramsay's existing business base, support margins
and deliver an integrated healthcare experience for patients;
– Investment in meeting the increasing demand in mental
health services across our markets will continue including the
roll-out of a further 10 psychology clinics in Australia in FY23
and a number of investment and bolt on opportunities in the
Elysium business;
– Growth initiatives will include investment in diagnostics and
day surgeries in all markets.
• Extract the highest potential value through
Operational Excellence:
– Expand the Group's procurement strategy to leverage the
Company's scale to maximise benefits;
– Focus on productivity improvements to partially offset the
inefficiencies created by the COVID operating environment;
– Work with our top global supplier relationships to create
mutually beneficial partnerships.
• Reinforcing Ramsay's Strong Organisational Foundations:
– Ramsay will continue its investment in clinical research
and development to support our clinicians and improve
patient outcomes;
– There are a range of programs being rolled out across the
regions to reach Ramsay's commitment to a net zero target;
– The business has increased investment in enhanced
recruitment, training and retention programs to ensure
it has the right people to drive the business in the
complex healthcare environment and remain competitive in
the market.
For further information on the Outlook refer to Divisional
Performance for further details
1 This is yet to be confirmed by decree
22
Annual Report 2022
Divisional Performance
7 Asia Pacific
7.1 Results Summary
Australia
Year Ended 30 June A$'m
Revenue from patients and other revenue
Revenue from governments under COVID support contracts
Other income - income from the sale of development assets
Other income - net profit on disposal of non-current assets
Intersegment revenue
Total segment revenue and other income (less interest income)
EBITDAR
Rent
EBITDA
Depreciation
Amortisation and impairment
EBIT
Financing costs associated with leases (AASB16 leases)
EBIT after financing costs associated with leases
Capital Expenditure
Contribution from Asian Joint Venture
Year Ended 30 June A$'m
Share of profit from Joint Venture
Year Ended 30 June MYR'm
Revenue
EBITDA
EBIT
6. Operating and Financial Review
Ramsay Health Care Limited
2022
5,331.4
12.3
1.8
8.6
7.1
5,361.2
710.2
(11.9)
698.3
(222.4)
(23.9)
452.0
(42.2)
409.8
307.0
2022
15.3
2022
1,178.2
259.6
158.7
2021
5,429.7
11.1
20.4
-
2.9
5,464.1
855.7
(11.4)
844.3
(204.9)
(14.2)
625.2
(38.8)
586.4
260.0
2021
10.8
2021
1,077.8
240.8
133.3
Chg (%)
(1.8)
10.6
(91.2)
-
144.8
(1.9)
(17.0)
(4.4)
(17.3)
(8.5)
(68.3)
(27.7)
(8.8)
(30.1)
18.1
Chg (%)
41.7
Chg (%)
9.3
7.8
19.1
Ramsay Australia CEO Carmel Monaghan visiting Joondalup Hospital in Western Australia
Annual Report 2022
23
6. Operating and Financial Review
Ramsay Health Care Limited
7.2 Review of Results
7.2.1 Australia
Total revenue and other income declined 1.9% to $5,361.2m on the
pcp and primarily reflects the impact of COVID on activity levels
and case mix over the period with a skew to day surgery reflecting
government imposed surgical restrictions.
During the period Ramsay Australia assisted the NSW and Victorian
state governments with both staff and facilities under the private
hospital funding agreements put in place at the start of the COVID
pandemic. These agreements allow for activity based payments
(includes for example public patient admissions, staff deployment
to public hospitals, residential aged care facilities and vaccination
centres and reserved beds) and viability payments being net
recoverable costs less any revenue generated from operations
(including all public activity based funding calculated on an accruals
basis) to be claimed in return for maintaining workforce capacity
at facilities required to assist with the COVID pandemic. Viability
revenue in respect of recouping net recoverable costs under these
contracts for the 12 month period was $12.3m.1
Revenue from patients includes activity based payments for work
done for NSW and Victorian governments charged on a cost
recovery principle. This contributed approximately one third of the
$130.5m of public patient revenue earned in these states during
the period.
Revenue from Pharmacy services increased 3.3% to $478.9m, the
business was impacted by reduced activity due to COVID.
Over the first nine months of FY22 the business was materially
impacted by lock-downs and isolation orders driven by an increase
in COVID cases, combined with state government mandated surgical
restrictions intended to limit private hospital activity in order to free
up capacity for the potential overflow of urgent surgical and non
surgical cases from public hospital facilities.2
Over the final three months of FY22, the business was impacted
by the disruption caused by high COVID case numbers in the
community and the flow on effect to activity levels due to the
reduced availability of staff, a high level of cancellations at short
notice due to COVID impacted clinicians and patients, combined
with higher staffing costs due to staff shortages and increased
agency costs.
Total admissions declined 2.3% on the pcp (increased 1.4% on FY19)
with day patient admissions declining 0.7% on the pcp (up 5% on
FY19) and inpatient admissions declining 5.4% on the pcp (down
5.4% on FY19). Key drivers of the mix included:
• Surgical admissions per work day declined 4.5% on the pcp
(increased 1.8% vs FY19), driven by a 8.4% decline in overnight and
a 2.5% decline in day surgery. NSW and Western Australia were
the most severely impacted States given the extensive surgical
restrictions over the 12 month period and the relative size of
those States in the portfolio. The improved performance of Victoria
during the period relative to the pcp reflects the more severe
impact of restrictions in the pcp
• Non-Surgical admissions per work day increased 0.6% on the pcp
(increased 0.1% compared to FY19) driven by:
– Medical admissions increased 2.5% (up 5.4% vs FY19), driven by
overnight down 1.8% and same day increased 4.8%
– Psych admissions declined 10.2% (down 15.7% vs FY19), driven
by overnight down 5.4% and same day declining 11.6% reflecting
the ongoing reluctance of both doctors and patients to visit
hospital environments
– Rehab admissions increased 1.2% (down 3.5% vs FY19), driven
by overnight down 5.7% and same day increasing 2.7%
– Maternity admissions increased 5.8% (down 0.1% vs FY19)
EBITDAR declined 17% reflecting: a change in case mix; higher
personnel costs due to the impact of surgical restrictions and viability
agreement requirements, as well as the impact of isolation orders;
high absenteeism rates caused by COVID in the community; and
higher supply costs including PPE. The estimated impact of the
disruption related to COVID in FY22 was $276m ($264m net of
viability payments).
During the period, due to a change in accounting policy, the business
expensed $12.6m of low value IT and other assets previously
capitalised on the balance sheet. The result includes profit on the
sale of assets of $8.6m ($11.9m in the pcp), transaction/acquisition
and development costs of $11.8m ($5.7m in the pcp), an inventory
write-off associated with product acquired at the height of the
pandemic of $4.3m and a provision for non recurring employee costs
of $10m.
EBIT declined 27.7% compared to the pcp and includes a 8.5%
increase in depreciation reflecting the brownfield projects that
completed in FY21 and FY22. Amortisation and impairment charges
includes a $10.1m impairment of assets ($7.1m in the pcp).
7.2.2 Ramsay Sime Darby
The Ramsay Sime Darby joint venture reported a 9.3% increase in
revenue over the pcp over the 12 month period, driven primarily
by the inclusion of a full year of the Bukit Tinggi Medical Centre in
Malaysia, which was acquired in May 2021 and the contribution from
COVID related activities including testing and vaccination.
EBIT for the period increased 19.1% over the pcp, reflecting the
expanded asset base and the contribution from the provision of
COVID-related services in both Malaysia and Indonesia. The day
surgery in Hong Kong was closed on 30th June 2022 given the
facility was making losses. The sale of the nursing college in Malaysia
was also completed during the year.
The equity accounted contribution from the joint venture, included
in the Asia Pacific earnings, for the 12 month period increased 41.7%
compared to the pcp to $15.3m.
7.3 Capital Expenditure
Total capital expenditure in Australia in FY22 was $307.0m with that
split $181m in brownfield and greenfield investment, $32m in other
growth projects, $6m in digital and IT projects and $88m in routine
and compliance.
Brownfield projects completed in FY22 with a net investment of
$232.5m delivered 240 net beds, 9 theatres, 18 suites and three
new procedure rooms. This included the completion of the new
Hollywood Emergency Department, including 90 additional beds, a
surgical expansion at Greenslopes including 3 operating theatres
and 3 procedure rooms as well as additional shell space for future
expansion, the completion of the Stage 3 development at Westmead
which included 13 new suites, 21 net new beds and 2 theatres, and
the redevelopment of Beleura hospital in Victoria encompassing new
consulting suites, an outpatient rehab gym and 46 net new beds.
In addition to the above-mentioned capital expenditure, $7m of
operating expenditure was incurred in relation to digital and data
projects in FY22. Note the majority of the investment in Australia's
digital and data roadmap going forward is expected to be treated as
operating expenses rather than capital expenditure as the projects
are utilising largely cloud based solutions.
1 Refer FY22 results presentation for an update on the status and terms of agreements with each of the states of Australia
2 Restrictions in Western Australia impacted the last week of March and April. Refer to ASX announcements made August - November for details of state government restrictions
24
Annual Report 2022
6. Operating and Financial Review
Ramsay Health Care Limited
7.4 Outlook
In the medium term, Ramsay Australia will focus on:
• Investing in its extensive hospital network to ensure that its facilities meet the future demand for healthcare services
• Investing in new and adjacent services including its day surgery strategy, psychology clinics and out of hospital community
care services
• Focusing on operational excellence including an expanded procurement strategy to leverage our global scale to offset rising costs and
lagging indexation
• Investing in its operational foundations including its 5 year digital and data strategy and sustainability initiatives including reducing
carbon emissions and single use plastics
• Implementing a series of workforce initiatives to ensure the business stays highly competitive, mitigates the risks in the current tight
labour market and differentiates itself as a service provider in the future
FY23 Outlook
FY23 activity levels and operational efficiency will continue to be impacted while COVID cases remain high in the community. The
estimated impact in July 2022 of operating in a COVID environment, including high levels of staff absenteeism and the inefficiencies
created by short notice cancellations by doctors and patients was $38.7m.
Underlying organic growth in activity is expected to be driven by:
• The backlog in surgical activity and to a certain extent non-surgical activity such as delayed cancer treatment;
• Investment in new capacity and services opened over the last two years; and
• New clinician recruitment programs.
The business will continue to invest to drive growth in the future including:
• Total capital expenditure in FY23 is expected to be in the range $380-460m;
• Investment in brownfield and greenfield projects in FY23 is forecast to be in the range $250m - 300m. Projects expected to be
delivered in FY23 include an expansion project at Wollongong hospital, the conversion of the Lawrence Hargrave facility to a specialist
women's mental health inpatient facility, the expansion of Tamara hospital including a 4th operating theatre, a day surgery unit and day
group therapy rooms and the first stage of an expansion at Peninsula hospital;
• The pipeline of investment in brownfield and greenfield hospitals remains strong. Spend in FY24 - FY25 is expected to be in the range
$250-400m per annum. Larger projects expected to be delivered in that time period include Stages 1 and 2 of the new Epping hospital
which will include 126 beds, 6 operating theatres and 1 Cath lab and the expansion of Warringal in Melbourne encompassing building an
emergency department, three operating theatres, 26 consulting suits and delivering net 131 new beds;
• Investment in its digital and data roadmap in FY23 is expected to be approximately $30-35m inclusive of cyber security with the
majority booked as operating expenses;
• The business is also focused on our out of hospital strategy with the rebranding of existing sites and the development of select stand
alone day hospitals under the Ramsay Surgical Centre brand and our mental health clinics under Ramsay Psychology; and
• The business is investing to expand its nursing pool and has recently increased the intake of its graduate nurse training program, with a
recent second intake this year, to start to address the shortage of trained nurses over the medium term.
Labour costs are expected to remain elevated in FY23 driven by higher absenteeism rates while COVID is in the community, inflationary
pressures on wage rates given the shortage of workers in the sector and statutory superannuation rate rises and payroll tax increases.
Inflationary pressures on other costs will also place pressure on margins. PPE costs are likely to remain higher than pre COVID levels in
FY23 reflectingm the higher cost and usage of products.
Given higher operating costs the business is focused on achieving improved commercial terms with payors, leveraging our global
procurement advantage & driving efficiency and productivity programs.
The Australian business will increase investment in staff training and development as well as recruitment and retention strategies to meet
short term workforce challenges
Group head office costs are expected to increase in FY23 driven by increases in costs including investment in workforce recruitment and
retention programs and digital and data programs.
As announced to the ASX on 9th September 2022, discussions between Ramsay, Sime Darby Berhad and IHH Healthcare Berhad in
relation to a potential sale of the Ramsay Sime Darby Health Care Sdn Bhd joint venture have concluded. The discussions did not result in
a binding agreement for the sale of Ramsay Sime Darby.
Annual Report 2022
25
6. Operating and Financial Review
Ramsay Health Care Limited
8 United Kingdom
8.1 Results Summary
Year Ended 30 June A$'m
Ramsay UK
Revenue from patients and other revenue
Revenue from governments under COVID support contracts
Total revenue and other income
EBITDAR
Rent
EBITDA
Depreciation
Amortisation and impairment
EBIT
Financing costs associated leases (AASB16 Leases)
EBIT less financing costs associated with leases
Capital Expenditure
Elysium - Mental Healthcare1
Revenue from patients and other revenue
Revenue from governments under COVID support contracts
Total revenue and other income
EBITDAR
Rent
EBITDA
Depreciation
Amortisation and impairment
EBIT
Financing costs associated leases (AASB16 Leases)
EBIT less financing costs associated with leases
Capital Expenditure
UK Segment
Total segment revenue and other income
Total EBITDAR - UK
Total EBITDA
Total EBIT
Total Capital Expenditure - UK
1 Elysium earnings reflect 5 months of ownership to 30th June 2022
Result in Local Currency
Year Ended 30 June £'m
Total Revenue and other income
EBITDAR
EBITDA
EBIT
1
Includes contribution from Elysium for the five months to 30th June 2022
26
Annual Report 2022
2022
2021
Chg (%)
911.1
126.1
1,037.2
46.8
(1.4)
45.4
(92.8)
(1.8)
(49.2)
(82.6)
(131.8)
71.8
284.3
-
284.3
35.2
(0.5)
34.7
(11.7)
-
23.1
(5.0)
18.1
20.8
1,321.5
82.0
80.1
(26.1)
92.6
20221
725.1
48.5
44.3
(15.3)
606.5
417.6
1,024.1
182.4
(1.2)
181.2
(88.4)
-
92.8
(81.8)
11.0
58.0
-
-
-
-
-
-
-
-
-
-
-
-
1,024.1
182.4
181.2
92.8
58.0
2021
567.7
101.1
100.5
51.4
50.2
(69.8)
1.3
(74.3)
(16.7)
(74.9)
(5.0)
-
(153.0)
(1.0)
(1,298.2)
23.8
-
-
-
-
-
-
-
-
-
-
-
-
29.0
(55.0)
(55.8)
(128.1)
59.7
Chg (%)
27.7
(52.0)
(55.9)
(129.8)
6. Operating and Financial Review
Ramsay Health Care Limited
The business benefited from the opening of Buckshaw day surgery
hospital in Chorley on 21st October 2021, the third new facility
opened by the business during the pandemic.
ELYSIUM HEALTHCARE
The Elysium acquisition was completed on 31st January 2022.
Revenue for the five month period of ownership was $284.3m, driven
by a 2.4% increase in occupied beds to 1,867, a 4.6% increase in
the average daily fee (partly reflecting a change in mix) and a $3.6m
increase in specialing revenue.
Revenue for the 12 month period to 30th June was ₤375m
(A$688.5m) an increase of 7.5% on the pcp and EBIT was ₤32.2m
(A$58.9m) slightly down on the pcp largely as a result of labour and
inflationary pressures.
The business has been impacted by significant inflationary pressures
in particular around staffing costs. Shortages of clinical and support
staff and a generally tight labour market have forced the business
to use higher levels of agency staff. In addition, other costs (in
particularly energy costs) have increased at rates in excess of the
inflation rate. Other key expenses impacted include insurance and
food costs.
Despite the difficult conditions, the business is performing in-line
with expectations at the time of acquisition and is expected to
deliver annual synergies of at least £5m p.a. across procurement,
leveraging systems and network scale with an opportunity for further
growth synergies. As part of the integration program, the three
existing Ramsay neuro facilities have been placed under Elysium
management from 1st July 2022.
8.3 Capital Expenditure
Capital expenditure invested in the UK acute hospital business over
the twelve month period was £39.2m (A$71.8m) of which £26.3m
(A$48.2m) was invested in brownfield developments, digital and
growth projects. Projects completed during the period included
Buckshaw day surgery hospital in Chorley opened in October
2021 and the electronic patient record deployment to all hospitals
completed in November 2021.
Capital expenditure in Elysium for the 5 month period to 30th
June was ₤11.6m (A$20.8m) inclusive of new site acquisitions
and development.
Ramsay UK CEO Nick Costa (far right) visting Oaklands Hospital
8.2 Review of Results
RAMSAY UK
Total revenue and other income for the 12 month period increased
1.3% reflecting the more significant impact of the pandemic on
activity levels in the prior period and an increase in private patients
as the backlog of elective surgery created by the pandemic starts to
be addressed.
While activity levels were impacted by COVID, inpatient admissions
over the twelve month period increased 16.9% on the pcp and
day patient admissions increased 4.2% on the pcp highlighting
the more severe impact of the pandemic in the pcp and the
contribution from recently completed facilities. Demand from private
patients continued to grow as a percentage of total admissions
over the period, within this self pay admissions was the fastest
growing segment albeit from a low base, and the business has been
successful in gaining insured contracts. The business also treated
over one million outpatients during the 12 month period.
Due to the NHS's concerns about the rapid spread of the Omicron
variant and its ability to manage resulting hospitalisations, Ramsay
entered into a volume based agreement with NHS England in
January 2022 which made its services available to the NHSE and
its patients to meet the ongoing demands resulting from the COVID
pandemic. The agreement came into effect on 10th January 2022
and expired on 31st March 2022. During this period Ramsay was
able to continue to provide private patient activity. Revenue earned
under that agreement is reflected in "Revenue from governments
under COVID support contracts" of $126.1m. During FY21 Ramsay
UK operated under cost recovery agreements with the NHSE put in
place to make Ramsay's services available to the public sector when
required to meet the demands of the COVID pandemic for the nine
months to 31st March 2021.
During FY22 Ramsay UK was impacted by challenges stemming from
COVID circulating in the community. These included isolation orders
impacting the availability of patients, doctors and staff at short notice
resulting in material procedure cancellations and significantly higher
personnel costs. There were over 30,000 episodes of care cancelled
at short notice in the twelve-month period creating additional cost
and complexity. The business was also disrupted by movement
restrictions introduced by the UK Government later in 2QFY22, in
response to the rapid spread of the Omicron variant.
The business continued to incur higher costs associated with
operating in a COVID environment including testing patients,
doctors and staff, the disruption to efficient scheduling due to last
minute cancellations together with higher PPE costs. Additional
costs associated with the COVID environment during the year are
estimated at £30.6m (A$56m) over the year. Some of these costs
such as testing patients fell away during the course of the year
however some of these additional costs are expected to remain
in the business in FY23. Significant inflationary pressures of 5%+
impacted operating expenses over the year with labour and energy
costs being the most severely impacted. Operating expenses include
₤4.2m (A$7.3m) of software as a service costs now expensed.
Included in the result are non recurring items: ₤10.1m (A$18.0m)
write down of inventory acquired during the height of the pandemic;
and net transaction costs of ₤16m (A$26.2m) associated with the
proposed scheme of arrangement for Spire Healthcare plc, which
was voted down by Spire shareholders in July 20213 and the
acquisition of mental healthcare provider Elysium.4
3 ASX announcement 19 July 2021 "Results of Scheme Meeting"
4 ASX announcement 1st February 2022 "Completion of the acquisition of UK based mental healthcare provider Elysium Healthcare"
Annual Report 2022
27
6. Operating and Financial Review
Ramsay Health Care Limited
8.4 Outlook
RAMSAY UK
In the medium term Ramsay UK will be focused on:
• Ensuring that it remains well placed to assist the NHS with its Elective Recovery plan;
• Investing in its digital front door interface, with all key payors, including the NHS, wanting increased digital capability driving ease
of access;
• Optimise the electronic patient record platform rolled out in FY22 to drive productivity and efficiencies;
• Investment in select brownfield, greenfield and diagnostic opportunities to drive growth and improve margins; and
• Continue to invest in its digital and data strategy focused on areas including clinical integration and AI capabilities, partnerships with
referrers and direct booking technology
Subject to the ongoing impact of COVID cases the business is expected to benefit from its strong partnership with the NHS combined with
private patient growth, to drive an increase in activity levels in FY23:
• Demand for elective care in the UK is strong and the NHS waiting lists are the highest, circa 6m, since records began in 2007. The
NHS’s Elective Recovery Plan looks to deliver 30% more elective and diagnostic activity by 2024/25 with reliance on the independent
sector. Activity levels will be subject to the NHS's rate of investment and mobilisation of its recovery plan;
• The business has an active marketing campaign directed at the self pay market, ‘We Care’, based on reassurance messaging around
clinical safety all underpinned by the Ramsay ‘People Caring for People’ culture. The business is also developing initiatives with insurers
to facilitate direct bookings simplifying the pathway for private pay consumers.
The business will also benefit from the three greenfield developments completed over the last eighteen months including Buckshaw
hospital opened in October 2021 and a new two theatre day surgery facility expected to be commissioned in 2HFY23 at Kettering.
The costs of operating in the COVID environment including higher agency costs combined with significant inflationary pressures in the UK
and critical staff shortages in some areas will impact a return to pre COVID margins in FY23. To offset some of these costs the business is
focused on a number of efficiency programs combined with benefiting from a wider procurement program across the Group.
In FY23 the business will continue to invest in its digital foundations with a further ₤6m (A$11m) of SaaS operating expenses (₤5m in FY22).
Capital expenditure in FY23 is expected to be in the range £36m-£53m (A$66m-A$97m). Brownfield and greenfield spend for the year
is expected to be approximately ₤13m (A$24m) with projects including the expansion of the New Hall hospital in Salisbury to include a
new operating theatre and a new two theatre day surgery facility expected to be commissioned in 2HFY23 at Kettering. A further ₤7.5m
(A$14m) is expected to be invested in diagnostic projects over the year.
ELYSIUM HEALTHCARE
In the medium term Elysium will be focused on:
• Capacity optimisation of existing facilities;
• Capacity expansions through greenfield and brownfield investment and expansion into the nurse led care homes;
• Building its relationship with the NHS to build opportunities in complex care and and mental health;
• Driving operational leverage through investment in digital solutions; and
• Investment in workforce strategies to support growth in capacity.
The UK FY23 result will benefit from a full year contribution from Elysium (5 months in FY22). Growth in activity will be driven by an
increase in average paid beds over the 12 month period driven by brownfield developments and higher average occupancy levels.
Given the lag in indexation rate, Elysium's earnings will be impacted by further significant cost inflation on top of the inflationary price
increases seen in FY22 in the UK market.
In FY23 Elysium expects to invest ₤59m (A$108.1m ) in capital expenditure including ₤45m (A$82.5m) on site acquisitions and
developments on a range of projects including April Cottage a new CAMHS facility in Surrey, that will deliver 12 new beds when it
opens in July 2023 and Cefn Carnau2 an extension of an existing mental health facility in Wales that will deliver an additional 20 new beds
when it opens in October 2023. Investment will include a number of small 6 bed nurse led care homes as well as extensions of a number
of existing facilities.
Together with Ramsay UK the business will be focused on realising the annual synergies of at least ₤5m (~A$9m) identified at the time of
acquisition including across procurement, leveraging systems and network scale. The 3 original Ramsay neuro rehab facilities have been
transferred to Elysium management from 1st July 2022.
28
Annual Report 2022
9 Ramsay Santé
9.1 Results Summary
Year Ended 30 June A$'m
France
Revenue from patients and other revenue
Other income - net profit on disposal of non-current assets
Income from government grants
Total segment revenue and other income
EBITDAR
Rent
EBITDA
Depreciation
Amortisation & impairment
EBIT
Financing costs associated with leases (AASB16 Leases)
EBIT less financing costs associated with leases
Nordics
Revenue from patients and other revenue
Income from government grants
Other income - net profit on disposal of non-current assets
Total segment revenue and other income
EBITDAR
Rent
EBITDA
Depreciation
Amortisation & impairment
EBIT
Financing costs associated with leases (AASB16 Leases)
EBIT less financing costs associated with leases
Total segment revenue and other income - Europe
Total EBITDAR - Europe
Total EBITDA - Europe
Total EBIT - Europe
Total Capital Expenditure - Europe
Ramsay Santé – Result in local currency
Year Ended 30 June €'m
Total Revenue and other income
EBITDAR
EBITDA
EBIT
PBT
NPAT
Minority Interest
NPAT after minority interests
6. Operating and Financial Review
Ramsay Health Care Limited
2022
2021
Chg (%)
4,646.3
13.7
357.1
5,017.1
927.4
(101.0)
826.4
(421.5)
(26.7)
378.2
(101.0)
277.2
2,000.9
44.9
1.5
2,047.3
232.7
(22.6)
210.1
(133.4)
(4.7)
72.0
(11.4)
60.6
7,064.4
1,160.1
1,036.5
450.2
333.8
2022
4,555.5
748.6
669.3
291.7
186.1
130.5
(66.8)
63.7
4,574.9
10.3
336.4
4,921.6
947.4
(117.5)
829.9
(465.7)
(7.0)
357.2
(103.5)
253.7
1,824.4
91.9
2.0
1,918.3
206.9
(19.6)
187.3
(112.0)
(28.7)
46.6
(10.1)
36.5
6,839.9
1,154.3
1,017.2
403.8
356.2
2021
4,282.5
722.7
636.9
252.8
105.0
67.1
(36.4)
30.7
1.6
33.0
6.2
1.9
(2.1)
14.0
(0.4)
9.5
(281.4)
5.9
2.4
9.3
9.7
(51.1)
(25.0)
6.7
12.5
(15.3)
12.2
(19.1)
83.6
54.5
(12.8)
66.0
3.3
0.5
1.9
11.5
(6.3)
Chg (%)
6.4
3.6
5.1
15.4
77.2
94.5
83.5
107.5
Annual Report 2022
29
6. Operating and Financial Review
Ramsay Health Care Limited
9.2 Review of Results
Ramsay Santé continued its commitment to take care of COVID
patients in Europe with more than 10,000 COVID cases treated in
France, over the period, with approximately 4,500 of those in critical
care, and 2,000 in Sweden. The business has continued to support
governments to manage the pandemic through both COVID testing
and vaccination efforts.
The business reported growth in activity levels over the 12 month
period heavily weighted to day procedures and out of hospital
activity in its primary and speciality care businesses in the Nordics
region. Total European revenue and other income increased 3.3%
on the pcp. Excluding the non recurring items in this period (profit
on asset sales of $10.6m) and the prior period (profit on asset
sales of $12.3m and revenue earned by the German hospitals pre
sale $55.6m), revenue growth was 3.9% on the pcp. Reflecting the
strength of the Australian dollar against the euro, in local currency
terms "Total revenue and other income" increased 6.4% .
Group EBIT and EBITDA margins were negatively impacted by
the additional costs associated with managing the pandemic in
all countries, in particular France and the significant inflationary
pressures across the costs base, including the increased use of
agency staff to manage higher absenteeism level. Costs have been
mitigated to an extent by the subsidies received both in France and
the Nordics countries related to the COVID pandemic.
Ramsay Santé's profit before tax increased 68.1% to A$285.3m on
the pcp the increase including a 29.5% decline in net interest paid
primarily reflecting the benefit of a non cash swap mark to market
of A$34.1m compared to a negative mark to market contribution in
the pcp of A$11.1m. Adjusting for this item and non recurring items
included in both years, profit before tax increased 17.0% reflecting
the skew of the Nordics business to out of hospital and primary
healthcare services that were not as impacted by COVID, combined
with recent acquisitions in the region, offsetting the difficult trading
conditions in the French acute hospitals business.
The business has continued to invest in its digital and data strategy
integrating recent acquisitions into its CRM database and digital front
door platform. The business has also established partnerships with
a number of digital start ups in key therapeutic areas as Resilience
and NewCard.
Ramsay Santé did not pay a dividend in FY22 or in the pcp.
FRANCE
Ramsay Santé's hospitals in France continued to operate under the
French Government's revenue guarantee arrangements which were
extended for the full 12 month period. The guarantee compensates
the business for the use of its facilities and services when required
during the pandemic. The decree provided a guarantee of revenue
equal to the 2020 billed revenue, inclusive of the 2020 revenue
guarantee. If the actual billings over the period were below the
guaranteed revenue, then Ramsay Santé is entitled to the shortfall.
The guarantee is assessed on a facility by facility basis and is
calculated based on activity for the entire period covered by the
decree. The structure of the arrangements in FY22 were similar to
prior periods however the decree covering 1st January-30th June
2022 excluded mental health services now reimbursed under a
bundled payment structure.
Funds under the scheme are recognised under "Income from
government grants" . Total payments in France over the period
were A$357.1m (€230.3m) and included the revenue guarantee
combined with cost compensation associated with operating in a
COVID environment and funding to cover the increase in nurses
salaries committed to by the French Government in 2020.
France continued to be impacted by further waves of COVID
infections over the 12 month period. The business was impacted by
staff shortages both temporary as a result of issues stemming from
COVID and structural issues associated with industry wide shortages
labour shortages in particular nursing and clinical staff. Staffing issues
have eased from the peak of the pandemic however they remain a
major concern and the business has invested significantly in salary
and other incentives measures such as child care to attract and
retain staff.
Hospitalisations peaked with the Omicron wave in December/
January however higher vaccination rates and the lower severity
of the Omicron variant has meant that COVID hospitalisations were
lower than the peaks in other waves. Increasing cases associated
with new variants of the Omicron strain of COVID were starting to
impact the business at the end of June.
Underlying organic growth in revenue was 4.8% (ex foreign exchange
movements) compared to the pcp. MSO (medical, surgical &
obstetrics) admissions increased 14% on the pcp (excluding the
German portfolio of hospitals sold in FY21) with the mix heavily
skewed to day patients, increasing 3% on the pcp and inpatients
declining 4.1%. Total FCR (follow up and rehab care) admissions
increased 23.8% with the increase also skewed to day patients with
inpatients declining 1.1% while day patients increasing 27.6%. Mental
health admissions increased 11.4%.
Adjusting for non recurring items, including an $8.3m refund of prior
year overpaid rent and a net profit on the sale of assets of $13.7m
compared to $10.3m in the pcp EBIT declined 3.4% on the pcp.
NORDICS
In the Nordics "Revenue from patients and other revenue" increased
9.7%. Excluding the German business sold in 2QFY21 (revenue of
$55.6m in the pcp) revenue increased by 13.1%. The growth was
driven by underlying organic growth of 7.4% and the benefit of recent
acquisitions (€66m (~A$98m) of additional revenue net of the impact
of the divestment of Germany)
The Nordics region received government support of A$44.9m
represented in "Income from government grants". Support included
revenue support for the use of facilities and compensation for costs
incurred in relation to COVID. Overall, the impact of COVID was less
than it was in the pcp as reflected in the 51.1% decline in government
support payments.
Organic growth was mainly driven by MSO (medical surgical
and obstetrics) activity, admissions that increased 14% (inpatient
admission and excluding Germany) compared to pcp, and were
positively impacted by new care contracts and additional revenues
from COVID vaccinations. Inpatient surgical volumes remain lower
than expected compared to the ramp up in day patients which
increased 11.4% on the pcp. The business skew to primary and
speciality care resulted in a lower exposure to elective surgery
restrictions introduced during COVID peaks. The business assisted
governments in the region through active involvement in vaccination
programs which also supported revenue over the period. Outpatient
visits including digital visits increased 16% over the pcp reflecting
solid organic growth combined with effects from recent acquisitions.
Consistent with it's strategy to enter adjacent healthcare services
markets, Ramsay Santé made a number of acquisitions in the
Nordics region the most significant being the acquisition of Swedish
speciality health care provider GHP for an enterprise value of
approximately €240m, representing a 2021 EBITDA multiple of
approximately 12x. The acquisition closed at the beginning of
May and is expected to be EPS accretive in FY23 and deliver
an estimated €6m in synergies p.a in year three. For the two
months of ownership GHP contributed revenue of approximately
€29.3m (A$45.4m) and EBIT of €2m (A$2.8m). If the business had
30
Annual Report 2022
been owned for the full twelve months it would have contributed
A$272.4m in revenue and A$16.1m EBIT.
Other businesses acquired over the period included an
ophthalmology business in Sweden, a public primary care business
in Denmark, a home care offering in Sweden and an IVF business
in Norway.
The Nordics business incurred acquisition, integration and
development costs of $16.0m ($9.4m in pcp). The result benefited
from the A$24.8m release of a provision for indemnities and
warranties taken against the sale of the two German portfolios
in FY21. Excluding the impact of non recurring items EBIT grew
~14% on the pcp reflecting the benefit of organic growth and
recent acquisitions.
6. Operating and Financial Review
Ramsay Health Care Limited
9.3 Capital Expenditure
Total capital expenditure for the period was €217m (A$333.8m). Of
this amount €64m (A$98.5) was spent on greenfield and brownfield
developments and growth projects and €24m (A$36.9m) was spent
on digital and data. Capital expenditure on some projects was
slowed during the course of the year given the uncertainties in
the operating environment. Major projects invested in during the
year included:
• Significant investment in the expansion of its imaging
assets portfolio;
• Further investment in digital tools, including the launch of the new
version of the Ramsay Santé portal;
• Some key restructuring projects to better answer to patients’
care needs in regions including the extension of Ange Gardien
mental health clinic in the East of Paris and the restructuring and
modernization of Vert Galant MSO clinic in the North of Paris;
• The first 5 primary care centers of the group in France; and
• Investment in 2 additional surgical robots in France to reach 15
robots in total including 1 in Sweden and other state-of-the-art
medical equipment such as interventional rooms for cardiology
and vascular surgery and lasers for urology.
Ramsay Santé CEO, Pascal Roché visiting St Göran hospital in Stockholm
9.4 Outlook
In the medium term Ramsay Santé will focus on:
• Supporting governments in its region to address the
COVID pandemic;
• Continuing to pursue the strategy of moving further along the
patient pathway through investment in adjacent services;
• Continuing to optimise its hospital and clinic network in France
through brownfield investment;
• Extracting the synergies from recent acquisitions in the Nordics
and selectively seeking further bolt on acquisitions to optimise
its primary care and speciality healthcare platforms;
• Develop and support new policies to attract and retain
its people;
• Improve the efficiency of its back office support systems; and
• Invest in its digital platform to support and grow demand for
its services.
FY23 Outlook
In FY23 the Nordics business will benefit from a range of factors
including: a full year contribution from recent acquisitions, in
particular speciality healthcare provider GHP; organic volume
growth driven by new contracts; and expanded patient lists. The
acute hospital activities are expected to increase if COVID cases
in the community can be contained and inefficiencies associated
with the COVID environment are overcome.
The focus of the Nordics business will be on integrating the
acquisitions made by the business over the last eighteen month
both physically and digitally to leverage the speciality care
platform that has been created. This will include significant
investment in its digital strategy.
In FY23 the ramp up in activity levels in France will depend on the
severity and spread of COVID cases in further waves of the virus
and the level of hospitalisations. The French hospital business
expects the increase in day cases as a proportion of overall
admissions will be a permanent mix change as the operating
environment normalises. Improvements in FCR occupancy rates
are expected to take some time to ramp up to pre-COVID levels
and will follow elective surgery trends.
Ramsay Santé's capital expenditure in FY23 is expected to be in
the range A$300-350m. This will include approximately A$130m
invested in brownfield, greenfield, digital and growth projects.
In response to the rapid rise in cases of the new strains of
the Omicron variant of COVID since late June 2022, the French
Government has indicated that it will extend the principle of a
revenue guarantee from 1st July 2022 to 31st December 2022,
however this is yet to be confirmed by decree.
The ability to attract staff and clinicians to meet increasing demand
levels will be critical to the FY23 outlook and remains difficult due
to general staff shortages. Ramsay Santé has launched a suite of
new policies designed to attract and retain people. Attracting and
retaining people will continue to be a major focus of the business
and will require additional investment in the workforce.
Ramsay Santé will be impacted by inflationary pressures on
medical and general supplies, labour, contracted services and
energy. The business is focused on a range of efficiency initiatives
to offset the increase in costs given the expected lag in indexation.
Annual Report 2022
31
7.
Ramsay Cares
Ramsay believes a great company is one
that makes the world a better place. We are
committed to making a meaningful, positive
difference in the world. Our action is guided
by the Ramsay Cares sustainability strategy,
which focuses on advancing three important
pillars: healthier people, stronger communities
and a thriving planet.
Ramsay sites in Australia, including Hillcrest Rockhampton Private Hospital,
feature more than 2,660kw of solar panel systems.
Net Zero by 2040
This year, Ramsay was proud to announce a group-wide commitment
to achieving net zero greenhouse gas emissions by 2040.
Our science-based targets reflect the commitments of the countries
in which we operate and support the United Nations Sustainable
Development Goals. We will commence a validation process for
these targets with the Science Based Targets initiative.
What does it mean?
Ramsay’s road to net zero is part of our long-term Ramsay Cares
sustainability strategy, which was developed in consultation with our
people and partners.
A key pillar of that strategy is Caring for our Planet. We know
that a healthy planet is essential for healthy communities; being
environmentally sustainable is also key to the resilience and success
of our business.
To achieve net zero emissions by 2040, we are proactively changing
many facets of how we operate, the resources we use and our
supplier relationships.
Our net zero strategies include:
• switching to renewable energy sources
• maximising energy efficiency
• cutting waste and boosting recycling
• reducing anaesthetic gas emissions
• embedding sustainable design in new facilities and upgrades
• engaging with suppliers to reduce supply chain emissions.
Each business in the Ramsay Health Care group is
responsible for implementing the strategy and improving our
sustainability performance.
The Group Sustainability Officer and Global Sustainability Committee
provide support and guidance to the Global Executive and Global
Risk Management Comittee on our approach and progress towards
our goals.
Why is it important?
Being sustainable is a priority for our people, patients, doctors and
business success. Being sustainable allows us to build a resilient
business that adapts to climate-related risks and takes advantage of
opportunities from the transition to a low carbon economy.
By working together for healthier people, stronger communities and
a thriving planet, Ramsay aims to make a positive and meaningful
difference for current and future generations.
Find out more at ramsayhealth.com/ramsaycares
32
Annual Report 2022
7. Ramsay Cares
Ramsay Health Care Limited
This year, 94 per cent of Ramsay
Santé facilities completed Corporate Social
Responsibility (CSR) self assessments to
better understand environmental, social and
governance performance and opportunities
across the business.
Our sites globally are moving to energy
efficient lighting, heating and cooling. As
well as being an important environmental
investment, the upgrades help offset
Ramsay’s electricity costs.
Greener theatres
Anaesthetic gases have a large carbon
footprint, which is why numerous Ramsay
operating theatres are moving to more
environmentally-friendly options.
They include using low flow techniques and
reducing or removing desflurane, which has
a high global warming potential.
The Aguilera, Belharra, Jean le Bon Clinics and the
Basque Country Cardiology Centre joined forces
to promote alternative modes of transport for
their people.
Ramsay Cares teams are promoting sustainable
practices across our UK sites.
Operating room nurse Mathilde Roy Azcorra in
the Green Zone at Médipôle Hôpital Privé, where
recyclable materials are sorted.
Anaesthesia nurse Nhlanhla Siyakatshana with a
desflurane vaporiser at The Avenue Hospital.
Reduce, reuse, recycle
Healthcare consumes an enormous amount
of plastic products such as bottles and
cutlery, intravenous bags and bin liners.
Over the past year, Ramsay hospitals and
services have made a concerted effort to
reduce single-use plastic items and recycle
plastic consumables, where possible.
Driven by our people and doctors, the
campaign to cut waste has been supported
by new purchasing practices and new
monitoring and reporting processes.
The result is a notable reduction in plastic
waste going to landfill. For example, Ramsay
Australia has avoided or replaced 38 million
single-use plastic items, continued recycling
thousands of PVC intravenous bags and all
sites have committed to removing plastic
water bottles.
Catering manager Peter Trusler with a food
waste recycling system converting leftover food
and compostable packaging into biofuel for
electricity generation.
Ramsay Sime Darby Health Care CEO Peter Hong
(centre) with some of hundreds of refurbished
computers that have been donated to local
children’s charities and schools.
Annual Report 2022
33
Ramsay recognises that a
healthy planet is crucial to a
healthy population.
Ramsay is serious about being a responsible
and sustainable business. Thanks to
our dedicated teams, Ramsay has made
impressive strides towards reducing our
environmental impact.
From investing in large-scale renewable
energy systems to activating our local green
teams, the Ramsay Cares sustainabilty
strategy is coming to life across our
global businesses.
Responding to a changing climate
We are committed to reducing the impacts
of our operations and building a resilient
business that adapts to climate-related risks.
This year, we undertook a climate
vulnerability assessment to explore how the
physical risk exposure to different perils may
change over time across more than 300
facilities in Australia, Asia, the UK, France
and the Nordic region.
To stress-test resilience, the focus was
on a climate scenario (SSP5-8.5) where
global temperatures increase by greater
than 4 degrees.
A Physical Climate Analytics Dashboard has
been created, so we can continue explore a
range of different climate scenarios, hazards
and how they may affect operating locations
over time.
Further detail on our Task Force on Climate
related Financial Disclosures (TCFD) can be
found in our 2022 Impact Report.
Making the switch
Transitioning to renewable energy sources
is part of Ramsay’s greenhouse gas
emissions reduction strategy.
Ramsay UK and Elysium Healthcare have
made the switch to 100 per cent renewable
electricity and Ramsay Australia is rolling out
a significant solar energy program, already
including over 5,000 rooftop panels across
16 facilities.
7. Ramsay Cares
Ramsay Health Care Limited
Ramsay is guided by an
enduring ethos of ‘people
caring for people’.
Our patients
The Ramsay Way of ‘people caring for
people’ is exemplified in our steadfast focus
on our patients, people and partners.
This focus ensures Ramsay can continue to
deliver high quality care as the COVID-19
pandemic evolves. It will underpin our
endemic COVID operations and is critical
to Ramsay’s success as a world-class
healthcare network.
Serving our patients
As healthcare changes around the world,
Ramsay is moving to provide a wider range
of quality services, when and where our
patients need them.
We are doing that by investing in innovation,
expanding our hospital and primary care
networks, and extending our services into
the community.
Our specialist services are growing with
a global focus on four therapeutic areas
- cardiology, oncology, orthopaedics and
mental health.
Building on six decades of mental health
experience, this year Ramsay Australia
opened 11 additional psychology clinics
and New South Wales’s first private
mental health facility for teenagers,
and announced Australia's first women
only mental health facility dedicated to
treating the psychological and psychiatric
consequences of trauma.
Ramsay also secured a strong foothold
in the growing UK mental health
market through the acquisition of
Elysium Healthcare.
Elysium provides acute and specialist
mental health services in hospitals,
residential settings and community
based homes.
Elysium Healthcare CEO Joy Chamberlain opening
a recruitment and training hub at Hatfield.
Ramsay's coordinated cancer care programs
are being expanded in France, the UK
and Australia, while growing out-of-hospital
services such as Ramsay Health Plus and
Ramsay Connect are giving our patients
more choice and convenience through
integrated promixity care, at home services,
allied health and telehealth.
Harnessing our expertise
Ramsay's first global Clinical Excellence
Summit was held in July, bringing together
clinical and executive leaders from across
the group.
The gathering reinforced our strong and
shared commitment to the importance of
clinical excellence and promoting best
practice across clinical approaches and
governance, service design and patient
experience, research and education, quality
and strategy.
Ramsay's Clinical Excellence Agenda
is centred around global Communities
of Practice in four key therapeutic
areas: cancer, cardiology, mental health
and orthopaedics, as well as Ramsay’s
research activity.
These communities harness the deep
knowledge of our doctors and other
experts in order to accelerate collaboration,
innovation and clinical excellence across
Ramsay's facilities and services.
Summit participants Prof Sir Ed Byrne (Global Chief
Medical Officer), Prof Prokar Dasgupta (King's
College London), Dr Margareta Danelius (Ramsay
Santé - Capio), Craig McNally (Ramsay Managing
Director & CEO), Dr Jacob Thomas (Ramsay Sime
Darby Healthcare).
Improvement through innovation
Healthcare is changing rapidly, improving
quality, safety and efficiency. To ensure
Ramsay keeps pace with these changes, we
are growing our data and digital capability
and developing the skills and partnerships
needed to make us a leading healthcare
provider of the future.
Two senior appointments are leading this
growth and transformation.
Our new Global Chief Data & Digital
Officer, Dr Rachna Gandhi, is focused on
using technology to support a world class
patient experience.
Our new Group Chief Growth Officer,
Dr Andy Jones, is leading work to
grow Ramsay’s patient pathway and
fast track strategic projects across our
global businesses.
Ramsay Santé is driving change through
its Innovation and Partnership Hub. Its
2022 innovation awards received more than
100 nominations. The winners, from Capio
Närsjukvård in Sweden, were recognised
for developing a highly efficient, automated
COVID-19 vaccination process.
Ramsay Santé CEO Pascal Roché (left), Head
of Innovation Towa Jexmark (centre) and Chief
Transformation Officer Jamel Ouanda (right) with
the award finalists.
Patient experience
Feedback from our patients is routinely
gathered using the patient experience
measure Net Promoter Score1 (NPS).
In 2021-22, Ramsay maintained an excellent
level of positive experience with high scores
(above 70) across our operations in the UK
(82), Elysium (88)2, Australia (71), France (70)
and the Nordics (70). Ramsay Sime Darby
Healthcare also shows solid results with
Malaysia (51) and Indonesia (32).
Our partners
Ramsay is a trusted partner for medical
specialists and an employer of thousands of
doctors and other medical practitioners.
This year, Ramsay conducted a global
doctor survey to better understand their
experiences at Ramsay and help us to
identify and share best practice across our
global network.
1 The Net Promoter Score (NPS) is an index ranging from -100 to +100 that measures the willingness of customers to recommend a company’s products or services to others.
2
(%) Friends and Family Satisfaction Survey
34
Annual Report 2022
7. Ramsay Cares
Ramsay Health Care Limited
Landmark agreement
In June, Ramsay Santé became the first
European healthcare provider to sign a
Quality of Life & Working Conditions (QLWC)
agreement with the unions representing
more than 25,000 employees in France.
The agreement centres on ways to improve
health and safety, work-life balance, family
care and hardship provisions for our people.
"We have developed this QLWC agreement
with our social partners to reinforce a
balanced, fulfilling and inclusive framework
that will allow staff to grow within the
company," said Pascal Roché, CEO of
Ramsay Santé.
Connect and collaborate
For the first time in two years, Ramsay's
senior hospital and service managers have
been able to reconnect face to face to
address key challenges and share best
practice at several regional conferences.
The wide ranging agendas included
strategic planning, digital investment
and workforce planning in an endemic
COVID world.
Participants at Ramsay UK's Senior Leadership
Conference 2022.
Capio Management Program graduates.
Our people
As with all healthcare providers, workforce
attraction and wellbeing remain critical
challenges in all our markets.
Our group-wide People strategy revolves
around developing capability, culture and
the best people in healthcare.
Feedback from our late-2021 global
employee survey has been used to develop
region-specific action plans.
Priority areas include:
• providing more flexible
working conditions
• offering accessible learning and
training opportunities
• expanding our leadership programs
• investing in technology to simplify
processes and allow our people to spend
more time with our patients.
Diversity and inclusion
Ramsay Health Care is a significant
employer of women and is committed to
gender equality. Women comprise:
• 38% of Board members (43% of non
executive directors)
• 46% of senior leadership (our global
executive and direct reports).
Growing our people
Professional development and job
satisfaction is important to the wellbeing
of our people and Ramsay has
launched a range of new nursing
leadership and upskilling programs to
support advancement opportunities across
the business.
Through formal programs, workshops,
scholarships and masterclasses, we
are promoting our Nursing Leaders
of Tomorrow.
Participants in the Nursing Leaders of Tomorrow
program, launched by Ramsay Australia's Nursing
and Midwife Academy.
Ramsay Australia welcomed more than 800
graduate nurses this year.
Future Leaders
Our successful Executive Leadership
Program, run through the Ramsay
Leadership Academy, was offered to 49
emerging leaders from across our regions.
The program aims to activate the potential
of our senior leaders and accelerate their
growth. By supporting a growth mindset and
reinforcing the value of global collaboration,
we are developing Ramsay's future leaders.
Ramsay UK implemented enterprise-wide HR and
Electronic Patient Record systems to improve data
processing and productivity.
Group initiatives
During the year, Ramsay established
several global working groups to devise
group-wide initiatives aimed at advancing
our People strategy and reinforcing our
recruitment and retention programs. The
groups collaborated on several new
projects, including:
Formulating a global Employee Value
Proposition (EVP) that is unique to
Ramsay and clearly articulates what we
stand for, what we offer and why
people choose to work with us. The
global EVP is being augmented by
local EVPs to support geographically and
demographically relevant recruitment and
retention strategies.
Establishing a Global Corporate Graduate
Program, with our first cohort of outstanding
graduates undertaking an international
rotation to experience different parts of the
Ramsay business.
Developing an Alumni Program
Framework to leverage an additional
recruitment and referral pool of former
Ramsay employees.
Defining a Ramsay Leader to express the
behaviours and skills we seek to advance
for Ramsay’s future success.
Participants in Ramsay's global Executive
Leadership Program.
Group Chief People Officer Colleen Harris, Ramsay
MD & CEO Craig McNally, Elysium CFO Keith
Browner, Elysium Executive Medical Director Dr
Quazi Haque and Elysium CEO Joy Chamberlain
at Elysium Healthcare's Sharing Best Practice
Conference 2022.
Annual Report 2022
35
7. Ramsay Cares
Ramsay Health Care Limited
The Prevent2Care Tour also provides
financial grants to innovative preventative
health initiatives in Marseille, Toulouse,
Lyon, Bordeaux and Lille-Paris.
We support stronger,
healthier communities.
Twenty health professionals, including four from
Ramsay Santé, were the first to complete a unique
Diploma in Health Prevention offered by the
University of Western Brittany in partnership with
the Ramsay Santé Foundation.
Ramsay invests significant resources in
clinical research, teaching and training.
We are focused on a global approach to
clincial excellence, preventative healthcare
and supporting local communities.
Ramsay Hospital Research
Foundation (RHRF)
The Ramsay Hospital Research Foundation
program has grown to support more
than 1,000 clinical research projects
across Australia.
Ramsay's Clinical Trials Network covers
16 sites where Ramsay can partner
with industry, academia and independent
medical research institutes in the
development of new and potentially life
changing drugs, devices and technologies
that represent the future of healthcare.
The Foundation launched a website dedicated
to answering common questions about
preventative healthcare.
Community contributions
During the year, Ramsay teams and
the group gave support to a range of
communities in need.
Donations included vital medical supplies
and healthcare for refugees fleeing the
humanitarian crisis in Ukraine, financial aid
after flooding in Australia and community
food banks during COVID-19 lockdowns
in Malaysia.
Ramsay Australia held Research Month in
September to highlight a range of clinical trials and
projects involving about 40,000 patients.
Ramsay Santé Foundation
Ramsay Santé Foundation promotes
preventative healthcare by working with
local groups and partners.
The Foundation’s Prevent2Care Lab is an
accelerator program for preventative care
start-ups. Since 2018, the Foundation has
supported more than 70 projects. This
year, the program expanded to include
entrepreneurs from Sweden, Denmark
and Norway.
36
Annual Report 2022
The Care4Klang food bank initiative at Bukit Tinggi
Medical Centre.
The Yorkshire Clinic raised funds for The Cellar
Trust, a local mental health charity.
Responsible sourcing
Ramsay is committed to ensuring our
purchasing decisions have a positive impact
on people, the planet and the communities
in which we operate. In FY22, we procured
goods and services from a large and
complex global supply chain of over 15,000
suppliers in more than 30 countries.
Ramsay continued to apply its Code of
Conduct for Manufacturers, Suppliers and
Agents (Code) which sets out the minimum
standards we expect of our suppliers in the
key areas of
• legal compliance
• human and labour rights
• business ethics
• environmental impact.
As part of our Responsible Sourcing
Program, in FY22 more than 25 per cent
of our suppliers (by share of spend) were
assessed by an independent third-party,
EcoVadis, for their performance against
21 Corporate Social Responsibility (CSR)
criteria, including modern slavery.
Ramsay is committed to enforcing
the minimum standards expected of
suppliers and working with them to
implement appropriate business processes
or corrective action plans to ensure
their compliance.
Awards for
sustainable financing
Ramsay Health Care’s whole-of
business approach to sustainability
won a strong vote of confidence
from the banking and capital
markets industry.
The company's landmark A$1.5 billion
sustainability-linked loan (SLL) won
two significant awards – ‘Sustainable
Deal of the Year’ from the Asia
Pacific Loan Market Association and
‘ESG Loan of the Year’ from the
highly-regarded International Financing
Review Asia magazine.
Ramsay's Group CFO Martyn Roberts
said the sustainability-linked loan was
designed to drive group-wide change.
“The loan is tied to achieving important
targets, which were tailored to suit
Ramsay’s purpose of ‘people caring for
people’," he said.
“Our targets include boosting mental
health support for employees, as well
as reducing waste and greenhouse
gas emissions.”
At the time of completion, Ramsay’s
SLL was the first of its kind issued by
an Australian healthcare company and
the largest corporate syndicated SLL in
the Asia-Pacific.
8.
Governance
We are committed to delivering high quality health care services, long-term sustainable
growth and shareholder returns. The Board recognises the importance of good governance
in achieving these corporate objectives, in discharging its responsibility to the Company and
endeavouring to meet the expectations of all stakeholders and in executing the broader role of
Ramsay as a good corporate citizen.
Our Governance Framework
Our governance framework is designed to ensure that we are
effectively managed, that legal and regulatory obligations are met
and that the culture of personal and corporate integrity – the Ramsay
Way – is reinforced. The Ramsay Way philosophy is 'People Caring
for People'. We remain committed to maintaining these principles
across all aspects of our business, honouring the architect of The
Ramsay Way, the late Mr Paul Ramsay AO.
Our Board regularly reviews its corporate governance policies and
processes to ensure they are appropriate to meet governance
standards and regulatory requirements. The roles of the Board and
the Committees are set out in the Charters, available on the Ramsay
website at https://www.ramsayhealth.com/Sustainability/Governance.
Corporate Governance Statement
Further details are set out in the Corporate Governance Statement
for the financial year ended 30 June 2022, which outlines the key
aspects of our corporate governance framework and practices and is
available at www.ramsayhealth.com/Sustainability/Governance.
(L-R) Group General Counsel & Company Secretary, Henrietta Rowe; Non-Executive Director, James McMurdo; Non-Executive Director, Alison Deans; Managing
Director & CEO, Craig McNally; Chairman, Michael Siddle; Non-Executive Director, David Thodey AO; Non-Executive Director Karen Penrose; Non-Executive Director,
Claudia Süssmuth Dyckerhoff; Non-Executive Director, Steven Sargent.
Annual Report 2022
37
8. Governance
Ramsay Health Care Limited
Board of Directors - skills and experience
Our Board comprises eight directors, a majority of whom are independent Non-Executive Directors. Ramsay aims to maintain a Board that
comprises Directors who are able to understand effectively and manage the issues arising in the Company’s business, review and challenge
the performance of management and optimise the Company’s performance.
The following table sets out the various skills/experience that comprise our Board Skills Matrix:
Skill / Experience
SECTORS/ACTIVITIES
Health Care
Explanation
Operational or technical experience in the health care industry and international
health systems.
Global Experience
Ability to manage and oversee an organisation’s business and strategic
objectives from an international perspective.
SPECIFIC SKILLS AND EXPERIENCE
Strategy
Ability to identify and critically assess strategic opportunities and threats and to
develop and implement successful strategies.
Public Policy and Regulatory Affairs
Ability to influence public policy development and manage the implications of
public and regulatory policy.
Capital Management and Finance
Ability to assess financial performance, analyse financial statements and
implement effective internal financial and risk controls.
Technology and Disruption
Ability to leverage technological developments to support growth and drive
competitive advantage, including responding to digital disruption.
People and Culture
Ability to set & communicate corporate culture, motivate key talent, oversee
management and evaluate the suitability of CEOs and other key executives.
Workplace Health and Safety
Ability to oversee the proactive management of workplace health and
safety practices.
Consumer Focus
Ability to oversee a strong consumer-focused culture committed to achieving
consumer outcomes.
Operational Experience in Major Business
Ability to manage and oversee business operations and deliver sustained
business success.
Governance
Risk Management
Ability to assess governance, environmental and social issues and the
effectiveness of organisational policies and procedures.
Ability to identify and manage key risks, including regulatory, financial and non
financial risks, to an organisation.
Mergers & Acquisitions
Ability to assess strategic M&A opportunities and oversee
execution/completion.
38
Annual Report 2022
8. Governance
Ramsay Health Care Limited
Biographical details of Directors and Company Secretary
MICHAEL SIDDLE
Chairman
Appointed 27/05/14
(Appointed as a
Director 26/5/75)
Mr Michael Siddle was appointed as Chairman of the Company on 27 May 2014, having
been Deputy Chairman for 17 years and a founding Director. He has built up significant
knowledge of the business and the private hospital industry, after starting with the Company
in 1968. Mr Siddle has extensive experience in the management of private hospitals and has
been integrally involved in Ramsay Health Care’s successful expansion through construction,
mergers and acquisitions.
CRAIG MCNALLY
CEO &
Managing Director
Appointed 03/07/17
ALISON DEANS
MA MBA GAICD
Non
Executive Director
Appointed 15/11/18
Mr Siddle is also a Director of the Paul Ramsay Foundation.
Committee memberships:
• People & Remuneration Committee (Member)
• Nomination & Governance Committee (Member)
Independence status:
• Non-independent
Mr Craig McNally was appointed Managing Director and Chief Executive Officer of Ramsay
Health Care (Ramsay) on 3 July 2017, after serving seven years with Ramsay Health Care as
Chief Operating Officer and 22 years prior to this in various roles including Head of Global
Strategy and European Operations. Mr McNally is also the Chairman of Ramsay Santé.
Mr McNally is one of Ramsay’s longest serving Executives, having commenced with the
Company in 1988. He has worked across operational, strategic and financial roles during
his tenure.
For the last two decades, Mr McNally has been responsible for the development and
implementation of Ramsay’s growth strategy including brownfield expansions, international
market assessments, mergers and acquisitions and new business strategies. He has been at
the forefront of all the major acquisitions and deals completed by Ramsay Health Care. His
unique ability to assess the opportunities and risks associated with new business ventures and
to evaluate their ‘strategic fit’, as well as his sound judgement and insight, has ensured the
Company’s successful growth both domestically and internationally.
Mr McNally has been a key leader in the development of The Ramsay Way culture and, in
particular, developing leadership capability within the global organisation.
Alison Deans has 25 years’ experience building technology-enabled businesses involved in
media, ecommerce, financial services and health, and across leadership roles as an executive,
a director and in venture capital.
Ms Deans joined the Board of Ramsay Health Care in November 2018. She is also
Chair of Cochlear Limited and a Non-Executive Director of SCEGGS Darlinghurst, Deputy
Pty Ltd and the Observership Program. She is also on the Investment Committee of
MainSequence Ventures.
In her executive career, Ms Deans was previously the CEO of eBay Australia and New Zealand,
CEO of eCorp Limited, (a publicly listed portfolio of digital businesses), CEO of Hoyts Cinemas
and, most recently, CEO of netus Pty Ltd - a technology investment company acquired
by Fairfax.
Ms Deans also spent seven years as a Consultant with McKinsey & Company. She holds a
Master of Business Administration from the Stanford Graduate School of Business and a Master
of Arts (Physics) from Cambridge University.
In the past three years, Ms Deans has served as a Director of the following listed companies:
• Cochlear Limited (Appointed February 2015)
• Westpac Banking Corporation (Resigned December 2020)
Committee memberships:
• People & Remuneration Committee (Chair)
• Nomination & Governance Committee (Member)
Independence status:
• Independent
Annual Report 2022
39
8. Governance
Ramsay Health Care Limited
JAMES MCMURDO
BSC (ECONOMICS),
ACA
Non
Executive Director
Appointed 10/09/19
Mr James McMurdo has over 30 years finance and banking experience. He has a background
in corporate advisory spanning across mergers and acquisitions, strategic advisory and
financing with experience across multiple industries including the healthcare sector. He has
held senior operating management roles and worked extensively in both the Asia Pacific and
European regions.
Mr McMurdo is one of the Founding Partners of Privatus Capital Partners, an advisory
and merchant banking business. Prior to establishing Privatus, Mr McMurdo held senior
management roles at Deutsche Bank and was based in Hong Kong. During his time at
Deutsche Bank, he was Global Co-Head of Corporate Finance, Head of Corporate and
Investment Bank for Asia Pacific and CEO for Australia and New Zealand. He sat on the firm’s
Global Executive Committee for the Corporate and Investment Bank for four years.
Prior to this, Mr McMurdo was a Partner at Goldman Sachs, where he held senior positions in
the Investment Banking Division in Australia and Europe.
Mr McMurdo holds a degree in Economics from the University of Newcastle upon Tyne and is a
member of the Institute of Chartered Accountants for England & Wales.
Committee memberships:
• Audit Committee (Member)
Independence status:
KAREN PENROSE
B.COM (UNSW)
CPA FAICD
Non
Executive Director
Appointed 1/3/20
• Independent
Ms Karen Penrose has had an extensive executive career in leadership and CFO roles, mainly
in financial services. She is well-versed in financial management, customer outcomes and
operating in a rapidly changing regulatory environment which stems from 20 years in banking
with Commonwealth Bank and HSBC and eight years as a listed-company CFO.
Ms Penrose has been a full-time director since 2014 and is an experienced committee chair
of audit and risk. In addition to being a Non-Executive Director of Ramsay Health Care, Ms
Penrose also serves as a Director of Bank of Queensland, Cochlear and Estia Health. Ms
Penrose is a member of Chief Executive Women and on the Board of Marshall Investments Pty
Limited and Rugby Australia Limited.
In the past three years, Ms Penrose has served as a Director of the following listed companies:
• Bank of Queensland (Appointed November 2015)
• Cochlear Limited (Appointed July 2022)
• Estia Health Limited (Appointed October 2018)
• Ramsay Santé (Appointed February 2021)
• Spark Infrastructure Group (Resigned May 2020)
• Vicinity Centres (Resigned September 2022)
Committee memberships:
• Audit Committee (Chair)
• Risk Management Committee (Member)
Independence status:
STEVEN SARGENT
BBUS FAICD FTSE
Non
Executive Director
Appointed 25/11/21
• Independent
Mr Sargent’s executive career included 22 years at General Electric, where he gained
extensive multi-industry, international experience leading businesses in industries including
healthcare, energy and financial services across the USA, Europe and Asia Pacific.
Mr Sargent is currently a Non-Executive Director of Origin Energy Limited and Chair of infection
prevention company Nanosonics Limited. His unlisted board activities include Chairman of The
Origin Energy Foundation Limited, Origin’s philanthropic arm, and Non-Executive Director of
The Great Barrier Reef Foundation.
Mr Sargent holds a Bachelor of Business from Charles Sturt University and is a Fellow with
the Australian Institute of Company Directors and a Fellow with the Australian Academy of
Technological Sciences and Engineering.
In the past three years, Mr Sargent has served as a Director of the following listed companies:
• Origin Energy Limited (Appointed May 2015)
• Nanosonics Limited (Appointed July 2016)
• OFX Group Limited (Resigned August 2022)
Committee memberships:
• Risk Management Committee (Chair)
Independence status:
• Independent
40
Annual Report 2022
8. Governance
Ramsay Health Care Limited
CLAUDIA
SÜSSMUTH
DYCKERHOFF
PHD
Non
Executive Director
Appointed 30/10/18
DAVID
THODEY AO
Non
Executive Director
(Appointed
28/11/17) and
Lead Independent
Director
(Appointed 1/03/20)
Dr Claudia Süssmuth Dyckerhoff PhD joined the Ramsay Health Care Board in October
2018, bringing expertise in market growth strategies, business development and operational
performance improvement in hospitals.
Dr Süssmuth Dyckerhoff has extensive global experience in hospitals and health care
across Europe, Asia, and the USA. She joined McKinsey & Company in Switzerland in 1995
and was transferred to the USA focusing on supporting health care companies, including
pharmaceutical/medical device companies, payor, provider and health systems in Europe and
the USA. In 2006, Dr Süssmuth Dyckerhoff transferred to China, was elected Senior Partner in
2010 and supported health care companies as well as governments across Asia. She also led
McKinsey’s Asia-wide Health Systems and Services Sector. In 2016, when she was nominated
to the Board of Hoffmann-La Roche, she stepped down from her role as Senior Partner and
took on an external advisor role. Dr Süssmuth Dyckerhoff also supports start-ups in the health
care area; she joined the board of the Health Tech company HUMA in April 2021 and the board
of QuEST Global in November 2020.
Dr Süssmuth Dyckerhoff studied Business Administration at the University of St Gallen,
Switzerland as well as at ESADE, Barcelona where she graduated with an MBA/CEMS Master.
She also holds a PhD in Business Administration from the University of St Gallen/University of
Michigan Ann Arbor.
In the past three years, Dr Süssmuth Dyckerhoff has served as a Director of the following
listed companies:
• Hoffmann La Roche (Appointed March 2016)
• Clariant AG (Appointed April 2016)
Dr Süssmuth Dyckerhoff has also been appointed to the Board of Prudential plc, subject to
regulatory approval.
Committee memberships:
• Risk Management Committee (Member)
Independence status:
• Independent
Mr David Thodey AO is a business leader with an executive career in the technology and
telecommunications industries, garnering more than 30 years' experience creating brand and
shareholder value.
In addition to being a Non-Executive Director and Lead Independent Director of Ramsay Health
Care, Mr Thodey is currently Chair of Tyro Payments Limited (a leading alternative payments
provider) and Xero Limited (a small business accounting software company).
Mr Thodey was previously CEO of Telstra, Australia’s leading telecommunications and
information services company, Chair of Australia’s national scientific research agency, the
Commonwealth Scientific and Industrial Research Organisation (CSIRO) and, prior to that, CEO
of IBM ANZ.
Mr Thodey holds a Bachelor of Arts in Anthropology and English from Victoria University,
Wellington, New Zealand; he attended the Kellogg School of Management postgraduate
General Management Program at Northwestern University in Chicago, USA, and was awarded
an Honorary Doctorate in Science and Technology from Deakin University in 2016, as well as
an Honorary Doctorate of Business from University of Technology Sydney in 2018. Mr Thodey
is also a Fellow of the Australian Academy of Technological Sciences and Engineering (ATSE)
and the Australian Institute of Company Directors (AICD).
Mr Thodey was awarded an Order of Australia in 2017 for his service to business and the
promotion of ethical leadership and workplace diversity.
In the past three years, Mr Thodey has served as a Director of the following listed companies:
• Xero Limited (Appointed June 2019)
• Tyro Payments Limited (Appointed November 2018)
• Vodafone Group Plc (Resigned July 2020)
Mr Thodey is the Lead Independent Director and is a member of the following Committees:
• Nomination & Governance Committee (Chair)
• Audit Committee (Member)
• People & Remuneration Committee (Member)
Independence Status:
HENRIETTA ROWE
B.ECON (SOC
SCI) (HONS),
LLB (HONS),
FGIA, MAICD
Group General
Counsel &
Company Secretary
Appointed 25/06/19
• Independent
Ms Rowe was appointed Group General Counsel & Company Secretary on 25 June 2019 and is
responsible for the Group legal, governance and secretariat functions.
Ms Rowe has more than 15 years’ experience with leading global law firm, Herbert Smith
Freehills, and in-house at the Commonwealth Bank of Australia, specialising in corporate
governance, mergers and acquisitions and capital management.
She holds a Bachelor of Economics (Social Sciences) (Honours) and a Bachelor of Laws
(Honours) from the University of Sydney, is a Fellow of the Governance Institute of Australia
and a member of the Australian Institute of Company Directors Law Committee.
Annual Report 2022
41
8. Governance
Ramsay Health Care Limited
The Ramsay Board and Board Committee membership
As at 30 June 2022
Board
Audit
Committee
Risk
Management
Committee
People &
Remuneration
Committee
Nomination &
Governance
Committee
Name
Michael Siddle
Craig McNally
Alison Deans
James McMurdo
Karen Penrose1
Steven Sargent2
Claudia Süssmuth Dyckerhoff
David Thodey
1 Karen Penrose was a member of the Risk Management Committee throughout FY22 and Chair from 24 November 2021 to 23 August 2022. She remains a member of the Committee.
2 Steven Sargent was appointed to the Risk Management Committee as a member on 22 February 2022 and assumed the role of Chair of that Committee on 24 August 2022.
Chair and member
Member
Directors’ meetings
The number of scheduled Board and committee meetings held during the financial year ending 30 June 2022 and the number of meetings
attended by each of the Directors in office during this period is set out in the table below.
Please note the number of meetings that each Director was eligible to attend is included in brackets.
Name
Michael Siddle
Peter Evans1
Craig McNally
Alison Deans
James McMurdo
Karen Penrose
Steven Sargent2
Claudia Süssmuth Dyckerhoff
David Thodey3
Board
17 (17)
7 (7)
17 (17)
16 (17)
17 (17)
17 (17)
10 (10)
16 (17)
17 (17)
Audit Committee
Risk
Management
Committee
People &
Remuneration
Committee
Nomination &
Governance
Committee
-
3 (3)
-
-
5 (6)
6 (6)
-
3 (3)
-
(2) (2)
-
-
-
4 (4)
2 (2)
4 (4)
(1) (1)
6 (6)
-
-
6 (6)
-
-
-
6 (6)
3 (3)
-
-
3 (3)
-
-
-
3 (3)
1 Peter Evans resigned on 24 November 2021
2 Steven Sargent was appointed to the Board on 25 November 2021 and to the Risk Management Committee on 22 February 2022
3 David Thodey was a member of the Risk Management Committee from 24 November 2021 until 22 February 2022
42
Annual Report 2022
9.
Remuneration Report – Audited
Letter to Shareholders
Dear Shareholders
On behalf of the Board of Ramsay Health Care (Ramsay or the Group), I am pleased to present our FY22 Remuneration Report (Report).
As described in detail in this annual report, FY22 was another year of challenges and uncertainty due to the ongoing impact of COVID on
Ramsay hospitals, patients and our people. This included lockdowns, isolation orders and surgical restrictions throughout much of the year, and
in all regions. Indeed, the short-term financial impact of COVID in FY22 was more severe than in FY21, estimated at $276m impact on NPAT in
Australia alone. The Ramsay management team demonstrated resilience, agility and dedication in responding to the ongoing and unpredictable
challenges presented, while still pursuing our 2030 strategy. Progress towards our 2030 strategy was in line with plans, while financial results
for the year were disappointing in an absolute sense, with NPAT down 39% on FY21, but commendable relative to the external conditions.
In determining the remuneration outcomes for the year, the Board reflected on our remuneration principles of
• attracting, retaining and motivating the best global talent
• fairly rewarding performance
• transparency and simplicity
• promoting sustainable, long-term value for shareholders and other stakeholders.
As a result, the Board decided to exercise judgement in assessing the short-term financial performance element of the STI scorecard.
Specifically, the board determined that it was in line with our remuneration principles to assess financial performance for the year relative to
the impacts of COVID ie assessing how well the team adapted to the unfolding COVID environment in their region in order to achieve the best
possible financial outcomes for the year in those circumstances. All other components of remuneration were assessed without any adjustment
for the impact of COVID.
• Exercising judgement in this way, the board assessed the financial performance component of the STI scorecard as Partially Met and the
overall performance as Partially Met. This resulted in an overall performance of 68% of maximum for the CEO & MD and 71% of maximum for
the Group Chief Financial Officer (Group CFO). More details on this determination are included below and in the remuneration report.
• In-line with shareholder outcomes, the FY20 long-term incentive (LTI) did not vest
• No increases were made to fixed annual remuneration (FAR) for Executive Key Management Personnel (KMP).
More detail is given below on the assessment of strategic and financial outcomes for FY22 considered in determining the remuneration
outcomes for the year.
Strategic Outcomes in FY22
In FY22, the Ramsay management team made significant progress on our 2030 strategic priorities and in strengthening our values (which we
call The Ramsay Way). Highlights for FY22 included the following:
• Ramsay continued to support public sector and community responses to the pandemic. Ramsay teams have also been working with
Governments to provide additional capacity over the medium to long-term to address growing public waiting lists for elective surgery and
non-surgical services. Ramsay’s employees and clinicians moved quickly to organise numerous local vaccination programs, while continuing
to care for hospitalised COVID patients.
• Ramsay continued to grow and modernise its hospital network through organic growth opportunities and strategic acquisitions. In
FY22, Ramsay acquired Elysium Healthcare, giving us a strong foothold in the UK’s growing mental health market. Ramsay Santé acquired a
network of 24 specialist clinics in Sweden to complement our hospitals and primary care centres across the Nordic region. Ramsay Australia
and Ramsay UK have opened new hospitals and services, as well as upgrading many facilities.
Annual Report 2022
43
9. Remuneration Report – Audited
Ramsay Health Care Limited
• Ramsay made progress in developing its digital and data strategies. Ramsay continued to build its digital capability and progress a digital
roadmap, which will include integrated patient pathways, digi-physical care to support clinical excellence and data-driven decision-making.
• Stakeholders showed strong support for Ramsay’s sustainability strategy. Our approach to sustainability received a clear vote of
confidence from the banking and capital markets industry, with our A$1.5 billion sustainability-linked loan (SLL) winning ‘Sustainable Deal
of the Year’ from the Asia Pacific Loan Market Association and ‘ESG Loan of the Year’ from the International Financing Review Asia magazine.
Ramsay has also committed to near and long-term science-based decarbonisation targets to achieve net zero greenhouse gas emissions by
2040. Our Ramsay Cares sustainability initiatives have been embraced by our people and we are making steady progress towards achieving
our targets.
• Ramsay strengthened its global response to staff shortages and combatting COVID-related fatigue in frontline teams. Ramsay is
committed to addressing critical and chronic shortages in the global healthcare labor market through a wide range of initiatives including
our nursing ‘leader of tomorrow’ programs, corporate and clinical graduate programs and a landmark agreement to promote quality of life at
work for Ramsay Santé employees in France.
• Ramsay’s balance sheet allowed continued investment in long-term growth opportunities. The Group continued to invest in our long-term
strategy and opportunities for growth. This will allow the group to capitalise on underlying demand for hospital and adjacent health services
in all our regions (including the backlog of elective surgery and a growing pipeline of non-surgical cases) and rising activity levels are rising,
as our regions move into an endemic COVID-19 setting.
In April 2022, the private equity investment company KKR made an unsolicited takeover bid for Ramsay. Ramsay’s management responded to
additional demands arising because of this approach.
Financial outcomes in FY22
The financial outcomes for FY22 were disappointing in an absolute sense, with NPAT down 39% on FY21. FY22 was heavily impacted by the
ongoing effects of the COVID-19 pandemic; notably, the COVID impact on financial outcomes in FY22 were more severe than in FY21. For
example, Ramsay Australia experienced significant lockdowns, isolation orders and surgical restrictions in the first nine months of the year, as
well as significant increased costs throughout the year of operating in a COVID environment. The financial impact of these disruptions in FY22
was estimated to be around $276m for Ramsay Australia. (See Group FY2022 Financial Results for further details of the disruption caused by
COVID and impact on financial outcomes by region).
The Board considered the magnitude of the impacts of COVID on the financial outcomes of the group alongside the Ramsay Remuneration
Principles: attracting, retaining and motivating the best global talent; fairly rewarding performance; transparency and simplicity; alignment with
strategy; and alignment with long-term shareholder value.
As a result, the Board chose to apply prudent judgement in assessing the financial performance component of the STI scorecard. In particular,
the Board decided to consider the financial performance of the business - in each region and as a whole - relative to the circumstances
presented to the business as the year unfolded and, in particular, as the impact of COVID unfolded in each region and how well the team
adapted to the changes in order to achieve the best possible financial outcomes in the circumstances.
On this basis, the Board determined that the financial outcome of FY22, while disappointing at an absolute level, was a commendable
performance by management given the extraordinary circumstances presented to the business. Our teams responded remarkably well in most
instances to the challenges as they unfolded, however there were some areas where the businesses could have responded more completely.
As a result, this component of the scorecard was assessed by the Board as Partially Met.
While other aspects of the business were also impacted by COVID disruption in FY22, the four non-financial components of the STI scorecard
were considered against the relevant goals without any adjustment for COVID impact. Performance against the non-financial components of the
scorecard are detailed in the remuneration report.
Remuneration changes for FY22: New environmental STI measure
Ramsay recognises that safeguarding our environment is a key responsibility of the business community. Reducing waste and minimising our
use of scarce resources is also consistent with financial responsibility and meeting the expectations of our stakeholders. Ramsay has committed
to sustainability initiatives such as uniting with the Climate Leaders Coalition (a group of 33 leading Australian companies and their CEOs who
are committed to the ambitions of the Paris Agreement) and the Board is of the view that executives should be accountable for the Group’s
environmental performance. To reflect this, in FY22 the Board introduced a new measure in the Chief Executive Officer & Managing Director’s
(CEO & MD) short-term incentive (STI) scorecard, being “greenhouse gas intensity reduction”. Further details are included in 3.2.
No other changes were made to the FY22 executive remuneration framework following an extensive review in FY20 and FY21.
Summary of outcomes
In FY22, having regard to the Group’s performance during the financial year (as outlined above):
• No increases were made to fixed annual remuneration (FAR) for Executive Key Management Personnel (KMP).
• The FY22 STI vested at 68% of maximum for the CEO & MD and 71% of maximum for the Group Chief Financial Officer (Group CFO).
• The FY20 long-term incentive (LTI) did not vest.
Refer to section 3 for further detail on FY22 remuneration outcomes.
We look forward to feedback from shareholders on this FY22 Remuneration Report.
ALISON DEANS
Chair, People and Remuneration Committee
44
Annual Report 2022
9. Remuneration Report – Audited
Ramsay Health Care Limited
Remuneration Report Contents
45
46
52
58
60
62
1 Key Management Personnel (KMP)
2 Executive Remuneration Framework
3 FY22 Performance & Remuneration Outcomes
4 Non-Executive Director Remuneration
5 Remuneration Governance
6 Further information
1 Key Management Personnel (KMP)
This Report for the year ended 30 June 2022 has been prepared in accordance with section 300A of the Corporations Act 2001 (Cth) and the
Accounting Standards.
The Report discloses the FY22 remuneration arrangements and outcomes for the people listed below, who are the individuals within the Group
who have been determined to be key management personnel (KMP) in the financial year to 30 June 2022. KMP are those people who have the
authority and responsibility for planning, directing and controlling the Group’s activities, either directly or indirectly. No changes were made to
KMP for FY22.
Name
Executive KMP
Mr Craig McNally
Mr Martyn Roberts
Non-Executive Directors
Mr Michael Siddle
Ms Alison Deans
Mr James McMurdo
Ms Karen Penrose
Dr Claudia Süssmuth Dyckerhoff
Mr David Thodey
Mr Steven Sargent1
Mr Peter Evans2
Position
MD & CEO
Group CFO
Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Former Deputy Chairman
1 Mr Sargent was appointed as Non-Executive Director ( NED) of Ramsay with effect from 25 November 2021.
2 Mr Evans ceased as NED of Ramsay with effect from 24 November 2021
Term
Full year
Full year
Full year
Full year
Full year
Full year
Full year
Full year
From 25 November 2021
Until 24 November 2021
Annual Report 2022
45
9. Remuneration Report – Audited
Ramsay Health Care Limited
2 Executive Remuneration Framework
2.1 Alignment of Ramsay’s strategy & remuneration framework
Ramsay's executive remuneration framework is designed to attract, motivate and retain a highly qualified and experienced group of executives.
It is intentionally structured to align our executives to the creation of long-term shareholder value by successfully executing our strategy and
delivering on quality consumer outcomes, in accordance with The Ramsay Way.
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Annual Report 2022
By growing, modernising and leveraging ourWorld Class Hospital NetworkAnd moving purposefully into New & Adjacent ServicesOUR VISION: To leverage our global platform and be a leading healthcare provider of the futureOUR MISSION: Creating a best-in-class, digitally enabled healthcare ecosystem - to change what is possible for your healthIntegrated patient-centred careOur remuneration principlesOur remuneration frameworkOUR PURPOSE: People caring for peopleOperational Excellence will deliver value for all stakeholdersProcurementOperational efficienciesExcellence in service deliveryOrganic growthStrategic expansionStrategic growth in key therapeutic areasBroader digi-physical care deliveryNew services, existing regionsDiagnostic and imaging servicesNew payers and funding modelsExtended patient pathwayStrong Organisational Foundations will underpin our achievementsDigital and data transformationClinical excellenceIndustry leading talentRamsay Cares sustainability strategyStrategic partnerships and M&A capabilityEnabling Ramsay to attract, motivate and retain the best talent globally Provides reward where individuals have demonstrated strong performance Can be easily explained and understood by all stakeholders Drives performance against strategy Drives long term value for shareholdersEncourages the right behaviours aligned to “People Caring for People” Attract, retain & motivate Performance based Simple & transparentStrategic alignment Shareholder alignment The Ramsay WayProvides competitive base pay to attract and retain the capability required to manage and lead a global business (see section 2.3) Rewards performance in executing Ramsay’s strategic priorities during the year, and behaviour aligned to the Ramsay Way (see section 2.4) Drives long-term value creation for shareholders and encourages an owner’s mindset and long-term decision making (see section 2.5) Further supports alignment between the interests of executives and our shareholders (see section 2.7)FARSTILTIMinimum shareholding requirement 9. Remuneration Report – Audited
Ramsay Health Care Limited
2.2 Remuneration mix: the composition of our pay
The proportions of reward for current Executive KMP (i.e. the MD & CEO and Group CFO) that are delivered by each of the framework elements
when “target” and “maximum” performance is achieved is set out below. The remuneration mix is weighted towards at-risk, performance-based
remuneration to ensure a focus on both short-term and long-term performance, and alignment with shareholder interests.
2.3 Fixed Annual Remuneration (FAR) overview
FAR is set taking into account market benchmarks referenced to ASX-listed companies with similar market capitalisation, revenue and
international operations. As a global organisation and recognising that there are no direct Australian listed competitors, consideration is also
given to international healthcare organisations and other private healthcare operators in Australia.
To remain market competitive, FAR is reviewed annually against appropriate market benchmarks considering individual performance for the
year and the executive’s expertise brought to the role (see section 3.1 for FY22 FAR levels for Executive KMP).
2.4 FY22 Short-Term Incentives (STI)
The Group’s STI plan is designed such that a proportion of Executives’ remuneration is at-risk – to be delivered based on the achievement of
performance measures linked to annual business objectives linked to the delivery of strategy.
The table below outlines the key terms and conditions applying to the STI arrangements for the Executive KMP during FY22. Refer to section
3.2 for detail in respect of FY22 STI outcomes.
Component
Opportunity
levels
Performance
period
How STI
awards are
assessed
Target Opportunity (% of FAR)
Detail
Executives
CEO & MD
Group CFO
STI awards are assessed over the 12-month financial year. Any STI award payments are made after
performance is tested at the end of the performance period.
As shown in the diagram below, performance outcomes for all Executive KMP are determined based
on both Group and individual performance, using a scorecard, and moderated by performance
aligned with “The Ramsay Way” (see below for further detail on the STI scorecard measures and the
performance modifier respectively).
100
50
125
60
Maximum Opportunity (% of FAR)
The Board, in conjunction with the People & Remuneration Committee may exercise judgement and
apply discretion as is required to ensure that STI outcomes appropriately reflect the performance of
the individual and the Group, as well as aligning to the expectations of Ramsay’s stakeholders.
STI Opportunity
FAR
($)
x
STI Target
Opportunity
(%)
Unadjusted
Outcome
x
Scorecard Result
(%)
x
Ramsay Way
Modifier
The Ramsay
Way
(%)
Performance
Outcome
=
Value of STI
Award ($)
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CEO(at target)27%27%46%CFO(at maximum)40%24%36%CEO(at maximum)25%31%44%CFO(at target)42%21%37%FARSTILTI
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Component
Detail
Performance
measures
(i.e. STI
scorecard)
The STI scorecard measures are aligned to five key strategic priorities – each one fundamental
to delivering on the Group’s strategy. These priorities are all measurable on an annual cycle and
fundamental to the delivery of our long-term strategy as they measure the financial outcomes and
strategic foundations delivered during the year whilst also ensuring we are continually improving our
culture, consumer engagement and high standards of quality.
A copy of the MD & CEO’s scorecard for FY22 can be found in section 3.2(b) of this report. For
executives, the scorecard cascades from the MD & CEO.
FY22 was heavily impacted by the ongoing effects of the COVID-19 pandemic, with the COVID impact
on financial outcomes in FY22 more severe than FY21. The Board considered the magnitude of
the impacts of COVID on the financial outcomes of the group alongside the Ramsay Remuneration
Principles of attracting, retaining and motivating the best global talent; fairly rewarding performance;
transparency and simplicity; alignment with strategy; and alignment with long-term shareholder value.
As a result, the Board chose to apply judgement in assessing the financial performance component
of the FY22 STI scorecard. In particular the Board decided to consider the financial performance
of the business – in each region and as a whole - relative to the circumstances presented to the
business as the year unfolded and assess how well the team adapted to the unfolding environment
in their region in order to deliver the best possible financial outcome for the year relative to the
circumstances presented.
For non-financial metrics, quantitative metrics are used wherever possible and complemented with
qualitative metrics, assessed in performance appraisals undertaken by the People & Remuneration
Committee and the Board, drawing on multiple sources of feedback.
Rationale
Financial results are critical to delivering for our key
stakeholders including patients, staff and shareholders,
as well as positioning Ramsay to deliver long
term value.
Operational
Executive (i.e. MD
& CEO)
Non-Operational
Executive (i.e.
Group CFO)
Financial
Typically financial results are measured against targets
set at the beginning of the year.
50%
40%
In 2022, financial results were considered relative
to the challenges and impact of the ongoing
COVID-19 pandemic.
Delivery of annual strategic objectives that are key to
delivering the long-term strategy.
Our people are our most important asset and our
culture, The Ramsay Way is fundamental to our
ongoing success.
Listening and responding to the needs of our patients
allows us to continually evaluate and improve on
all aspects of our performance ensuring ongoing
competitive advantage.
Delivering superior clinical outcomes is critical to our
ongoing success, so we focus on maintaining the
highest stands of clinical quality and safety.
Strategic
People
Consumer
Quality
15%
15%
10%
10%
20%
20%
10%
10%
‘The Ramsay
Way’
Performance
Modifier
Delivery
The Ramsay Way 'People Caring for People' is the Group’s cultural backbone which assists in guiding decision making that
is both people and outcome focused, while also balancing risk behaviours in both a financial and non-financial sense.
The Ramsay Way performance modifier allows for adjustments to outcomes for each individual, based on their
demonstration of The Ramsay Way values and behaviours.
The application of this modifier can only reduce the quantum of awards, with the modifier being a multiplier between
0–100%.
After performance is assessed, the STI award is delivered 50% in cash and 50% in deferred equity in the form of
restricted shares.
• For the CEO & MD, restricted shares are granted and deferred for 3 years (subject to continued employment at the
relevant vesting date).
• For other Executive KMP, the deferral period is 2 years with 50% of the deferred equity being released after the first year
and the second 50% released at the end of the subsequent year (subject to continued employment at the vesting date).
Restricted shares are allocated on a face value basis by dividing the deferred STI amount by the 5-day volume weighted
average price (VWAP) of Group shares to the STI payment date (rounded to the nearest whole number of shares).
Deferred STI Amount
($)
(50% of STI Award)
/
Share Price
($)
Face value allocation using
5 Day VWAP to STI
payment date
=
Allocation of
Restricted Shares
(Rounded to
the nearest
whole number)
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2.5 FY22 Long Term Incentives (LTI) – granted
a) Overview
The LTI plan is designed to reward sustainable long-term performance and align executives to shareholder outcomes, while supporting Ramsay
to attract and retain the best talent globally.
b.) Key terms
The table below outlines the key terms attaching to the LTI awards granted to Executive KMP during FY22.
Component
Opportunity
levels
Detail
The table below outlines the face value of LTI awards granted to Executive KMP during FY22. LTI opportunities have
been set based on the ability of the executive to influence sustainable long-term value creation.
Instrument
Allocation
methodology
Executive KMP
C.R. McNally
M.J. Roberts
The Group’s LTI awards are delivered in performance rights.
Maximum LTI
Opportunity (% of FAR)
175% of FAR
90% of FAR
Maximum LTI
Opportunity ($)
3,650,325
1,080,000
Performance rights are granted for no consideration as they form part of the remuneration package for Executive KMP.
Each performance right is an entitlement to receive a fully paid ordinary share in Ramsay Health Care Limited at no cost
(or an equivalent cash payment at the discretion of the Board).
Performance rights are granted using a face value methodology.
Each individual’s dollar value LTI opportunity (as a percentage of FAR) is divided by the five-day VWAP up to
and including the first trading day of the performance period.
Executive
FAR Amount
($)
x
LTI Opportunity
(%)
Share Price
($)
/
Face value allocation using
5 Day VWAP to first day of
performance period
=
Allocation of
Performance
Rights
(Rounded to the
nearest whole
number)
Performance
Period
Calculation of
Awards
3 years (i.e. 1 July 2021 – 30 June 2024) for the FY22 grant.
Overview
FY22 LTI awards are subject to two performance conditions:
• Relative Total Shareholder Return 'Relative TSR' (50%) against the S&P / ASX100 index (excluding real estate,
finance and resources industries, as they have different drivers of operating performance); and
• Compounded Annual Growth Rate in Earnings per Share 'CAGR in EPS' (50%) subject to the achievement of the
ROIC gateway noted below.
Relative TSR (50%)
A relative TSR performance condition is used, as the Board is of the view that use of a TSR hurdle provides a strong link
between executive remuneration and shareholder return, relative to Ramsay’s ASX peers.
The Board also considers that it is appropriate to use a broader index-based comparator group (as outlined above)
rather than a sector specific peer group as there are too few Australian healthcare companies of a similar size and
scope of operations to Ramsay for benchmarking purposes.
The following table sets out the vesting schedule in respect of the relative TSR performance metric.
Group’s relative TSR
Below 50th Percentile
50th Percentile
50th and
75th Percentile
Above 75th Percentile
CAGR EPS (50%)
Vesting
Nil
50% vesting
Vesting on a straight-line basis between 50% and 100% vesting
100% vesting
EPS has been chosen as it is linked to long-term growth targets and provides evidence of Ramsay’s growth in
profitability and is linked to shareholder returns.
The measurement of EPS will be based on a 3-year growth range against threshold and stretch
performance hurdles.
Subject to the achievement of the ROIC gateway noted below, the following table sets out the vesting schedule
in respect of the EPS performance metric.
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Component
Detail
CAGR EPS
Less than 3%
3% (threshold)
Between 3% and 9%
9% (stretch)
Vesting
Nil
30% vesting
Vesting on a straight-line basis between 30% and 100% vesting
100% vesting
ROIC gateway
As noted above, the EPS component of FY22 LTI awards will be subject to a Return on Invested Capital 'ROIC' gateway,
reflecting the capital intensive nature of the Group’s business. That is, both the EPS hurdle and ROIC gateway will need
to be met in order for any vesting to occur.
Board
discretion and
adjustment
principles
The ROIC outcome for the Group over the 3-year performance period is tested relative to the weighted average
cost of capital (WACC) for the Group over the 3-year performance period. The actual ROIC outcomes will need to be
above WACC for vesting to occur. The Board will consider the impact of acquisitions (which are made in line with a
Board approved acquisition plan) in the assessment of ROIC, including exclusion of capital spent and the returns from
that acquisition for the period of the approved build and ramp-up, to ensure that participants are not penalized for
undertaking an investment which is expected to deliver long-term profitable growth.
The Board assesses achievement of the performance conditions having regard to external data and the Company’s
audited financial statements.
The Board, in conjunction with the People & Remuneration Committee, may exercise judgement and apply its
overarching discretion as is required to ensure that LTI outcomes appropriately reflect the performance of the individual
and the Group, as well as aligning to the expectations of Ramsay’s stakeholders.
In particular, the Board has discretion to make adjustments to the EPS outcomes used for the purposes of the FY22 LTI
award and, as noted above under “ROIC Gateway”, the Board will consider the impact of acquisitions (which are made in
line with a Board approved acquisition plan) in the assessment of the ROIC gateway.
To ensure any adjustments are consistently applied, five guiding principles will be applied as follows:
• Plan integrity and management accountability - adjustments will be made to align with the purpose of the plan and
reflect management accountability for past decisions;
• Nature and timing of adjustments - adjustments, both positive and negative, will only be made at the time of vesting;
• Transparency - the Group will provide a clear rationale and disclosure, for any adjustments made, especially in case
where performance has not been achieved;
• Material or significant events - adjustments will only be made for events or items over the vesting period that have a
material impact positively or negatively on the performance outcome, and consequently reward outcome;
• Balance of interests - adjustments will be balanced to ensure outcomes are not unfairly biased towards either
shareholders or management.
The Board will provide clear and transparent disclosure in respect of any exercise of Board discretion or adjustments to
EPS in the relevant Remuneration Report.
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2.6 Other terms
The following components apply to both the STI and LTI.
Component
Board Discretion
Treatment
on cessation
of employment
Malus and clawback
Detail
As noted above, the Board, in conjunction with the People & Remuneration Committee, may exercise judgement
and apply discretion as is required to ensure that incentive outcomes appropriately reflect the performance of the
individual and the Group, as well as aligning to the expectations of Ramsay’s shareholders.
The Board retains absolute discretion in determining STI payments for a leaving executive. However, if an
executive ceases employment with Ramsay before key performance indicator (KPI) targets are achieved, then
they will generally not be entitled to receive any STI. However, if cessation of employment is due to retirement,
illness, disability or death or is a Group-initiated termination other than for cause, the Executive may receive a
pro-rata STI payment for the portion of the performance period they were employed.
Restricted shares granted as the deferred equity component of any STI payment will lapse if employment is
terminated for cause or if the Executive resigns (or gives notice of resignation) prior to the relevant vesting date. If
the Executive ceases employment for any other reason, the Restricted Shares will remain on foot and vest in the
ordinary course.
LTI performance rights will lapse if employment is terminated for cause or if the Executive resigns (or gives notice
of resignation) prior to the relevant vesting date. If cessation of employment is due to any other reason including
retirement, illness, disability or death or is a Group-initiated termination other than for cause a pro rata portion will
remain on foot and be tested in the ordinary cause of business.
In all cases, the Board has discretion to determine a different treatment on cessation of employment.
The Board may take action to reduce, recoup or otherwise adjust “at-risk” remuneration including in-year
incentives, unvested incentives and previously awarded incentives (cash or equity) where, in the opinion of
the Board:
• the employee has acted fraudulently or dishonestly, engaged in gross misconduct and / or breached his or her
duties or obligations to the Group (including acting in breach of the terms and conditions of their employment
and/or Ramsay’s Code of Conduct for Employees);
• has engaged in an act which has brought the Group into disrepute or has acted or failed to act in a way that has
contributed to, or is likely to contribute to, material reputational damage to the Group;
• is convicted of an offence or has a judgement entered against them in connection with the affairs of the Group;
• “at-risk” remuneration vests as a result of a financial misstatement circumstance or the fraud, dishonesty,
negligence or breach of duties or obligations of any other person and, in the opinion of the Board, the
remuneration would not have otherwise vested;
• adverse outcomes have arisen after vesting of “at-risk” remuneration (including during the deferral period) that
cause a re-evaluation of the original assessment of performance generating the award; and/or
• any other circumstances exist or have occurred which the Board determines in good faith to have resulted in
the employee receiving an unfair benefit.
The ability of the Board to apply the policy is broad and includes (but is not limited to) lapsing or requiring
repayment of awards, and for unvested equity re-setting performance conditions or amending the terms on which
they are disposed.
2.7 Minimum shareholding requirements
A minimum shareholding requirement was introduced from the start of FY20 for Executive KMP and NEDs. This Policy is intended to support
alignment between KMP and the Group’s shareholders and requires all Executive KMP and NEDs to obtain and hold Ramsay shares in line with
the detail below:
Position
MD & CEO
Executive KMP
Non-Executive Directors
Minimum Shareholder Requirement
200% of FAR
100% of FAR
100% of base annual fees
Timeframe to Acquire
Five years from time of appointment (or
implementation of policy for individuals in role at
1 July 2019).
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3 FY22 Performance & Remuneration Outcomes
This section provides a summary of Ramsay’s performance in FY22, and the actual remuneration outcomes that this delivered for
our executives.
3.1 FAR levels
For FY22, there were no adjustments to fixed remuneration for executives. The table below sets out FAR level for Executive KMP for FY22.
Executive KMP
C.R. McNally
M.J. Roberts
FAR (FY21)
$2,085,900
$1,200,000
FAR (FY22)
$2,085,900
$1,200,000
3.2 Actual STI outcomes
a) Overview
Actual STI outcomes delivered to Executive KMP in FY22 are set out in the table below. An overview of performance against the FY22
scorecard (including key financial measures) is outlined in section (b) below.
Executive
KMP
Target STI
opportunity
($)
Target STI
opportunity (%
of FAR)
Maximum STI
opportunity
($)
Maximum STI
opportunity (%
of FAR)
% of target
FY22 STI
target
awarded
% of
maximum
FY22 STI
awarded
C.R. McNally
M.J. Roberts
$2,085,900
$600,000
100% of FAR
50% of FAR
$2,607,375
$720,000
125% of FAR
60% of FAR
85.0%
85.0%
68%
71%
% of
maximum
FY22 STI
award
forfeited
32%
29%
b) Performance against FY22 STI scorecard
The table on the following page provides an overview of performance achieved against the MD & CEO’s FY22 STI scorecard.
As noted in section 2.4, FY22 was heavily impacted by the ongoing effects of the COVID-19 pandemic, with the COVID impact on financial
outcomes in FY22 more severe than FY21.
The financial outcomes for FY22 were disappointing in an absolute sense, with NPAT down 39% on FY21. FY22 was heavily impacted by
the ongoing effects of the COVID-19 pandemic; indeed, the COVID impact on financial outcomes in FY22 was more severe than in FY21. For
example, Ramsay Australia experienced significant lockdowns, isolation orders and surgical restrictions in the first nine months of the year, as
well as significant increased costs throughout the year of operating in a COVID environment. Various hospitals in Australia were prevented from
conducting elective surgery for over 200 days, our staff were impacted by COVID which was the primary driver of an increase in sick leave of
over 40,000 days versus prior corresponding period. COVID related surgical restrictions impacted surgical procedures and patient admissions
and was the key driver of the unfavourable variance to plan of over 35,000 surgical procedures and 50,000 patient admissions. The financial
impact of these disruptions in FY22 was estimated to be around $276m for Ramsay Australia. (See Group FY2022 Financial Results for further
details of the disruption caused by COVID and impact on financial outcomes by region).
During FY22 our workforce was severely disrupted by COVID-19 with elective surgery restrictions across all our regions impacting volumes,
as well as isolation requirements impacting the availability of our people, our doctors and patients. This has had an impact on the effective
capacity of our hospitals. The prolonged period of uncertainty and increased burden has had a toll on our people requiring strong adaptive
leadership to navigate these exceptional challenges.
Ramsay’s people and doctors have continued to assist governments, across all our regions in dealing with the pandemic through the treatment
of COVID cases, the treatment of critical non COVID patients and running activities such as vaccination and testing clinics. And as they have
always done, our people have supported our local communities with healthcare services and supplies through crises such as the floods in
Australia and the conflict in Ukraine.
Throughout the pandemic we took the decision to retain our core hospital operations and staffing levels, consistent with Ramsay’s values of
The Ramsay Way 'People Caring for People'. While this approach has impacted profitability in the short term it means we are well placed to
ramp up our activities and service our patients and communities as activity levels improve
The Board considered the magnitude of the impacts of COVID on the financial outcomes of the group, alongside the Ramsay Remuneration
Principles. As a result, the Board has used judgement to assess the financial performance component of the FY22 STI scorecard relative
to the impacts of the COVID-19 and how well the team adapted to the changes in order to achieve the best possible financial outcomes in
the circumstances.
As noted above, the Board is of the view that executives should be accountable for the Group’s environmental performance. Reflecting this, in
FY22, the Board introduced a new measure in the CEO & MD’s STI scorecard, being “greenhouse gas intensity reduction” as detailed below.
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Measure
Financial
Weight Achievement Commentary on performance
• Financial outcomes assessed in the
light of the impacts of COVID-19
50%
Strategic
• Growth investment
• Strategy development
and implementation
• Greenhouse gas intensity reduction
15%
People
• Workplace fatalities = 0
• Workplace safety as measured
by top quartile long time injury
frequency rate (LTIFR)
• Gender diversity in
senior management
• Executive leadership development
& capability
• Employee engagement and culture
Consumer
15%
• For FY2022 the Board chose to apply judgement in assessing financial performance component of the STI scorecard. In particular,
the Board decided to consider the financial performance of the business – in each region and as a whole – relative to the
circumstances presented to the business as the year unfolded. This decision and approach is discussed further in section 2.4.
• Ramsay Australia EBIT was -28.2% and -$188.0m below FY2021. The business experienced significant lockdowns, isolation
orders and surgical restrictions in the first nine months of the year, as well as significant increased costs throughout the year
of operating in a COVID environment. The financial impact of these disruptions in FY22 was estimated to be around $276m
for Ramsay Australia. The business responded well to the challenging environment with the performance solid relative to the
headwinds experienced.
• Ramsay Santé EBIT was 15.4% and €38.9m up on FY2021. The favourable result is primarily a reflection of Ramsay Santé’s
significant participation with the governments in responding to COVID-19. Ramsay Santé performed well given the opportunities
and challenges presented in the environment.
• Ramsay UK EBIT, excluding Elysium, was -151.2% and -£77.7 m below FY2021. Ramsay UK reflects lower volumes and increased
costs due to the impact of COVID-19 particularly cancellations arising from COVID-19 outbreaks. The business could have
responded more completely to cost pressures given the challenges experienced during FY22.
• Growth investment:
– the acquisition of $1.471B Elysium Healthcare was completed, building on Ramsay’s strong position in mental health and acute
growth and delivering opportunities for organic and inorganic growth in the UK market
– Ramsay Santé acquired a network of 24 specialist clinics in Sweden, to complement Ramsay’s hospitals and primary care
centres across the Nordic region with a total investment of A$60M and deferred consideration of A$68.2M
– $408.5M of capacity expansion projects, including digital and data investment, was completed by June 2022. Investment in
Brownfield expansion and reconfiguration of existing facilities remains a focus.
• Achievement of agreed 2022 milestones progressing the 2030 strategy.
• Greenhouse gas intensity reduction target of 2% from the prior year was achieved.
• No workplace fatalities and achievement of top quartile LTIFR performance.
• Achievement of target gender composition in senior management of 40:40:20 with 46% female and 54% male.
• Progress in respect of executive leadership development and capability, with a further 48 executives successfully completing
Executive Leadership – The Ramsay Way.
• Implementation of 2021 One Employee One Voice group-wide survey completed with improvement in employee engagement
being partially met during FY22 with improved employee engagement in 6 of 8 countries.
• Net Promotor Score (NPS)
10%
• The Group met target NPS in some but not all regions in FY22.
Quality
• Hospital accreditation
• Never events
• Infection rates
• Unplanned readmissions
• Unplanned return to theatre
10%
• All regions achieved 100% of hospital accreditations.
• Exceeded external national benchmarks and industry standards for Never Events, hospital acquired staphylococcus auereus
bacteraemia (per 10,000 bed days), rate of unplanned readmissions within 28 days (per separation) and rate of unplanned return to
theatre per procedure.
Application of “The Ramsay Way” performance modifier (0 – 100%) – no adjustments applied
Final FY22 CEO / MD STI outcome – 68% of maximum
Exceeded
Met
Partially met
Not met
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3.3 LTI outcomes
FY20 LTI
Overview
The FY20 grant for the MD & CEO ( with a performance condiition from 1 July 2019 to 30 July 2021) was tested at the end of FY22. As detailed
below, there was no vesting in respect of this grant reflecting that there was no vesting in respect of the relative TSR component or the
EPS component.
Refer to section 3.5 of the FY20 Remuneration Report for full detail of the terms attaching to the FY20 LTI awards, which can be accessed on
the Group’s website at .
Performance
measure
Weighting
Actual level of performance
Relative TSR
50%
44.19 percentile
Aggregate EPS
50%
The Group’s EPS in FY20 was significantly below guidance due to
COVID-19. As a result of this and the legacy EPS hurdle, the Board
determined that the EPS performance rights did/ did not vest.
Vesting outcomes under
FY19 LTI
0% of relative
TSR component
0% of aggregate
EPS component
0% overall vesting
Relative TSR performance condition
The vesting schedule in respect of the relative TSR component of the FY20 LTI performance rights is set out below. Relative TSR performance
is assessed against the S&P/ASX100 index (excluding companies in real estate, financial and resources industries). The Group achieved a
relative TSR ranking of 44.19 percentile, resulting into 0% vesting of this portion of the award.
Level of performance
Below 50th percentile
50th percentile
50th and 75th percentile
Above 75th percentile
Actual relative TSR achieved: 44.19 percentile
Vesting outcomes
Nil
50% vesting
Vesting on a straight-line basis between 50% and 100% vesting
100% percentile vesting
Level of vesting: 0%
The 3-year relative TSR1 performance over the last five years is detailed below:
TSR Percentile Ranking1
60%
40%
20%
0%
FY18
FY19
FY20
FY21
FY22
1 TSR percentile ranking is calculated with reference to the S&P / ASX200 index (excluding companies in real estate, finance and resources) for the FY17 and the S&P / ASX100 Index (with
the same exclusions) for the other financial years.
EPS performance condition
As outlined in the FY21 Remuneration Report, the measurement of EPS will be based on a 3-year growth range against threshold and stretch
performance hurdles to align more closely with market practice.
However, the FY20 performance rights that were subject to the EPS performance hurdle were measured by comparing Ramsay’s aggregate
EPS over 3 years against an aggregate EPS target calculated based on Ramsay’s market guidance for EPS disclosed at the start of each
financial year. The annual EPS targets were then aggregated to provide the threshold and maximum 3-year targets for vesting of performance
rights. These performance rights were subject to the vesting scale on a “step” basis as set out below.
The Group’s EPS in FY20 was significantly below guidance due to COVID. As a result of this and the legacy EPS hurdle, the Board determined
that the performance rights assessed against EPS would not vest.
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Level of performance
EPS well short of the market guidance
EPS just below the lower end of market guidance
Lower end of market guidance is achieved
Mid-point of market guidance is achieved
Upper end of market guidance is achieved
Well above the upper end of market guidance achieved
No additional rights will vest for EPS performance between the above specified points.
Level of vesting
0%
25%
50%
75%
90%
100%
The table below shows EPS performance relative to market guidance in the first 2 years of the performance period and the final nil vesting
outcome in respect of the EPS component of the FY20 LTI. No market guidance was provided in FY21 and FY22 but the Board determined nil
vesting was appropriate having regard to the FY20 outcome and the overall EPS over the performance period
<1% below guidance
Lower end of guidance
Middle of guidance
Upper end of guidance
>1% above guidance
Actual EPS Achieved & Vesting Outcome
The EPS performance for the last 5 years is detailed in the graph below:
EPS (cents/share)
FY20
-6% to 4% (cps)
261.5
264.2
267.0
269.8
272.5
155.9
% of Performance Rights
to vest
25
50
75
90
100
0
300
250
200
150
100
50
0
FY18
FY19
FY20
FY21
FY22
One-off awards
In joining Ramsay, the Group CFO Martyn Roberts forfeited significant unvested equity from his prior role. In recognition of this, the Group CFO
was provided with performance rights in FY20 equivalent to $1M that vest subject to meeting individual performance requirements and service
conditions over the 3 years from his employment anniversary. The vesting of the performance rights is weighted to the longer-term with vesting
in tranches of 20%, 30% and 50% over 3 years. The second tranche vested in FY22.
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3.4 Five year Group performance correlated to variable reward outcomes
The graph and table below summarises STI and LTI outcomes over the past 5 years together with share price, dividend and NPAT performance
demonstrating the alignment of at-risk reward outcomes and shareholder outcomes.
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
300cps
200cps
100cps
0cps
FY18
FY19
FY20
FY21
FY22
STI
LTI
Dividend
EPS
CEO STI outcomes (% of maximum)1
CEO LTI outcomes (% of maximum)2
Closing share price at end of period ($)
Dividends per Ordinary Shares (cents)
NPAT ($M)
FY18
70
45
$53.983
$1.4400
$388.30
FY19
90
37
$72.24
$1.5150
$545.50
FY20
-
-
$66.52
$0.6250
$284.00
FY21
88
-
$62.95
$1.5150
$449.00
FY22
68
-
$73.24
$0.9700
$274.0
1 CEO STI outcomes are presented on an award basis. Commencing FY21, CEO STI awards are paid 50% in cash and the remaining 50% deferred via restricted shares.
2 CEO LTI outcomes are presented on a vested basis. For example, nil CEO LTI outcomes in FY20, FY21 and FY22 mean there is no vesting of LTI performance rights for these years.
3 The opening price at the start of FY18 was $73.70
3.5 Actual remuneration table (Executive KMP)
The table below provides a summary of the actual take-home pay received by Executive KMP during FY22. Unlike the statutory remuneration
tables in section 3.6 below, the below table has not been prepared in accordance with the requirements of the Australian Accounting Standards
and is unaudited. It is included on a voluntary basis to show what Executive KMP actually received in FY22, and amounts that are paid or vested
to executives in FY22 (with FY21 for comparison).
Name
C.R. McNally
M.J. Roberts3
Financial Year
FY22
FY21
FY22
FY21
FAR1
$ 2,150,170
$ 2,131,330
$ 1,200,000
$ 1,200,000
Other
payments
-
-
$ 299,995
$ 207,403
STI Awarded2
$ 1,773,015
$ 2,294,490
$ 510,000
$ 642,000
LTI Vested
-
-
-
-
Total Actual
Remuneration
$ 3,923,185
$ 4,425,820
$ 2,009,995
$ 2,049,403
1 FAR includes cash salary, superannuation and non-monetary benefits such as private health insurance cover and motor vehicle running costs.
2 STI represents the amount awarded for FY22 and FY21 noting that 50% is deferred into equity for 3 years for the CEO, and 1 and 2 years for the CFO.
3 As noted above in section 3.3(b), in joining Ramsay, the Group CFO Martyn Roberts forfeited unvested equity from his prior role. In recognition of this, the Group CFO was provided with
performance rights equivalent to $1M that vest subject to meeting individual performance requirements and service conditions over the 3 years from his employment anniversary. On
20 April 2021, 20% or 3,074 of the Rights vested, with a vesting date value of $207,403. On 20 April 2022, 30% of the Rights or 4,611 of the Rights vested with a vesting date value of
$299,955 which is shown in the “Other payments” column.
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3.6 Statutory remuneration table (Executive KMP)
Details of each of the Executive KMP’s remuneration for FY22 (calculated in accordance with the applicable Accounting Standards) are set out below. All values are in Australian Dollars ($) unless
otherwise stated.
Fixed remuneration
Short-term benefits
Long-term Benefits
Financial
Year
FY’22
FY’21
FY’22
FY’21
FY’22
Cash Salary &
Fees ($)
2,085,900
2,085,209
1,176,432
1,178,306
-
Superannuation
($)
23,568
21,694
23,568
21,694
-
Non-
Monetary
Benefits($)1
40,702
24,427
-
-
-
Long
Service
Leave
Accrued STI
886,508
1,147,245
255,000
321,000
-
Entitlements Deferred STI2
508,437
286,810
239,989
133,739
-
35,145
34,347
19,559
19,625
-
2,107,511
1,456,965
827,897
714,875
-
LTI Share
Based Rights
($)3
Accrued
Termination /
Retirement
Benefits
FY’21
234,749
5,423
-
120,000
9,296
-
226,180
FY’22
3,262,332
47,136
40,702
1,141,508
54,704
748,426
2,935,408
FY’21
3,498,264
48,811
24,427
1,588,245
63,268
420,549
2,398,020
Share
Based
Payments
as % of
Total
Remuneration
46%
34%
42%
36%
-
38%
45%
35%
Total
Performance
Related
Remuneration
62%
57%
52%
49%
-
58%
59%
55%
Total
Remuneration
$
5,687,771
5,056,697
2,542,445
2,389,239
-
595,648
8,230,216
8,041,584
-
-
-
-
-
-
Name
C.R.
McNally4
M.J.
Roberts5
D.A.
Sims
(former)6
Total
(FY’22)
Total
(FY’21)
This figure represents non-monetary benefits such as health insurance cover and motor vehicle running costs that do not form part of the Executive KMP’s cash salary.
1
2 The minimum value of the Deferred STI award is nil. The maximum possible value will be determined by multiplying the number of restricted shares granted by the share price of Ramsay shares at the relevant vesting date.
3 In accordance with the requirements of the Accounting Standards, the remuneration includes a proportion of the fair value of the performance rights awarded under the LTI program granted or outstanding during the year. The fair value is determined as at the
grant date and is progressively allocated over the vesting period. The amount included as remuneration is not related to or indicative of the benefit (if any) that Executives may ultimately realise should the equity instruments vest. The fair value of the performance
rights at the date of their grant has been determined in accordance with AASB 2 applying the Black-Scholes and Monte Carlo Simulation models. The assumption underpinning these valuations are set out in note 18 to the financial statements.
4 Subsequent to the issue of the FY21 Remuneration Report, a continued service condition was identified in Mr. McNally's deferred STI award that impacts the manner by which the deferred STI is presented. The original disclosure expensed the entire deferred STI at
grant. As shares are forfeited if the CEO ceases employment during the deferral period, the deferred STI expense must be amortised over the service period. The previous deferred STI expense in FY21 remuneration report of $1,147,245 was overstated and this is
restated to $286,810 to reflect the service condition. Mr. McNally's LTI share based rights have also been restated to account for a corrective grant made on the 15 Nov 2019. The previous LTI share based rights in the FY21 remuneration report was $1,449,628. This
has now been restated to $1,456,965 on account of corrective grant.
5 In joining Ramsay on 20 April 2020, the Group CFO Martyn Roberts forfeited unvested equity from his prior role. In recognition of this, the Group CFO was provided with performance rights equivalent to $1M that vest subject to meeting individual performance
requirements and service conditions over the 3 years from his employment anniversary. Subject to satisfaction of continuing employment and performance conditions, vesting is staggered over the 3 years as follows: 20% of the Rights or 3,074 vested on 20-Apr-21,
30% of the Rights or 4,611 vested on 20-Apr-22, and 50% of the rights or 7,687 to vest on 20-Apr-23. The FY22 cost attributable to these rights is included within LTI Share Based Rights in the line with the Australian Accounting Standards.
Subsequent to the issue of the FY21 Remuneration Report, a continued service condition was identified in Mr. Robert 's deferred STI award that impacts the manner by which the deferred STI is presented. The original disclosure expensed the entire deferred STI
at grant. As shares are forfeited as a result of cessation of employment, the deferred STI expense must be amortised over the service period. The previous deferred STI expense in FY21 remuneration report of $321,000 was overstated and this is now amended to
$133,739 reflective of service condition. Mr. Robert's LTI share based rights have been restated to reflect the TSR component. The previous LTI share based rights in the FY21 remuneration report was $877,493. This has now been restated to $714,875.
6 Mr Sims ceased as Executive KMP on 30 September 2020,. The FY21 remuneration details included within the table above reflect amounts paid to Mr Sims during his service as a member of the the Executive KMP only.
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4 Non-Executive Director Remuneration
4.1 Remuneration policy & arrangements
The Board sets the fees for its NEDs in line with the key objectives of the Group’s NED remuneration policy set out below. NEDs fees are
reviewed annually and are set at a level that is sufficient to attract and retain high calibre NEDs with skills and experience required to oversee a
business of Ramsay’s size and complexity.
Market competitive to secure and retain
talented, qualified NEDs
The Board’s policy is to remunerate NEDs
at market-competitive rates to attract and
retain NEDs of the highest calibre and
requisite expertise having regard to:
• market data,
• the size, complexity and international
spread of the Group’s operations and
• the workload and time commitment
of NEDs.
Preserving and safeguarding
independence and impartiality
NED remuneration consists of base
fees, and additional fees for the
Chair and members of any Board
Committee (with the exception of the
Nomination Committee).
No element of NED remuneration is
“at-risk” (i.e. NEDs are not entitled to
any performance-related remuneration)
to preserve their independence
and impartiality.
Aligning NEDs and security
holder interests
NEDs are encouraged to hold securities
in the Group to create alignment between
the interests of NEDs and shareholders.
To create alignment between the interests
of NEDs and shareholders, all NEDs
are subject to a minimum shareholding
requirement equal to 100% of their annual
base fee. This requirement must be
satisfied within 5 years of appointment for
newly appointed NEDs. Refer section 2.7.
4.2 Fees & other benefits
a.) Aggregate fee pool
The current annual aggregate fee pool for NEDs is capped at $3,500,000 (including statutory superannuation contributions), as approved by
shareholders at the AGM held on 12 November 2014. No change is proposed to the fee pool.
b.) FY22 fee structure
The table below outlines the revised FY22 fee schedule for NEDs. FY22 marks the fifth consecutive year that NED fees have not been
increased. All fees shown in the table below are exclusive of superannuation.
The Board also undertook a review of NED fees in FY22, having regard to market data provided by independent remuneration consultants
to ensure Ramsay’s fee structure continues to be market competitive. The Board determined that there would be no increases to NED fees
in FY23, with the exception of fees payable to the People & Remuneration Committee which will be increased to be equivalent to the Risk
Management Committee (i.e. $50,000 and $25,000 for the Chair and members respectively) reflecting the workload of this Committee and
market benchmarks. Further detail will be provided in the FY23 Remuneration Report.
Position
Board
Audit Committee
Risk Management Committee
People & Remuneration Committee
Nomination Committee
Chair (ex. superannuation)
Chair: $659,900
Deputy Chair: $271,674
$56,000
$50,000
$41,000
Member fee (ex. superannuation)
$227,200
$28,000
$25,000
$21,000
No fee provided for this committee
Reflecting the travel burden imposed on Ramsay’s internationally based NEDs and in line with market practice amongst other global
organisations, overseas NEDs are eligible to receive a travel allowance equivalent to $10,000 per meeting for travel in excess of nine hours for
attendance at Board meetings.
At present, the only NED eligible for this allowance is Claudia Süssmuth Dyckerhoff. No travel allowances were paid in FY22.
c.) Prescribed benefits
NEDs appointed prior to October 2003 (being, Michael S Siddle & Peter J Evans) remain entitled to retirement benefits under the, now frozen,
Directors’ Retirement Benefits Plan. Under the plan, retirement benefits previously accrued on a pro-rata basis over a period of nine years,
commence after a minimum service period of three years.
Entitlements are indexed in line with the one-year Commonwealth Government Bond Rate and are adjusted twice a year. No adjustments are
made based on increases in NED fees or years of service. The indexation of retirement benefits occurs simply to preserve the real value of
existing entitlements and not to enhance any NED’s remuneration, and as such, is not counted towards the aggregate fee pool.
The value of the frozen benefits as at 30 June 2022, to which participating NEDs are entitled upon retirement are set out below:
Total Frozen Benefit
31 Dec 09 ($)
2,879,813
Total Provision
30 June 2021 ($)
1,245,764
Benefits paid in
FY22 ($)
695,332
Total Bond Rate
Adjustment ($)
1,094
Total Provision
30 June 2022 ($)
551,526
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4.3 Statutory remuneration table (NEDs)
The fees paid or payable to the NEDs of the Group in respect of FY22 are set out in the table below.
All values are in Australian dollars ($) unless otherwise stated.
Fixed remuneration
Short-term benefits
Long-term Benefits
Name
M.S. Siddle
(Chairman)
C.A. Deans
(NED)
J.M. McMurdo
(NED)
K.L.C. Penrose
(NED)
C.R. Süssmuth
Dyckerhoff
(NED)
D.I. Thodey
(NED)
S.A. Sargent3
(NED)
Former
P.J. Evans
(Former Deputy
Chair)4
Total (FY22)
Total (FY21)
Financial
Year
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
Cash Salary
& Fees ($)
638,206
638,206
261,375
261,375
248,408
248,408
320,415
301,359
245,294
245,294
268,124
240,875
141,388
-
141,211
351,695
2,264,421
2,287,212
Superannuation
($)
23,568
21,694
23,568
21,694
23,568
21,694
23,568
21,694
23,568
21,694
23,568
21,694
14,322
-
14,121
21,694
169,851
151,858
Non-
Monetary
Benefits
($)1
Long
Service
Leave
Entitlements
Accrued
STI
LTI
Share
Based
Rights
($)
Accrued
Termination /
Retirement
Benefits2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,094
737
-
-
-
-
-
-
-
-
-
-
-
-
-
931
1,094
1,668
Deferred
STI
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
Remuneration $
662,868
660,637
284,943
283,069
271,976
270,102
343,983
323,053
268,862
Share Based
Payments as %
of Total
Remuneration
-
-
-
-
-
-
-
-
-
Total
Performance
Related
Remuneration
-
-
-
-
-
-
-
-
-
266,988
291,692
262,569
155,710
-
155,332
374,320
2,435,366
2,440,738
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 This figure represents non-monetary benefits such as health insurance cover and motor vehicle running costs that do not form part of the KMP’s cash salary.
2 With respect to NEDs, this constitutes amounts provided for by Ramsay during the financial year in relation to the contractual retirement benefits which the NED will be entitled to upon retirement from office. These amounts represent the bond rate adjustment for
the year as set out in section 4.2(c) above.
3 Mr Sargent was appointed as a NED with effect from 25 November 2021. His FY22 remuneration details included within the table above reflect amounts paid to Mr Sargent during his service period as a NED.
4 Mr Evans retired as a NED with effect from 24 November 2021. His FY22 remuneration details included within the table above reflect amounts paid to Mr Evans during his service period as a NED only.
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5 Remuneration Governance
5.1 Remuneration governance framework
Overview
As summarised below, the Board oversees the Ramsay people strategy, both directly and through the People & Remuneration Committee. The
People & Remuneration Committee seeks input from the MD & CEO and the Group Chief People Officer, who attend Committee meetings,
except where matters relating to their own remuneration are considered.
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Interaction between risk & remuneration
Our remuneration framework has been structured to encourage long-term sustainable decision making from all of our leaders, ensuring that
the interests of the Group’s shareholders and broader stakeholder groups (i.e. customers, employees, community etc) are at the heart of all
decisions. It is important that the Group’s remuneration framework encourages the sound management of both financial and non-financial risks
and mitigates against excessive risk taking or short-term oriented behaviours by executives.
This is achieved under the executive remuneration framework in a number of ways:
• Structure: under the executive remuneration framework, a portion of the STI is deferred into equity (vesting over 1 to 2 years, or 3 years
depending on role) and the LTI is delivered in performance rights which are performance-tested over 3 years. Both of these mechanisms
encourage alignment between executives and the Group’s shareholders, as the value of these awards to participants fluctuates with the
Group’s share price;
• Board discretion: the Board, in conjunction with the People & Remuneration Committee, has the ability to exercise discretion to ensure the
quantum of executive remuneration is appropriate considering individual and Group performance (which extends to reductions in STI and LTI
vesting outcomes, including to zero, for adverse risk outcomes). STI awards are also subject to The Ramsay Way “People Caring for People”
performance modifier;
• Minimum shareholding requirements: as noted in section 2.7 above, a minimum shareholding requirement was introduced in FY20 for
executives and NEDs which requires the accumulation of Group shares over 5 years. This requirement encourages alignment between the
interests of the Group’s shareholders, and executives and NEDs;
• Malus & clawback provisions: incentives are subject to malus and clawback provisions which provide the Board with the ability to reduce
and/or withhold any variable remuneration awards that have been awarded but remain unvested or unpaid, as well as recoup amounts that
have previously been paid. These provisions are described in section 2.6; and
• Remuneration governance: in determining final variable remuneration outcomes each year, the People & Remuneration Committee will
consult with the Risk Management Committee and Group Chief Risk Officer to ensure that the financial and non-financial risk considerations
are taken into account.
5.2 Use of remuneration consultants
In accordance with its Charter, the People & Remuneration Committee can engage with remuneration consultants, according to
specific guidelines.
Ramsay did not receive any “remuneration recommendations” as defined under the Corporations Act 2001 (Cth) in FY22.
5.3 Details of Executive Service Agreements
The MD & CEO and Group CFO have written service contracts. The below details the key terms of these agreements.
Term
Duration
Termination by employee
Further detail
• Ongoing
• 6 months’ notice. The Group may elect to make a payment in lieu of notice.
• Employee may terminate the employment agreement without notice if a fundamental change occurs
in his role or responsibilities.
Termination by Group
Restraint Period
• 12 months’ notice (MD & CEO) or 6 months’ (Group CFO) or payment in lieu of notice.
• Ramsay may summarily terminate employment without notice in certain circumstances.
• 12 month restraint provision applies.
5.4 Security Trading Policy
All Ramsay NEDs and employees are subject to the Group’s Securities Trading Policy, a copy of which is available on our website at
ramsayhealth.com/Sustainability/Governance.
This policy prohibits:
• the dealing (or procurement of another person to deal) with Ramsay’s securities or the securities of another company where they are in
possession of inside information;
• dealing with Ramsay securities during blackout periods;
• short-term dealing (e.g. buying and selling securities within a 12-month period or entering into forward contracts); and
• hedging Ramsay securities.
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6 Further information
6.1 Executive KMP and NED share ownership
The table below outlines the holdings and movements during FY22 in the equity of Ramsay by each KMP, including their related parties. No shares were held nominally by any KMP or their
related parties.
Non-Executive Directors
M.S. Siddle
C. A. Deans
J. M. McMurdo
K.L.C. Penrose
C.R. Süssmuth Dyckerhoff
D.I. Thodey
S.A. Sargent2
Former
P.J. Evans3
Executive KMP
C.R. McNally
M.J. Roberts
Held at 1 July 2021
Ord.
Shares
CARES
Received as
Deferred STI
Received on Vesting
of LTI
Received as
Other Remuneration
Ord.
Shares
CARES
Ord.
Shares
CARES
Ord.
Shares
CARES
Other Net Change
Purchase / Sale
Ord.
Shares
CARES
Held at 30 June 2022
Ord.
Shares
CARES
3,905,919
5,705
4,964
957
3,705
11,071
-
11,099
351,707
3,265
-
1,402
-
-
-
700
-
-
-
-
-
-
-
-
-
-
-
-
17,2884
4,8375
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5801
-
-
-
-
-
4,6116
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,402
700
-
-
-
-
-
-
-
-
-
-
3,905,919
5,705
4,964
1,537
3,705
11,071
-
11,099
368,995
12,713
1 Ms. Karen Penrose received 580 share rights, as part of the NED's Salary Sacrifice Plan, on Sept'21. The 580 share rights converted to ordinary shares on Mar'22. As approved at the 2020 AGM, the Group provides NEDs with the opportunity to salary sacrifice a
portion of their fees as share rights, should they choose to do so.
2 Mr. Sargent was appointed as a NED with effect from 25 November 2021.
3 Mr Evans ceased as NED on 24 November 2021.
4 Mr. Craig McNally received 17,288 of ordinary shares on Nov'21 as part of his his FY21 deferred STI restricted for 3 years, subject to continued employment.
5 Mr. Martyn Roberts received 4,837 of ordinary shares on 'Nov'21 in respect to his FY21 deferred STI. The deferral period is 2 years with 50% of the deferred equity being released after the first year and the second 50% released at the end of the subsequent year,
subject to continued employment at the vesting date.
6 In joining Ramsay on 20 April 2020, the Group CFO Martyn Roberts forfeited unvested equity from his prior role. In recognition of this, the Group CFO was provided with performance rights equivalent to $1M that vest subject to meeting individual performance
requirements and service conditions over the 3 years from his employment anniversary. Subject to satisfaction of continuing employment and performance conditions, vesting is staggered over the 3 years as follows: 20% of the Rights or 3,074 vested on 20-Apr-21,
30% of the Rights or 4,611 vested on 20-Apr-22, and 50% of the rights or 7,687to vest on 20-Apr-23.
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6.2 Movement in securities
The below table shows the movements (during FY22 and up to the date of this Report) in equity settled performance rights granted as remuneration to Executive KMP.
Executive KMP
C.R. McNally
M.J. Roberts
Instrument
Date of Grant
Number of
Rights Granted1
Vesting Date2
Equity settled
performance
rights
Equity settled
performance
rights
17-Nov-17
15-Nov-18
17-Nov-19
15-Dec-20
15-Dec-21
20-Apr-20
15-Dec-20
15-Dec-21
23,979
66,346
50,483
55,563
57,690
15,372
16,439
17,068
31-Aug-21
31-Aug-21
31-Aug-22
31-Aug-23
31-Aug-24
Staggered9
31-Aug-23
31-Aug-24
Number of
Rights Vested/
Exercised3
Value of Rights
Vested /
Exercised4
Number of
Rights
Forfeited /
Lapsed
Value of Rights
Forfeited /
Lapsed5
-
-
-
4,611
-
-
-
-
299,955
-
23,9796
66,3467
50,4838
-
-
-
1,629,138
4,507,561
3,540,368
-
-
-
-
-
1 The implied maximum possible total value of the equity awards allocated during FY'22 and yet to vest can be determined by multiplying the number of Performance Rights granted by the current share price of Ramsay shares. The minimum possible total value
of LTI awards is nil. The weighted average fair value per FY'22 Performance Right at the grant date was $27.45 for the TSR performance hurdle and $59.45 for the EPS performance hurdle. The performance criteria applicable to prior year grants are disclosed in
prior Remuneration Reports.
2 This vesting date is an indicative date only. Vesting of Performance Rights will occur once the Board has determined the extent to which the applicable performance hurdles have been met. Vesting will only occur after the announcement of the release of Ramsay’s
Full Year results for the previous financial year.
3 On the vesting of each Performance Right, the holder receives one fully-paid ordinary share in Ramsay, subject to disposal and other dealing restrictions, if held in the trust, or, at the Board's discretion, an equivalent cash payment.
4 The value of vested Performance Rights is based on Ramsay’s 5-day VWAP on the date of vesting (as there is no exercise price payable in respect of Performance Rights).
5 The value of unvested Performance Rights is calculated using the relevant Ramsay 5-day VWAP at the date of lapsing.
6 The FY18 LTIs subject to to the TSR performance condition failed to achieve the required performance threshhold on re-testing and therefore lapsed on 31 August 2021.
7 All FY19 Performance Rights subject to Core EPS performance condition and to the TSR performance condition did not achieve the relevant threshholds required for vesting and therefore lapsed August 2021.
8 The FY20 LTIs subject to the TSR and EPS performance conditions did not achieve the relevant thresholds’ required for vesting and therefore lapsed on 31 August 2022.
9 In joining Ramsay, the Group CFO Martyn Roberts forfeited unvested equity from his prior role. In recognition of this, the Group CFO was provided with performance rights equivalent to $1M that vest subject to meeting individual performance requirements and
service conditions over the 3 years from his employment anniversary. Subject to satisfaction of continuing employment and performance conditions, vesting is staggered over the 3 years as follows: 20% of the Rights or 3,074 vested on 20-Apr-21, 30% of the Rights
or 4,611 vested on 20-Apr-22, and 50% of the rights or 7,687 to vest on 20-Apr-23.
63
Annual Report 2022
9. Remuneration Report – Audited
Ramsay Health Care Limited
The movement during FY22 in the number of rights over ordinary shares in Ramsay held, directly or indirectly or beneficially, by each KMP, including their related parties is as follows.
Non-Executive Directors
M.S. Siddle
C.A. Deans
J.M. McMurdo
K.L.C. Penrose
C.R. Süssmuth Dyckerhoff
D.I. Thodey
S.A. Sargent1
Former
P.J. Evans (former)2
Executive KMP
C.R. McNally
M.J. Roberts
Equity Settled
Performance Rights /
Share Rights
Rights held at
1 July 2021
Number of
Rights Granted
Number of
Rights Vested /
Exercised
Number of
Rights
Forfeited /
Lapsed
Rights held at
30 June 2022
Number of
Rights Vested /
Exercised Post
30 June 2022
Share Rights
Share Rights
Share Rights
Share Rights
Share Rights
Share Rights
Share Rights
Share Rights
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Performance Rights
Performance Rights
196,371
28,737
57,6903
17,068
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,611
90,325
-
163,736
41,194
-
-
-
-
-
-
-
-
-
-
1 Mr Sargent was appointed as a NED with effect from 25 November 2021.
2 Mr Evans ceased as a NED on 24 November 2021.
3 Shareholder approval for the grant of Performance Rights to the CEO was obtained under ASX Listing Rule 10.14 at the 2021 Annual General Meeting.
6.3 Other transactions and balances with Executive KMP
Loans to Executive KMP
No Executive KMP or their related parties held any loans with the Group during the Reporting Period.
Other Executive KMP transactions
The Group did not engage in any transactions with Executive KMP or their related parties during the Reporting Period.
64
Annual Report 2022
10.
Directors’ Report
The Directors present the Directors’ Report for the year ended 30 June 2022 for the
consolidated entity consisting of Ramsay Health Care Limited (Ramsay or the Company)
and its controlled entities (together, the Group).
The information referred to in the table below is incorporated into, and forms part of, this Directors’ Report:
Item Description
1.
2.
3.
Key Risks
Operating and Financial Review
Remuneration Report
Directors’ roles, skills and qualifications and all directorships of other listed
companies held by each Director in the last 3 years
Company Secretary’s qualifications and experience
Number of Board and Committee meetings and Directors’ attendance
4.
5.
6.
Section / page number of this Annual Report
Section 5 on pages 14 to 16
Section 6 on pages 17 to 31
Section 9 on pages 43 to 64
Section 8 on pages 38 to 41
Section 8 on page 41
Section 8 on page 42
Directors’ relevant interests
Details of Director’s holdings in the share capital of the Company as at the date of this report are as follows:
Name
Alison Deans
James McMurdo
Craig McNally
Karen Penrose
Michael Siddle
Claudia Süssmuth Dyckerhoff
Steven Sargent
David Thodey
Ordinary shares
5,705
4,964
368,995
1,537
3,905,919
3,705
-
11,071
Convertible Adjustable Rate
Equity Securities (CARES)
1,402
-
-
-
-
-
-
Rights over Ordinary
Shares
-
-
113,253
-
-
-
-
700
-
Remuneration report
The Remuneration Report in Section 9 on pages 43 to 64 of this Annual Report is incorporated into, and forms part of, this Directors’ Report.
Operating and financial review
Information on the operations of the Group during the financial year, the results of those operations, the Group’s financial position and its
business strategies and prospects is set out in the Operating and Financial Review (OFR) in Section 6 on pages 17 to 31 of this Annual Report
and is incorporated into, and forms part of, this Directors’ Report.
Annual Report 2022
65
10. Directors’ Report
Ramsay Health Care Limited
Principal activities
During the year, the principal activity of the Group was to own and operate hospitals and health care services in approximately 530 locations
across Australia and globally. There were no significant changes in the nature of the Company’s activities during the year.
State of affairs
Other than as referred to in the OFR, there have been no significant changes in the Group’s state of affairs during the year.
Likely developments and expected results
Likely developments in the operations of the Group and the expected results of those operations are set out in the OFR in Section 6 on pages
17 to 31 of this Annual Report and is incorporated into, and forms part of, this Directors’ Report.
Matters subsequent to the end of the financial year
There have been no significant events after the reporting date that may significantly affect the Group’s operations in future years, the results of
these operations in future years or the Group’s state of affairs in future years.
Dividends
Dividends paid or recommended for payment on ordinary shares are as follows:
• Final dividend recommended @ 48.5 per share (2021: 103.0 cents). Total of $111.0 million (2021: $231.9 million).
• Interim dividend paid during the year @ 48.5 cents per share (2021: 48.5 cents). Total of $111.0 million (2021: $106.2 million).
Dividends paid or recommended for payment on CARES are as follows:
• October dividend recommended @ $2.06 per security (2021: $1.74). Total of $5.3 million (2021: $4.5 million).
• April dividend paid during the year @ $1.73 per security (2021: $1.73). Total of $4.5 million(2021: $4.5 million).
The tax rate at which dividends have been franked and recommended dividends will be franked is 30% (2021: 30%).
Environmental regulation
The Group holds licences from the Environment Protection Regulatory Bodies applicable to hospitals for the maintenance of a safe
environment. The Directors are not aware of any breaches of these licences.
Non-audit services
Ernst & Young received or are due to receive $483,809 for the provision of non-audit services. Refer to Note 22 for further information.
The Board is satisfied that the provision of non-audit services during the year by Ernst & Young is compatible with, and did not compromise, the
auditor independence requirements of the Corporations Act 2001 (Cth) for the following reasons:
1. all non-audit services provided by Ernst & Young were reviewed and approved to ensure they do not impact the integrity and objectivity of
the auditor; and
2. the nature and scope of each type of non-audit service provided means that auditor independence was not compromised.
66
Annual Report 2022
10. Directors’ Report
Ramsay Health Care Limited
Indemnification and insurance of directors and officers
The Company’s Constitution requires the Company to indemnify any person who is, or has been, an officer of the Company, including the
Directors and other executive officers, against the liabilities incurred while acting as such officers to the extent permitted by law.
In accordance with the Company’s Constitution, the Company has entered into a Deed of Indemnity, Insurance and Access with each of the
Company’s Directors and certain executives. No Ramsay Director or officer of the Company has received benefits under an indemnity from the
Company during or since the end of the financial year.
The Company agrees to pay a premium in respect of a contract insuring current and former directors and executives of the Company and its
subsidiaries against liability that they may incur as an officer of the Company or any of its subsidiaries, including liability for costs and expenses
incurred by them in defending civil or criminal proceedings involving them as such officers, with certain exceptions. It is a condition of the
insurance contract that no details of the premiums payable or the nature of the liabilities insured are disclosed.
Indemnification of auditor
As part of the Company’s terms of engagement with Ernst & Young, the Company has agreed to indemnify Ernst & Young to the extent
permitted by law and professional regulations, against any losses, liabilities, costs or expenses incurred by Ernst & Young where they arise out
of or occur in relation to any negligent, wrongful or wilful act or omission by Ramsay. No payment has been made to Ernst & Young by Ramsay
pursuant to this indemnity, either during or since the end of the financial year.
Proceedings on behalf of the Company
No application has been made under section 237 of the Corporations Act 2001 (Cth) in respect of the Company, and there are no proceedings
that a person has brought or intervened in on behalf of the Company under that section.
Rounding
The amounts contained in this report and in the financial report have been rounded off to the nearest hundred thousand unless otherwise
specified under the option available to the Company under ASIC Corporations (Rounding in Financial / Directors’ Reports) Instrument 2016/191.
The Company is an entity to which the Instrument applies.
Approval
Signed in accordance with a resolution of the Directors.
M.S. SIDDLE
Chairman
Sydney, 27 September 2022
C.R. McNALLY
Managing Director and Chief Executive Officer
Annual Report 2022
67
10. Directors’ Report
Ramsay Health Care Limited
68
Annual Report 2022
A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au Auditor’s Independence Declaration to the Directors of Ramsay Health Care Limited As lead auditor for the audit of the financial report of Ramsay Health Care Limited for the financial year ended 30 June 2022, I declare to the best of my knowledge and belief, there have been: a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit b) no contraventions of any applicable code of professional conduct in relation to the audit; and c) No non-audit services provided that contravene any applicable code of professional conduct in relation to the audit. This declaration is in respect of Ramsay Health Care Limited and the entities it controlled during the financial year. Ernst & Young Ryan Fisk Partner 27 September 2022 10. Directors’ Report
Ramsay Health Care Limited
Directors' declaration
In accordance with a resolution of the Directors of Ramsay Health Care Limited, we declare that:
In the opinion of the Directors:
a. the consolidated financial statements and notes of Ramsay Health Care Limited for the year ended 30 June 2022 are in accordance with the
Corporations Act 2001, including:
i. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2022 and of its performance for the year ended on
that date; and
ii. complying with Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001;
b. the consolidated financial statements and notes also comply with International Financial Reporting Standards as disclosed in the
Overview Note;
c. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable;
d. this declaration has been made after receiving the declarations required to be made to the Directors in accordance with section 295A of the
Corporations Act 2001 for the financial year ended 30 June 2022;
e. as at the date of this declaration, there are reasonable grounds to believe that the members of the Closed Group identified in Note 23 will be
able to meet any obligations or liabilities to which they are or may become subject, by virtue of the Deed of Cross Guarantee.
On behalf of the Board
M.S. SIDDLE
Chairman
Sydney, 27 September 2022
C.R. McNALLY
Managing Director and Chief Executive Officer
Annual Report 2022
69
11.
Financial Results
Contents
CONSOLIDATED INCOME STATEMENT
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
OVERVIEW
a
b
c
d
e
f
g
Basis of preparation
New and amended accounting standards and
interpretations, effective 1 July 2021
Accounting standards and interpretations issued or
amended but not yet effective
Basis of consolidation
Significant accounting judgements, estimates
and assumptions
Current versus non-current classification
Foreign currency translation
I RESULTS FOR THE YEAR
1
2
3
4
5
6
Segment information
Revenue and other income
Expenses
Dividends
Earnings per share
Net tangible assets
II CAPITAL – FINANCING
7
8
Equity
Net debt
70
Annual Report 2022
71
72
73
74
75
76
76
76
76
76
77
77
77
77
78
78
80
83
84
85
85
86
87
89
III ASSETS AND LIABILITIES – OPERATING AND INVESTING 98
9 Working capital
10 Business combinations
11
Property, plant and equipment
12 Right of use assets
13
14
15
Intangible assets
Impairment testing of goodwill
Taxes
16 Other assets/liabilities (net)
IV RISK MANAGEMENT
17
Financial risk management
V OTHER INFORMATION
18
Share based payment plans
19 Capital commitments and contingent liabilities
20 Subsequent events
21 Related party transactions
22 Auditors’ remuneration
23 Information relating to subsidiaries
24 Closed group
25 Parent entity information
26 Material partly–owned subsidiaries
98
101
105
107
108
111
112
115
121
121
125
125
127
127
128
129
130
133
135
135
Consolidated Income Statement
FOR THE YEAR ENDED 30 JUNE 2022
Revenue from contracts with customers
Interest income
Other income – income from government grants
Other income – income from sale of development assets
Other income – net profit on disposal of non-current assets
Total revenue and other income
Employee benefit and contractor costs
Occupancy costs
Service costs
Medical consumables and supplies
Depreciation, amortisation and impairment
Cost of development assets sold
Total expenses, excluding finance costs
Share of profit of joint venture
Profit before tax and finance costs
Finance costs
Profit before income tax
Income tax
Net profit after tax for the year
Attributable to non-controlling interests
Attributable to owners of the parent
11. Financial Results
Ramsay Health Care Limited
2022
$m
13,312.4
36.2
402.0
1.8
23.8
13,776.2
(7,731.8)
(577.7)
(506.6)
(3,107.8)
(938.9)
(1.4)
(12,864.2)
15.5
927.5
(389.0)
538.5
(159.3)
379.2
105.2
274.0
379.2
2021
$m
12,864.2
7.1
428.3
20.4
12.3
13,332.3
(7,258.7)
(558.9)
(447.8)
(3,008.7)
(920.9)
(8.5)
(12,203.5)
10.9
1,139.7
(398.1)
741.6
(230.1)
511.5
62.5
449.0
511.5
Note
2.a
2.c
2.b
2.c
2.c
3
3
16.b
3
15
Earnings per share (EPS) attributable to equity holders of the parent
Basic earnings per share (after CARES dividend)
Diluted earnings per share (after CARES dividend)
Cents
Cents
5
5
116.3
116.1
193.2
192.6
The above Consolidated Income Statement should be read in conjunction with the accompanying notes.
Annual Report 2022
71
11. Financial Results
Ramsay Health Care Limited
Consolidated Statement of Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2022
Net profit after tax for the year
Items that will not be reclassified to net profit
Actuarial gain/(loss) on defined employee benefit obligation
Items that may be subsequently reclassified to net profit
Cash flow hedges
Profit taken to equity
Transferred to Income Statement
Net change in cost of hedging
Net loss on bank loan designated as a hedge of a net investment
Foreign currency translation
Income tax (expense)/benefit relating to these items
Other comprehensive income/(loss), net of tax
Total comprehensive income
Attributable to non-controlling interests
Attributable to owners of the parent
2022
$m
2021
$m
379.2
511.5
85.6
(37.4)
15.8
18.2
-
-
(115.5)
(35.2)
(31.1)
348.1
103.3
244.8
348.1
17.1
1.6
3.1
(1.5)
(69.0)
6.1
(80.0)
431.5
44.6
386.9
431.5
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
72
Annual Report 2022
11. Financial Results
Ramsay Health Care Limited
Consolidated Statement of Financial Position
AS AT 30 JUNE 2022
Note
2022
$m
2021
$m
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative financial instruments
Income tax receivables
Prepayments
Other current assets
Total current assets
Non-current assets
Other financial assets
Investments in joint venture
Property, plant and equipment
Right of use assets
Intangible assets
Deferred tax assets
Prepayments
Derivative financial instruments
Other receivables
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other creditors
Loans and borrowings
Lease liabilities
Derivative financial instruments
Provisions
Income tax payables
Total current liabilities
Non-current liabilities
Loans and borrowings
Lease liabilities
Provisions
Defined employee benefit obligation
Derivative financial instruments
Other creditors
Deferred tax liabilities
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Treasury shares
Convertible Adjustable Rate Equity Securities (CARES)
Other reserves
Retained earnings
Parent interests
Non-controlling interests
TOTAL EQUITY
8.a
9.a
9.b
8.d
15
16.a
16.b
11
12
13
15
8.d
9.a
9.c
8.b
8.c
8.d
16.c
15
8.b
8.c
16.c
16.e
8.d
15
7.a
7.b
7.c
314.2
2,331.3
376.8
11.3
42.2
186.4
24.5
3,286.7
100.8
238.1
4,806.9
4,627.7
5,799.0
478.7
10.7
45.7
79.0
16,186.6
19,473.3
3,045.8
42.8
354.8
-
180.2
102.0
3,725.6
5,173.5
5,127.6
356.8
157.8
-
98.6
307.2
11,221.5
14,947.1
4,526.2
2,197.6
(72.4)
252.2
(152.6)
1,708.7
3,933.5
592.7
4,526.2
1,004.8
1,809.5
409.4
-
12.3
133.0
1,982.4
5,351.4
82.9
217.5
4,488.6
4,411.5
4,233.6
457.6
10.9
-
70.6
13,973.2
19,324.6
3,013.7
51.7
368.2
14.9
185.0
83.7
3,717.2
5,229.0
4,902.8
386.3
249.1
23.2
30.7
235.5
11,056.6
14,773.8
4,550.8
2,197.6
(76.7)
252.2
(91.3)
1,750.9
4,032.7
518.1
4,550.8
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
Annual Report 2022
73
11. Financial Results
Ramsay Health Care Limited
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2022
Attributable to Equity Holders of the Parent
Issued
Capital
(Note 7.a)
Treasury
Shares
(Note 7.b)
CARES
(Note 7.c)
Other
Reserves
Retained
Earnings
Non-
controlling
Interests
$m
2,197.6
-
-
-
-
-
$m
(76.7)
-
-
-
4.3
-
$m
252.2
-
-
-
-
-
$m
(91.3)
(64.9)
-
-
(4.3)
7.9
$m
1,750.9
309.7
(351.9)
-
-
-
$m
518.1
103.3
(19.1)
(9.6)
-
-
Total
$m
4,550.8
348.1
(371.0)
(9.6)
-
7.9
2,197.6
(72.4)
252.2
(152.6)
1,708.7
592.7
4,526.2
2,197.6
-
-
-
-
-
(78.2)
-
-
-
1.5
-
252.2
-
-
-
-
-
(51.0)
(47.4)
-
-
(1.5)
8.6
1,431.9
434.3
(115.3)
-
-
-
483.4
44.6
(9.8)
(0.1)
-
-
4,235.9
431.5
(125.1)
(0.1)
-
8.6
2,197.6
(76.7)
252.2
(91.3)
1,750.9
518.1
4,550.8
As at 1 July 2021
Total Comprehensive Income
Dividends paid
Acquisition of subsidiary/non
controlling interest
Treasury shares vesting to employees
Share based payment expense
for employees
As at 30 June 2022
As at 1 July 2020
Total Comprehensive Income
Dividends paid
Acquisition of subsidiary/non
controlling interest
Treasury shares vesting to employees
Share based payment expense
for employees
As at 30 June 2021
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
74
Annual Report 2022
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2022
Cash flows from operating activities
Receipts from customers
Receipts of government grants
Payments to suppliers and employees
Income tax paid
Lease finance costs
Other finance costs
Net cash flows from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment and intangible assets
Proceeds from sale of businesses and non-current assets
Interest and dividends received
Business combinations, net of cash received
Business combination consideration returned from/(held in) escrow
Acquisition of investments and purchase of non-controlling interests
Net cash flows from/(used in) investing activities
Cash flows from financing activities
Dividends paid to equity holders of the parent
Dividends paid to non-controlling interests
Repayment of lease principal
Payment of refinancing costs
Proceeds from borrowings
Repayment of borrowings
Net cash flows (used in)/from financing activities
Net decrease in cash and cash equivalents
Net foreign exchange differences on cash held
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
11. Financial Results
Ramsay Health Care Limited
Note
2022
$m
2021
$m
13,044.0
4.2
(11,728.0)
(229.3)
(242.2)
(133.2)
715.5
(708.5)
43.0
4.4
(1,228.5)
1,967.8
(48.2)
30.0
(351.9)
(19.1)
(387.8)
(2.1)
5,123.4
(5,773.4)
(1,410.9)
(665.4)
(25.2)
1,004.8
314.2
12,866.0
305.9
(11,095.0)
(228.2)
(234.2)
(133.3)
1,481.2
(628.9)
132.1
34.9
(90.1)
(1,951.5)
(0.7)
(2,504.2)
(115.3)
(9.8)
(334.0)
(26.8)
6,243.3
(5,173.4)
584.0
(439.0)
(59.9)
1,503.7
1,004.8
15
3
8.a
10
16.a
4
8.a
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Annual Report 2022
75
Notes to the Financial Statements
Overview
Ramsay Health Care Limited
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Overview
This section sets out the basis on which the Ramsay Group’s financial report is prepared as a whole. Where a significant
accounting policy is specific to a note, the policy is described within that note.
The consolidated financial report of Ramsay Health Care Limited
(the Group) for the year ended 30 June 2022 was authorised for
issue on 27 September 2022 in accordance with a resolution of
the Directors. Ramsay Health Care Limited is a for profit company
limited by shares incorporated in Australia whose shares are publicly
traded on the Australian Securities Exchange. The nature of the
operations and principal activities of the Group are described in the
Directors' Report.
a Basis of preparation
This general purpose financial report:
• has been prepared in accordance with Australian Accounting
Standards, other authoritative pronouncements of the Australian
Accounting Standard Board (AASB) and the Corporations
Act 2001;
• has been prepared on the basis of historical cost, except for
derivative financial instruments;
• complies with International Financial Reporting Standards as
issued by the International Accounting Standards Board;
• is presented in Australian Dollars;
• presents reclassified comparative information where necessary to
conform to changes in presentation in the current year;
• presents all values as rounded to the nearest hundred thousand
dollars, unless otherwise stated under the option available under
ASIC Corporations (Rounding in Financial / Directors’ Reports)
Instrument 2016/191.
b New and amended accounting
standards and interpretations,
effective 1 July 2021
The Group applied for the first-time certain standards and
amendments, which are effective for annual periods beginning on
or after 1 July 2021. The nature and effect of these changes are
disclosed below.
AASB 2020-8 Amendments to AASs – Interest Rate Benchmark
Reform – Phase 2: Amendments to AASB 4, AASB 7, AASB 9,
AASB 16 and AASB 139
The amendments provide temporary relief which address the
financial reporting effects when an interbank offered rate (IBOR) is
replaced with an alternative nearly risk-free interest rate (RFR).
The amendments include the following practical expedients:
• A practical expedient to require contractual changes, or changes
to cash flows that are directly required by the reform, to be treated
as changes to a floating interest rate, equivalent to a movement in
a market rate of interest;
• Permit changes required by IBOR reform to be made to hedge
designations and hedge documentation without the hedging
relationship being discontinued;
• Provide temporary relief to entities from having to meet the
separately identifiable requirement when an RFR instrument is
designated as a hedge of a risk component.
These amendments had no impact on the consolidated financial
statements of the Group. The Group intends to use the practical
expedients in future periods if they become applicable.
AASB 2021-3 Amendments to AASs – COVID-19 Related Rent
Concessions beyond 30 June 2021 – Amendments to AASB
16 Leases
The AASB amended the conditions of the practical expedient in
AASB 16 that provides relief to lessees from applying the AASB
16 guidance on lease modifications to rent concessions arising
as a direct consequence of the COVID pandemic. As a practical
expedient, a lessee may elect not to assess whether a COVID related
rent concession from a lessor is a lease modification. A lessee that
makes this election accounts for any change in lease payments
resulting from the COVID related rent concession the same way it
would account for the change under AASB 16, if the change were not
a lease modification.
Following the amendment, the practical expedient now applies to
rent concessions for which any reduction in lease payments affects
only payments originally due on or before 30 June 2022, provided
the other conditions for applying the practical expedient are met.
This amendment had no material impact on the consolidated
financial statements of the Group.
c Accounting standards and
interpretations issued or
amended but not yet effective
New and amended standards and interpretations issued by the
AASB that will apply for the first time in the next annual financial
statements are not expected to impact the Group as they are either
not relevant to the Group’s activities or require accounting which is
consistent with the Group’s current accounting policies. The Group
does not early adopt any Australian Accounting Standards and
Interpretations issued or amended but are not yet effective.
76
Annual Report 2022
d Basis of consolidation
The consolidated financial statements comprise the financial
statements of Ramsay Health Care Limited (the Company, or the
Parent Entity) and its subsidiaries (together, the Group, or the
consolidated entity) as at and for the period ended 30 June each
year. Control is achieved when the Group is exposed, or has rights,
to variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee.
When the Group has less than a majority of the voting or similar
rights of an investee, the Group considers all relevant facts
and circumstances in assessing whether it has power over an
investee, including:
• The contractual arrangement with the other vote holders of
the investee
• Rights arising from other contractual arrangements
• The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts
and circumstances indicate that there are changes to one or more of
the three elements of control. Consolidation of a subsidiary begins
when the Group obtains control over the subsidiary and ceases
when the Group loses control of the subsidiary. Assets, liabilities,
income and expenses of a subsidiary acquired or disposed of during
the year are included in the Consolidated Financial Statements from
the date the Group gains control until the date the Group ceases to
control the subsidiary.
Profit or loss and each component of Other Comprehensive Income
(OCI) are attributed to the equity holders of the parent of the
Group and to the non-controlling interests, even if this results
in the non-controlling interests having a deficit balance. When
necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies in line with the Group’s
accounting policies. All intra-group assets and liabilities, equity,
income, expenses and cash flows relating to transactions between
members of the Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss
of control, is accounted for as an equity transaction. If the Group
loses control over a subsidiary, it derecognises the related assets
(including goodwill), liabilities, non-controlling interests and other
components of equity while any resultant gain or loss is recognised
in profit or loss. Any investment retained is recognised at fair value.
e Significant accounting
judgements, estimates and
assumptions
In applying the Group’s accounting policies, management has made
a number of judgements, estimates and assumptions concerning
the future. The key judgements, estimates and assumptions that are
material to the financial statements relate to the following areas:
Note 2.b
Note 8.c
Note 10
Note 11
Note 13
Note 14
Note 15
Note 16.c
Note 16.e
Note 18
Other income – income from
government grants
Lease liabilities
Business combinations
Property, plant and equipment
Intangible assets
Impairment testing of goodwill
Taxes
Provisions
Defined employee benefit obligation
Share based payment plans
Page 82
Page 93
Page 101
Page 105
Page 108
Page 111
Page 112
Page 117
Page 119
Page 125
Notes to the Financial Statements
Overview
Ramsay Health Care Limited
f Current versus non-current
classification
The Group presents assets and liabilities in the Consolidated
Statement of Financial Position based on current/non-current
classification. An asset is current when it is:
• Expected to be realised or intended to be sold or consumed in the
normal operating cycle
• Expected to be realised within twelve months after the
reporting period
• Held primarily for trading, or
• Cash and cash equivalent unless restricted from being exchanged
or used to settle a liability for at least twelve months after the
reporting period.
All other assets are classified as non-current.
A liability is current when:
• It is expected to be settled in the normal operating cycle
• It is due to be settled within twelve months after the
reporting period
• Held primarily for trading, or
• There is no unconditional right to defer the settlement of the
liability for at least twelve months after the reporting period.
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets
and liabilities.
g Foreign currency translation
Both the functional and presentation currency of Ramsay Health Care
Limited and its Australian subsidiaries is Australian dollars (A$). Each
entity in the Group determines its own functional currency and items
included in the financial statements of each entity are measured
using that functional currency.
Transactions in foreign currencies are initially recorded in the
functional currency by applying the exchange rates ruling at the date
of the transaction. Monetary assets and liabilities denominated in
foreign currencies are retranslated at the rate of exchange ruling at
the reporting date.
Non-monetary items that are measured in terms of historical cost in
a foreign currency are translated using the exchange rate as at the
date of the initial transaction. Non-monetary items measured at fair
value in a foreign currency are translated using the exchange rates at
the date when the fair value was determined.
The functional currencies of the overseas subsidiaries are: British
pounds for the UK entities and Euro for the French entities. As at the
reporting date the assets and liabilities of the overseas subsidiaries
are translated into the presentation currency of Ramsay Health Care
Limited at the rate of exchange ruling at the reporting date and the
Income Statements are translated at the weighted average exchange
rates for the year. The exchange differences arising on the translation
are taken directly to a separate component of equity.
On disposal of a foreign entity, the deferred cumulative amount
recognised in equity relating to that particular foreign operation is
recognised in the Income Statement.
Annual Report 2022
77
Notes to the Financial Statements
Results for the Year
Ramsay Health Care Limited
I Results for the Year
This section provides additional information on the Group results for the year, including further detail on results by segment,
revenue, expenses, earnings per share and dividends.
1 Segment information
The Managing Director examines the Group’s performance and allocates resources from a geographic perspective and has
identified four different business units. The segment information discloses the financial performance and total assets and
liabilities of each operating business.
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Managing Director (the chief
operating decision maker) in assessing performance and in determining the allocation of resources.
The operating segments are identified by management based primarily on the country in which the service is provided, as this is the Group’s
major risk and has the most effect on the rate of return, due to differing currencies and differing health care systems in the respective countries.
The Group has four reportable operating segments being Asia Pacific, UK, France and Nordics.
Discrete financial information about each of these operating businesses is reported to the Managing Director on at least a monthly basis.
Types of services
The reportable operating segments derive their revenue primarily from providing health care services to both public and private patients in
the community.
Accounting policies and inter-segment transactions
Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties. Segment
revenue, segment expense and segment results include transfers between the segments. These transfers are eliminated on consolidation.
The accounting policies used by the Group in reporting segments are the same as those contained throughout the accounts and in
prior periods.
78
Annual Report 2022
Notes to the Financial Statements
Results for the Year
Ramsay Health Care Limited
1 Segment information (Continued)
Year ended 30 June 2022
Revenue from contracts with customers
Other income – income from government grants
Other income – income from sale of development assets
Other income – net profit on disposal of non-current assets
Total revenue and other income before intersegment revenue
Intersegment revenue
Total segment revenue and other income
Earnings before interest, tax, depreciation, amortisation and
rent (EBITDAR)1
Rent2
Earnings before interest, tax, depreciation and amortisation (EBITDA)3
Depreciation, amortisation and impairment
Earnings before interest and tax (EBIT)4
Net finance costs
Income tax expense
Profit after tax from continuing operations
Attributable to non-controlling interests
Net profit from continuing operations attributable to owners of
the parent
Year ended 30 June 2021
Revenue from contracts with customers
Other income – income from government grants
Other income – income from sale of development assets
Other income – net profit on disposal of non-current assets
Total revenue and other income before intersegment revenue
Intersegment revenue
Total segment revenue and other income
Earnings before interest, tax, depreciation, amortisation and
rent (EBITDAR)1
Rent2
Earnings before interest, tax, depreciation and amortisation (EBITDA)3
Depreciation, amortisation and impairment
Earnings before interest and tax (EBIT)4
Net finance costs
Income tax expense
Profit after tax from continuing operations
Attributable to non-controlling interests
Net profit from continuing operations attributable to owners of
the parent
Asia
Pacific
$m
5,343.7
-
1.8
8.6
5,354.1
7.1
5,361.2
UK
$m
France
$m
Nordics
$m
Total
$m
1,321.5
-
-
-
1,321.5
-
1,321.5
4,646.3
357.1
-
13.7
5,017.1
-
5,017.1
2,000.9
44.9
-
1.5
2,047.3
-
2,047.3
13,312.4
402.0
1.8
23.8
13,740.0
7.1
13,747.1
725.5
82.0
927.4
232.7
1,967.6
(11.9)
713.6
(246.3)
467.3
(1.9)
80.1
(106.3)
(26.2)
(101.0)
826.4
(448.2)
378.2
(22.6)
210.1
(138.1)
72.0
(137.4)
1,830.2
(938.9)
891.3
(352.8)
(159.3)
379.2
(105.2)
274.0
5,440.8
-
20.4
-
5,461.2
2.9
5,464.1
1,024.1
-
-
-
1,024.1
-
1,024.1
4,574.9
336.4
-
10.3
4,921.6
-
4,921.6
1,824.4
91.9
-
2.0
1,918.3
-
1,918.3
12,864.2
428.3
20.4
12.3
13,325.2
2.9
13,328.1
866.5
182.4
947.4
206.9
2,203.2
(11.4)
855.1
(219.1)
636.0
(1.2)
181.2
(88.4)
92.8
(117.5)
829.9
(472.7)
357.2
(19.6)
187.3
(140.7)
46.6
(149.7)
2,053.5
(920.9)
1,132.6
(391.0)
(230.1)
511.5
(62.5)
449.0
"EBITDAR" is a non-statutory profit measure and represents profit before interest, tax, depreciation, amortisation, impairment and rent.
1
2 Rent includes rental costs of short term or low value assets together with any related rent costs, including rent related taxes that could not be capitalised as part of lease liabilities.
3 "EBITDA" is a non-statutory profit measure and represents profit before interest, tax, depreciation, amortisation and impairment.
4 "EBIT" is a non-statutory profit measure and represents profit before interest and tax.
Annual Report 2022
79
Notes to the Financial Statements
Results for the Year
Ramsay Health Care Limited
1 Segment information (Continued)
Asia Pacific
$m
UK
$m
France
$m
Nordics
$m
Adjustments
&
Eliminations
$m1
Total
$m
8,387.2
(3,847.6)
4,828.8
(4,469.0)
9,242.9
(6,981.1)
2,602.1
(1,561.2)
(5,587.7)
1,911.8
19,473.3
(14,947.1)
8,303.0
(3,662.2)
3,399.7
(2,967.9)
10,019.0
(7,966.7)
2,111.1
(998.8)
(4,508.2)
821.8
19,324.6
(14,773.8)
As at 30 June 2022
Assets & liabilities
Segment assets
Segment liabilities
As at 30 June 2021
Assets & liabilities
Segment assets
Segment liabilities
1 Adjustments and eliminations consist of investments in subsidiaries and intercompany balances, which are eliminated on consolidation.
Segment revenue reconciliation to Income Statement
Total segment revenue and other income
Intersegment revenue elimination
Interest income
Total revenue and other income
2 Revenue and other income
2022
$m
13,747.1
(7.1)
36.2
13,776.2
2021
$m
13,328.1
(2.9)
7.1
13,332.3
The Group primarily derives revenue from providing health care and related services to both public and private patients in
the community.
2.a Revenue from contracts with customers
Revenue from patients
Revenue from governments under COVID support contracts
Rental revenue
Revenue from ancillary services
Revenue from contracts with customers
2022
$m
12,666.1
138.4
91.9
416.0
13,312.4
2021
$m
11,915.8
428.7
87.2
432.5
12,864.2
80
Annual Report 2022
Notes to the Financial Statements
Results for the Year
Ramsay Health Care Limited
2 Revenue and other income (Continued)
Accounting Policies
Revenue is recognised and measured at the amount of the consideration received or receivable to the extent that the performance
obligations under contracts have been satisfied and the revenue can be reliably measured. The following specific recognition criteria must
also be met before revenue is recognised:
REVENUE FROM PATIENTS
Revenue from patients is recognised on the date on which the services are provided to the patient.
REVENUE FROM GOVERNMENTS UNDER COVID SUPPORT CONTRACTS
Since 2020, specific contracts have been entered into with various government bodies under which Ramsay made available its facilities
and services, including equipment and staff, to assist with the respective government’s response to the COVID pandemic. Each of the
revenue agreements are specific to each government body as follows:
Australia
Agreements with the state governments of NSW, WA, QLD and VIC (each a State) commenced from either 31 March or 1 April 2020.
In return for the commitment to maintain full workforce capacity at the facilities, Ramsay has received, and recognised as revenue, net
recoverable costs (being recoverable costs less any revenue generated from operations, calculated on an accruals basis). Recoverable
costs include direct operating costs, service costs, corporate overhead costs (to the extent related to the provision of service),
depreciation associated with pre-existing capital, which is owned, and depreciation associated with lease assets. Interest and debt
servicing costs are excluded.
The agreements expire on various dates, depending on each State’s requirements. These end dates are (in most cases) 20 or 30
days after the State gives notice but not before: in the case of VIC, the temporary restrictions imposed on private hospitals performing
category 3 and non-urgent category 2 surgeries have been lifted; in the case of QLD, the State determines that activation of the
Australian Health Sector Emergency Response Plan for Novel Coronavirus 2019 has ceased; and, in the case of NSW, the date notified
by the Commonwealth government as being the last date covered by the private hospital financial viability payment under the National
Partnership Agreement.
Recoverable costs and revenue amounts are aggregated quarterly with each quarter considered separately. Where the revenue amounts
exceed recoverable costs the payment for that quarter is deemed to be zero.
VIC and QLD include a “Pause and Restart” mechanism whereby the State can put the agreement on pause allowing the Operator
to return to normal operations and relieves the State of any payment obligations during the pause while allowing the State to restart
the contract to provide COVID pandemic support when necessary. The QLD State government agreed to Ramsay’s request to put the
agreement on hold from 30 June 2020, but it recommenced from 20 December 2021. While the VIC agreement was paused from
31 March 2021, it recommenced from 1 October 2021 through 30 November 2021 and then recommenced again from 1 January 2022 and
was in place until 27 February 2022. The NSW agreement does not have a Pause and Restart mechanism and remains on foot.
The original agreement with the State government of WA expired and was replaced with a new agreement with essentially the same terms
effective 1 April 2022 with an Initial Term of 12 months, plus a Further Term of 6 months at the discretion of the Department.
UK
A new, volume based agreement with NHS England (NHSE) came into effect on 10 January 2022 and expired on 31 March 2022. A volume
based agreement was also in place, in the prior period, from 1 January 2021 and expired on 31 March 2021. Ramsay was able to continue
providing private patient activity during the relevant periods.
Future events could cause the assumptions on which these revenue accruals are based to change, which could affect the future results of
the Group. As the revenue recognised by the Group in accordance with the contracts is variable, revenue has been recognised only to the
extent that it is highly probable that a significant revenue reversal of the cumulative amount of revenue will not occur when the uncertainty
associated with the variable consideration is resolved.
RENTAL REVENUE
Rental income is accounted for on a straight-line basis over the lease term. Contingent rental income is recognised as income in
the periods in which it is earned. Lease incentives granted are recognised in the Income Statement as an integral part of the total
rental income.
REVENUE FROM ANCILLARY SERVICES
Income from ancillary services is recognised on the date the services are provided to the customer.
Annual Report 2022
81
Notes to the Financial Statements
Results for the Year
Ramsay Health Care Limited
2 Revenue and other income (Continued)
2.b Other income – income from government grants
Other income – income from government grants
Accounting Policies
2022
$m
2021
$m
402.0
428.3
INCOME FROM GOVERNMENT GRANTS
Government grants are recognised when there is reasonable assurance that the grant will be received and all the attached conditions will
be complied with. Grants are accounted for on a gross basis in revenue and expenses, by the Group. Where retention of a government
grant is dependent on the Group satisfying certain criteria, it is initially recognised as deferred income. When the criteria for retention have
been satisfied, the deferred income balance is recognised as other income.
Key Accounting Judgements, Estimates and Assumptions
Ramsay Santé was a beneficiary of the French government decree issued on 6 May 2020 which provided a guarantee of revenue
from 1 March 2020 to 31 December 2020, equal to 10/12th of the 2019 calendar year revenue from the government, with some small
indexation factor. The French government issued a new decree on 13 April 2021 covering the period 1 January 2021 to 30 June 2021
which subsequently was extended until 31 December 2021. For the period 1 July 2021 to 31 December 2021, the decree provided a
guarantee of revenue equal to the equivalent period of 2020 billed revenue, inclusive of the 2020 revenue guarantee if any. As the
actual billings over the six months period were below the guaranteed revenue, Ramsay Santé was entitled to the shortfall. In line with
the requirements, under this guarantee, the estimates, payments and final square ups that form part of the revenue guarantee are being
completed on a site-by-site basis. The law enacted on 22 January 2022 has extended the revenue guarantee until 30 June 2022, the
implementation of which is governed by a new decree issued on 10 May 2022.
As the final square up of the revenue guarantee for the period to 30 June 2022 will not be performed until FY23 and the grant income
recognised for Ramsay Santé is based on the current best estimate at hand at the time of issuing the Ramsay Group financial statements,
these estimates may be updated and result in a different amount. Any resulting difference will be recognised in the Ramsay Group results
in the period the final square up is performed.
2.c Other income - miscellaneous
Interest income
Other income – income from sale of development assets
Other income – net profit on disposal of non-current assets
Accounting Policies
2022
$m
2021
$m
36.2
1.8
23.8
61.8
7.1
20.4
12.3
39.8
INTEREST INCOME
Revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of
a financial asset and allocating the interest income over the relevant period using the effective interest rate (EIR), which is the rate
that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the
financial asset.
INCOME FROM SALE OF DEVELOPMENT ASSETS
Income from sale of development assets is recognised when the control of the development asset is transferred to the purchaser.
82
Annual Report 2022
Notes to the Financial Statements
Results for the Year
Ramsay Health Care Limited
3 Expenses
A breakdown of specific expenses helps users understand the financial performance of the Group.
Note
2022
$m
2021
$m
(i) Depreciation
Depreciation – Plant and equipment
Depreciation – Buildings
Depreciation – Right of use assets – Leased property
Depreciation – Right of use assets – Leased plant and equipment
Total
(ii) Amortisation
Amortisation – Service concession assets
Amortisation – Other
Total
(iii) Impairment
Impairment – Plant and equipment
Impairment – Land and buildings
Impairment – Intangible assets
Total
Total depreciation, amortisation and impairment
(iv) Property rental costs (included in occupancy costs)
Expenses relating to short term leases
Expenses relating to leases of low value assets
Variable lease payments
(v) Employee benefit and contractor costs
Wages and salaries
Workers’ compensation
Superannuation
Termination benefits
Social charges and contributions on wages and salaries
Other employment
Share-based payments (expenses arising from transactions accounted for as equity
settled share-based payment transactions)
Total
(vi) Finance costs
Interest expenses
Finance charges – Lease liability
Finance costs capitalised
Total
Accounting Policies
11
11
12
12
13
13
11
11
13
8.c
8.c
8.c
8.c
309.9
154.8
343.2
73.9
881.8
25.1
20.7
45.8
-
5.3
6.0
11.3
292.3
145.5
344.8
66.7
849.3
34.7
15.4
50.1
3.2
18.3
-
21.5
938.9
920.9
15.2
5.8
0.9
6,293.1
8.7
211.5
17.9
881.7
305.9
13.0
7,731.8
148.0
242.2
390.2
(1.2)
389.0
20.2
7.3
0.9
5,906.4
18.5
198.9
17.5
827.6
278.1
11.7
7,258.7
166.1
234.2
400.3
(2.2)
398.1
FINANCE COSTS
Finance costs include interest, amortisation of discounts or premiums related to borrowings and other costs incurred in connection with
the arrangement of borrowings. Financing costs are expensed as incurred unless they relate to a qualifying asset. A qualifying asset is an
asset which generally takes more than 12 months to get ready for its intended use or sale. In these circumstances, the financing costs are
capitalised to the cost of the asset. Where funds are borrowed by the Group for the acquisition or construction of a qualifying asset, the
amount of financing costs capitalised are those incurred in relation to that borrowing.
Annual Report 2022
83
Notes to the Financial Statements
Results for the Year
Ramsay Health Care Limited
4 Dividends
Dividends are a portion of Ramsay Group’s profit that are paid out to its shareholders, in return for their investment.
(i) Dividends determined and paid during the year on ordinary shares:
Current year interim dividend paid
Franked dividends – ordinary
(48.5 cents per share) (2021: 48.5 cents per share)
Previous year final dividend paid
Franked dividends – ordinary
(103.0 cents per share) (2021: 0.0 cents per share)1
(ii) Dividends proposed and not recognised as a liability on ordinary shares:
Current year final dividend proposed
Franked dividends – ordinary
(48.5 cents per share) (2021: 103.0 cents per share)
(iii) Dividends determined and paid during the year on CARES:
Current year interim and previous year final dividend paid
Franked dividends – CARES
(iv) Dividends proposed and not recognised as a liability on CARES:
Current year final dividend proposed
Franked dividends – CARES
(v) Franking credit balance
The amount of franking credits available for the subsequent financial year are:
franking account balance as at the end of the financial year at 30% (2021: 30%)
franking credits that will arise from the payment of income tax payable as at the end of the
financial year2
The amount of franking credits available for future reporting periods:
impact on the franking account of dividends proposed or determined before the financial report was
authorised for issue but not recognised as a distribution to equity holders during the period
Parent Entity
2022
$m
2021
$m
111.0
106.2
231.9
342.9
-
106.2
111.0
231.9
9.0
5.3
851.9
16.1
868.0
(49.9)
818.1
9.1
4.5
839.7
14.6
854.3
(103.0)
751.3
1 No final dividend determined for FY20.
2 As Ramsay Health Care Ltd and its 100% owned Australian subsidiaries have formed a tax consolidated group, effective 1 July 2003, this represents the current tax payable for the
Australian group.
The tax rate at which paid dividends have been franked is 30% (2021: 30%). $116.3 million (2021: $236.4 million) of the proposed dividends will
be franked at the rate of 30% (2021: 30%).
84
Annual Report 2022
Notes to the Financial Statements
Results for the Year
Ramsay Health Care Limited
5 Earnings per share
Earnings per share is the portion of post-tax profit allocated to each Ramsay ordinary share.
Net profit for the year attributable to owners of the parent
Less: dividend paid on Convertible Adjustable Rate Equity Securities (CARES)
Profit used in calculating basic and diluted (after CARES dividend) earnings per share
Weighted average number of ordinary shares used in calculating basic earnings per share
Effect of dilution – share rights not yet vested
Weighted average number of ordinary shares adjusted for the effect of dilution
2022
$m
2021
$m
274.0
(9.0)
265.0
449.0
(9.1)
439.9
2022
Number of
Shares (m)
2021
Number of
Shares (m)
227.8
0.5
228.3
227.7
0.7
228.4
The share rights granted to Executives but not yet vested, have the potential to dilute basic earnings per share.
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of
completion of these financial statements.
Earnings per share (EPS) attributable to equity holders of the parent
Basic earnings per share (after CARES dividend)
Diluted earnings per share (after CARES dividend)
2022
Cents per
Share
2021
Cents per
Share
116.3
116.1
193.2
192.6
Calculation of earnings per share
Basic earnings per share
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent (after
deducting the CARES dividend) by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share
Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent (after deducting
the CARES dividend) by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of
ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.
6 Net tangible assets
Net Tangible Assets (NTA) are the total assets minus intangible assets and total liabilities, divided by the number of ordinary
shares of the Company currently on issue at the reporting date. Net tangible assets include right of use assets as the underlying
leases are for physical assets.
Net tangible (liability)/asset per ordinary share
2022
$ per Share
(6.31)
2021
$ per Share
0.42
The reduction in net tangible (liability)/asset per ordinary share from 30 June 2021 is a result of the payment of dividends during the year
together with liabilities recognised to fund the business combinations undertaken during the year (refer Note 10). As the majority of the assets
recognised for the business combinations are goodwill and goodwill as an intangible asset is excluded from the calculation, it results in a
reduction in net tangible assets per share.
Annual Report 2022
85
Notes to the Financial Statements
Capital – Financing
Ramsay Health Care Limited
II Capital – Financing
This section discusses how the Ramsay Group manages funds and maintains capital structure, including bank borrowings,
related finance costs and access to capital markets.
How the Group manages its capital – Financing
The Group manages its capital structure with the objective of ensuring it will be able to continue as a going concern as well as maintaining
optimal returns to shareholders and benefits for its stakeholders. The Group also aims to maintain a capital structure that is consistent with its
targeted credit ratings, ensuring sufficient headroom is available within such ratings to support its growth strategies at an optimised weighted
average cost of capital. Prudent liquidity reserves in the form of committed undrawn bank debt facilities or cash are maintained in order to
accommodate its expenditures and potential market disruption.
The Group may raise or retire debt, adjust its dividend policy, return capital to shareholders, issue new shares or financial instruments
containing characteristics of equity, or sell assets to reduce debt in order to achieve the optimal capital structure.
The Group’s capital is comprised of equity plus net debt. Net debt is calculated as interest bearing liabilities plus derivatives relating to debt,
less cash assets.
During 2022, dividends of $351.9 million (2021: $115.3 million) were paid. For the year ended 30 June 2022, fully franked ordinary dividends of
97.0c (2021: 151.5c) per share were determined.
The group monitors its capital structure primarily by reference to its debt financial covenants and credit rating gearing metrics. Debt levels
under the Group’s financial covenants are assessed relative to the cash operating profits (EBITDA1) of the Group that are used to service debt.
This ratio is calculated as Net Debt/EBITDA1 and is 5.7x for the year ended 30 June 2022 (2021: 4.7x), however lending facilities within the
Group contain calculations and thresholds specific to each facility and borrowing groups having access to such facilities. Escrow funds of
$1.96 billion were recorded in the Statement of Financial Position at 30 June 2021 resulting in a higher than normal leverage. A normalised
Group Consolidated Leverage Ratio of 3.7x was calculated for 30 June 2021 after reducing Net Debt by the $1.96 billion cash held in escrow on
30 June 2021. These escrow funds were retrieved in July 2021 and used to repay debt.
The Group has committed senior debt funding with various maturities starting in November 2022 and ending in June 2031 . As such, certain
subsidiaries must comply with various financial and other undertakings in particular, the following customary financial undertakings:
• Total Net Leverage Ratio (Net Debt/EBITDA1 )
• Interest Cover Ratio (EBITDA1 / Net Interest)
• Minimum Shareholders Funds
The facilities maturing in November 2022 have a tenure of one year and are extended every six months.
Details of Capital – Financing are as follows:
Equity
Net Debt
Note
7
8
2022
$m
4,526.2
10,327.5
14,853.7
2021
$m
4,550.8
9,585.0
14,135.8
1
EBITDA is Earnings before Interest, Tax, Depreciation and Amortisation pre AASB 16 Leases.
86
Annual Report 2022
7 Equity
Issued capital
Treasury shares
Convertible Adjustable Rate Equity Securities (CARES)
Other reserves
Retained earnings
Non-controlling interests
7.a Issued capital
Notes to the Financial Statements
Capital – Financing
Ramsay Health Care Limited
Note
7.a
7.b
7.c
2022
$m
2,197.6
(72.4)
252.2
(152.6)
1,708.7
592.7
4,526.2
2021
$m
2,197.6
(76.7)
252.2
(91.3)
1,750.9
518.1
4,550.8
Issued capital represents the amount of consideration received for the ordinary shares issued by Ramsay Health Care Limited
(the Company).
Issued and paid up capital
As at 30 June
2022
Number (m)
228.9
2022
$m
2,197.6
2021
Number (m)
228.9
2021
$m
2,197.6
Terms and conditions of issued capital
ORDINARY SHARES
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds
from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to
one vote, either in person or by proxy, at a meeting of the Company.
Accounting Policies
ORDINARY SHARES
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as
a deduction, net of tax, from the proceeds.
7.b Treasury shares
Treasury shares are the shares repurchased on the open market, for the share rights issued to employees under the Employee
Share Plan.
1.1 million ordinary shares (30 June 2021: 1.1 million ordinary shares)
Nature & Purpose
Treasury shares are shares in the Company held by the Employee Share Plan and are deducted from equity.
2022
$m
2021
$m
72.4
76.7
Annual Report 2022
87
Notes to the Financial Statements
Capital – Financing
Ramsay Health Care Limited
7 Equity (Continued)
7.c Convertible Adjustable Rate Equity Securities (CARES)
Convertible Adjustable Rate Equity Securities (CARES) are non-cumulative, redeemable and convertible preference shares in
Ramsay Health Care Limited.
Issued and paid up capital
2.6 million CARES shares fully paid (30 June 2021: 2.6 million CARES shares fully paid)
252.2
252.2
2022
$m
2021
$m
Terms and conditions of CARES
Ramsay Health Care Limited
Convertible Adjustable Rate Equity Securities (CARES) which are a non-cumulative, redeemable and convertible preference
share in Ramsay.
$100 Per CARES.
The holder of each CARES is entitled to a preferred, non-cumulative, floating rate dividend equal to:
Dividend Entitlement = (Dividend Rate x Face Value x N) / 365
where:
N is the number of days in the Dividend Period
The payment of Dividends is at the Directors’ discretion and is subject to there being funds legally available for the payment
of Dividends and the restrictions which apply in certain circumstances under the financing arrangements.
If declared, the first Dividend will be payable on each CARES in arrears on 20 October 2005 and thereafter on each 20 April
and 20 October until CARES are converted or exchanged.
The Dividend Rate for each Dividend Period is calculated as:
Dividend Rate = (Market Rate + Margin) x (1-T)
where:
The Market Rate is the 180 day Bank Bill Swap Rate applying on the first day of the Dividend Period expressed as a
percentage per annum.
The Margin for the period to 20 October 2010 was 2.85% per annum. It was determined by the Bookbuild held on
26 April 2005.
T is the prevailing Australian corporate tax rate applicable on the Allotment Date.
As Ramsay did not convert or exchange by 20 October 2010, the Margin was increased by a one-time step up of 2.00% (200
basis points) per annum.
One-time 2.00% (200 basis points) step-up in the Margin at 20 October 2010
Ramsay expects the Dividends paid on CARES to be fully franked. If a Dividend is not fully franked, the Dividend will be
grossed up to compensate for the unfranked component.
If, on a Dividend Payment Date, the Australian corporate tax rate differs from the Australian corporate tax rate on the
Allotment Date, the Dividend will be adjusted downwards or upwards accordingly.
CARES have no maturity. Ramsay may convert or exchange some or all CARES at its election for shares or $100 in cash for
each CARES on 20 October 2010 and each Dividend Payment Date thereafter.
Ramsay also has the right to:
• convert or exchange CARES after the occurrence of a Regulatory Event; and
• convert CARES on the occurrence of a Change in Control Event.
Issuer
Security
Face
Value
Dividends
Dividend
Rate
Step-up
Franking
Conversion
or
exchange
by Ramsay
Conversion
Ratio
Ramsay cannot elect to convert or exchange only some CARES if such conversion or exchange would result in there being
less than $50 million in aggregate Face Value of CARES on issue.
The rate at which CARES will convert into Shares will be calculated by reference to the market price of Shares during
20 business days immediately preceding, but not including, the conversion date, less a conversion discount of 2.5%. An
adjustment is made to the market price calculation in the case of a Change in Control Event. The Conversion Ratio for each
CARES will not be greater than 400 shares.
CARES rank equally amongst themselves in all respects and are subordinated to all creditors but rank in priority to Shares.
Ranking
Participation Unless CARES are converted into Shares, CARES confer no rights to subscribe for new shares in any fundraisings by Ramsay
or to participate in any bonus or rights issues by Ramsay.
CARES do not carry a right to vote at general meeting of Ramsay except in limited circumstances.
Voting
Rights
88
Annual Report 2022
8 Net debt
Cash and cash equivalents
Loans and borrowings – current
Lease liabilities – current
Loans and borrowings – non-current
Lease liabilities – non-current
Net derivative assets / (liabilities) – debt related
8.a Cash and cash equivalents
Notes to the Financial Statements
Capital – Financing
Ramsay Health Care Limited
Note
8.a
8.b
8.c
8.b
8.c
8.d
2022
$m
314.2
(42.8)
(354.8)
(5,173.5)
(5,127.6)
57.0
(10,327.5)
2021
$m
1,004.8
(51.7)
(368.2)
(5,229.0)
(4,902.8)
(38.1)
(9,585.0)
Cash and cash equivalents comprise of cash at bank, cash on hand and short-term deposits with a maturity of less than three
months. This note presents the amount of cash on hand at year end, together with further reconciliations in relation to the
Statement of Cash Flows.
Cash at bank and on hand
2022
$m
314.2
2021
$m
1,004.8
Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between
one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term
deposit rates.
Accounting Policies
CASH AND CASH EQUIVALENTS
Cash and short-term deposits in the Statement of Financial Position comprise cash at bank and on hand and short-term deposits with an
original maturity of three months or less.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net
of outstanding bank overdrafts and restricted cash.
Reconciliation to Statement of Cash Flows
For the purposes of the Statement of Cash Flows, cash and cash
equivalents comprise the following at 30 June
Cash at bank and on hand
2022
$m
2021
$m
314.2
1,004.8
Annual Report 2022
89
Notes to the Financial Statements
Capital – Financing
Ramsay Health Care Limited
8 Net debt (Continued)
Reconciliation of net profit after tax to net cash flows from operations
Net profit after tax for the year
Adjustments for:
Share of profit of joint venture
Depreciation, amortisation and impairment
Interest received
Share-based payments
Net profit on disposal of non-current assets
Other
Changes in assets & liabilities:
Deferred tax
Receivables
Other assets
Creditors, accruals and other liabilities
Provisions
Inventories
Current tax
Net cash flows from operating activities
2022
$m
2021
$m
379.2
511.5
(15.5)
938.9
(36.2)
13.0
(23.8)
18.7
(55.0)
(664.8)
(8.9)
179.7
(22.9)
28.2
(15.1)
715.5
(10.9)
920.9
(7.1)
11.7
(12.3)
2.2
(27.8)
(103.9)
66.1
134.9
(22.4)
(11.4)
29.7
1,481.2
Reconciliation of liabilities arising from financing activities
As at
1 July
2021
Cash
Flows
Foreign
Exchange
Movement
New
Leases
Disposal/
Termination
or
Reassessment
of Leases
Business
Combinations
As at
30 June
2022
Other
$m
$m
$m
$m
$m
$m
$m
$m
Loans and borrowings
– current
Loans and borrowings
– non-current
Lease Liabilities
Total
51.7
(658.9)
(8.7)
-
658.9
5,229.0
5,271.0
10,551.7
8.9
(387.8)
(1,037.8)
(122.0)
(226.8)
(357.5)
-
310.3
310.3
24.1
514.1
1,197.1
-
-
1.6
1.6
(0.2)
42.8
33.5
-
33.3
5,173.5
5,482.4
10,698.7
As at
1 July
2020
$m
Cash
Flows
$m
Foreign
Exchange
Movement
$m
New
Leases
$m
Disposal/
Termination
or
Reassessment
of Leases
$m
Business
Combinations
$m
As at
30 June
2021
$m
Other
$m
32.3
5.9
(0.3)
-
4,195.5
5,289.2
9,517.0
1,064.0
(334.0)
735.9
(50.9)
(54.0)
(105.2)
-
384.8
384.8
14.0
15.7
11.2
40.9
-
(0.2)
51.7
-
(26.2)
(26.2)
4.7
-
4.5
5,229.0
5,271.0
10,551.7
Loans and borrowings
– current
Loans and borrowings
– non-current
Lease Liabilities
Total
Disclosure of financing facilities
Refer to Note 8.b.
90
Annual Report 2022
Notes to the Financial Statements
Capital – Financing
Ramsay Health Care Limited
8 Net debt (Continued)
8.b Loans and borrowings
This note outlines the Group's loans and borrowings, which are predominantly from banks and other financial institutions, with
varying maturities.
Current
Secured bank loans:
€ Bi-lateral Facilities1
Total current loans and borrowings
Non-current
Unsecured bank and other financial institution loans:
A$ 1,500,000,000 Syndicated Facility Loan2
A$ 600,000,000 Syndicated Facility Loan3
A$ 200,000,000 Bi-lateral Term Loan4
€ 300,000,000 Syndicated Facility Loan5
Secured bank loans:
€ 1,450,000,000 Syndicated Term Loan6
€ Bi-lateral Facilities1
Secured/Unsecured corporate notes:
€ 100,000,000 Sustainability Linked Euro Private Placement Notes7
Total non-current loans and borrowings
Total loans and borrowings
Maturity
2022
$m
2021
$m
Up to Jun 2031
42.8
42.8
51.7
51.7
Up to Jul 2026
Dec 2023
Oct 2024
Oct 2024
Up to Apr 2027
Up to Jun 2031
Up to Dec 2029
1,443.2
599.5
-
455.6
2,498.3
2,188.2
335.1
2,523.3
151.9
5,173.5
5,216.3
1,195.4
716.5
199.6
474.3
2,585.8
2,277.2
366.0
2,643.2
-
5,229.0
5,280.7
1 Euro bi-lateral facilities are secured by a first charge over certain Ramsay Santé and controlled entities’ land and buildings. These loans are repayable in instalments over the term of
the facilities.
2 Sustainability linked syndicated revolving bank debt facility with equal tranches which mature over 3 years, 4 years and 5 years.
3 Syndicated revolving bank debt facility. Facility was downsized in November 2021 from A$800 million to A$600 million. The shortfall was replaced by the creation of A$200 million of
bi-lateral facilities.
4 Bi-lateral term loan facility and repayable in full on maturity.
5 Syndicated revolving bank debt facility.
6 Sustainability linked syndicated term loan facilities repayable in full on maturity. The lenders only have recourse to Ramsay Santé and certain Ramsay Santé controlled entities.
7 Euro Private Placement Notes, maturing in December 2028 and December 2029.
RAMSAY AND ITS WHOLLY OWNED SUBSIDIARIES
Ramsay Funding Group prepaid A$200 million in bi lateral term debt facility in November 2021. The covenant package, group guarantees and
other common terms and conditions in respect of the debt facilities are governed under a Common Terms Deed Poll (CTDP).
RAMSAY SANTÉ AND CONTROLLED ENTITIES
Ramsay Santé and controlled entities issued €100 million Euro Private Placement notes in December 2021. This comprised of €40 million
maturing in December 2028 and €60 million maturing in December 2029. The lenders to these debt facilities only have recourse to Ramsay
Santé and certain Ramsay Santé controlled entities. The debt facilities are secured by first ranking pledges over certain material companies
of Ramsay Santé, granted only by Ramsay Santé and certain Ramsay Santé controlled entities. Guarantees have also been provided and are
provided only by Ramsay Santé controlled entities.
Annual Report 2022
91
Notes to the Financial Statements
Capital – Financing
Ramsay Health Care Limited
8 Net debt (Continued)
Fair values
The fair values of the Group’s interest bearing loans and borrowings are determined by using the discounted cash flow method with discount
rates that reflect market interest rates, specific country risk factors, individual creditworthiness of the counterparties and the other risk
characteristics associated with the underlying debts.
Unless disclosed below, the carrying amount of the Group’s current and non-current borrowings approximate their fair value. The fair values
have been calculated by discounting the expected future cash flows at prevailing market interest rates depending on the type of borrowings.
At reporting date, the market interest rates vary from 1.104% to 1.793% (2021: 0.060% to 0.0803%) for Australia and -0.553% to -0.475% (2021:
-0.569% to -0.542%) for France respectively.
The fair value of the interest bearing loans and borrowings was estimated using the level 2 method valuation technique in which the lowest
level of input that is significant to the fair value measurement is directly or indirectly observable. Set out in the table below is a comparison by
carrying amounts and fair value of the Group’s Interest bearing loans and borrowings.
Bank loans
Corporate notes
2022
2021
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
$m
5,064.4
151.9
5,216.3
$m
5,286.3
165.0
5,451.3
$m
5,280.7
-
5,280.7
$m
5,381.3
-
5,381.3
Interest rate, foreign exchange & liquidity risk
Details regarding interest rate, foreign exchange and liquidity risk is disclosed in Note 17.
Assets pledged as security
The carrying amounts of assets pledged as security for loans and borrowings are set out in the following table:
Fixed and floating charge
Fixed assets
Investment holdings in subsidiaries
Total non-current assets pledged as security
Accounting Policies
2022
$m
2021
$m
3.0
3,599.8
3,602.8
3.1
3,917.8
3,920.9
LOANS AND BORROWINGS
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Losses
are recognised in profit or loss when the liabilities are derecognised.
92
Annual Report 2022
Notes to the Financial Statements
Capital – Financing
Ramsay Health Care Limited
8 Net debt (Continued)
8.c Lease liabilities
The Group has lease contracts for the use of hospitals, office space and various items of equipment and vehicles which it
uses in its operations. Leases of hospitals and office space can have lease terms between 5 and 120 years, while vehicles and
equipment generally have lease terms between 5 and 10 years.
Generally, the Group is restricted from assigning and subleasing the leased assets. A number of the lease contracts include extensions,
termination options and variable lease payments, which are discussed below.
The Group also has certain leases of equipment with lease terms of 12 months or less and leases of office equipment with a low value. The
Group applies the ‘short term lease’ and ‘lease of low value assets’ recognition exemptions for these leases.
As at 1 July
Additions
Business combinations
Disposals or terminations
Payments
Accretion of interest
Reassessment of lease terms
Exchange differences
As at 30 June
Current lease liabilities
Non-current lease liabilities
Total lease liabilities
Assets pledged as security
The carrying amounts of assets pledged as security for lease liabilities are set out in the following table:
Leased assets pledged as security
2022
$m
5,271.0
310.3
514.1
(9.7)
(630.0)
242.2
11.3
(226.8)
5,482.4
2022
$m
354.8
5,127.6
5,482.4
2021
$m
5,289.2
384.8
11.2
(91.0)
(568.2)
234.2
64.8
(54.0)
5,271.0
2021
$m
368.2
4,902.8
5,271.0
2022
$m
2021
$m
788.7
365.3
Cash outflows
The Group had total cash outflows for leases of approximately $651.9 million in 2022 (2021: $596.6 million) - the principal portion of lease
payments totalled $387.8 million (2021: $334.0 million), interest payments totalled $242.2 million (2021: $234.2 million) and other payments
relating to low-value assets, short term and variable lease payments totalled approximately $21.9 million (included in payments to suppliers and
employees) (2021: $28.4 million).
Annual Report 2022
93
Notes to the Financial Statements
Capital – Financing
Ramsay Health Care Limited
8 Net debt (Continued)
Accounting Policies
All leases are accounted for by recognising a right of use asset and a lease liability except for:
• Leases of low value assets, being those with a cost of $50,000 or less; and
• Leases with a term of 12 months or less.
LEASE LIABILITIES
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount
rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which
case the Group’s incremental borrowing rate on commencement of the lease is used. Variable lease payments are only included in the
measurement of the lease liability if they depend on an index or rate. In such cases, the initial measurement of the lease liability assumes
the variable element will remain unchanged throughout the lease term. Other variable lease payments are expensed in the period to
which they relate.
On initial recognition, the carrying value of the lease liability also includes:
• amounts expected to be payable under any residual value guarantee;
• the exercise price of any purchase option granted in favour of the group if it is reasonably certain to exercise that option;
• any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of the termination option
being exercised.
LEASE ASSETS
Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for:
• lease payments made at or before commencement of the lease;
• initial direct costs incurred; and
• the amount of any provision recognised where the group is contractually required to dismantle, remove or restore the leased asset.
Subsequent to initial measurement, lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding
and are reduced for lease payments made. Right of use assets are amortised on a straight line basis over the shorter of the useful life of
the asset or the term of the lease. Lease liabilities are remeasured when there is a change in future lease payments arising from a change
in an index or rate or when there is a change in the assessment of the term of the lease.
The Group applies the short term lease recognition exemption to its short term lease of equipment, being those leases that have a lease
term of 12 months or less from the commencement date and do not contain a purchase option. The Group also applies the low-value
assets recognition exemption to leases of equipment that are considered to be of low value. Lease payments on short term leases and
leases of low value assets are recognised as an expense on a straight line basis over the lease term.
Key Accounting Judgements, Estimates and Assumptions
LEASE TERM
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend
the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain
not to be exercised.
The Group has the option, under some of its leases to lease the assets for additional terms. The Group applies judgement in evaluating
whether it is reasonably certain to exercise the options to renew. That is, it considers all relevant factors that create an economic incentive
for it to exercise the renewal. After commencement date, the Group reassess the lease term if there is a significant event or change in
circumstances that is within its control and affects its ability to exercise (or not exercise) the option to renew.
DISCOUNT RATES
The lease payments are discounted using the interest rate implicit in the lease or the lessee’s incremental borrowing rate (IBR). The IBR
is the rate of interest that the lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to
obtain an asset of a similar value to the right of use asset in a similar economic environment. The IBR therefore requires estimation when
no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted
to reflect the terms and conditions of the lease.
94
Annual Report 2022
Notes to the Financial Statements
Capital – Financing
Ramsay Health Care Limited
8 Net debt (Continued)
8.d Derivative financial instruments
A derivative is a financial instrument typically used to manage an underlying risk, using futures, swaps and options. The value
change of a derivative is related to changes in a variable, such as interest rate or foreign exchange rate. The Group uses
derivatives to manage exposure to foreign exchange and interest rate risk.
Current assets
Interest rate and foreign exchange derivative contracts – cash flow hedges
Interest rate and foreign exchange derivative contracts – economic hedges
Non-current assets
Interest rate and foreign exchange derivative contracts – cash flow hedges
Interest rate and foreign exchange derivative contracts – economic hedges
Current liabilities
Interest rate and foreign exchange derivative contracts – cash flow hedges
Non-current liabilities
Interest rate and foreign exchange derivative contracts – cash flow hedges
Net derivative assets/(liabilities)
2022
$m
2021
$m
8.9
2.4
29.6
16.1
57.0
-
-
-
57.0
-
-
-
-
-
(14.9)
(23.2)
(38.1)
(38.1)
Instruments used by the Group
Derivative financial instruments are used by the Group in the normal course of business in order to hedge exposure to fluctuations in interest
and foreign exchange rates.
INTEREST RATE SWAPS AND FORWARD FOREIGN EXCHANGE CONTRACTS – CASH FLOW HEDGES
Interest bearing loans in Australian Dollar of the Group currently bear an average variable base interest rate excluding margin of 1.477% (2021:
0.0666%). Interest bearing loans in Euro of the Group currently bear a zero variable base interest rate excluding margin (2021: 0%) pursuant to
an interest rate floor within the facility agreements whereby base interest rate (EURIBOR) is deemed to be zero when it is negative.
In order to reduce the variability of the future cash flows in relation to the interest bearing loans, the Group has entered into Australian Dollar
and Euro interest rate swap contracts under which it has a right to receive interest at variable rates and to pay interest at fixed rates. Swaps in
place cover approximately 39% (2021: 67%) of the principal outstanding.
While the Group also enters into other foreign exchange forward contracts with the intention to reduce the foreign exchange risk of expected
sales and purchases, these other contracts are not designated in hedge relationships and are measured at fair value through profit or loss.
Interest rate risk
Information regarding interest rate risk exposure is set out in Note 17.
Credit risk
Credit risk arises from the potential failure of counterparties to meet their obligations at maturity of contracts. This arises on derivative financial
instruments with unrealised gains. Management constantly monitor the fair value of favourable contracts outstanding with any individual
counterparty. Management only deal with prime financial institutions with appropriate credit ratings in order to manage this credit risk.
Annual Report 2022
95
Notes to the Financial Statements
Capital – Financing
Ramsay Health Care Limited
8 Net debt (Continued)
Fair value of derivative financial instruments
The fair value of the derivative financial instruments was estimated using the level 2 method valuation technique and is summarised in the
table above.
The most frequently applied valuation techniques include forward pricing and swap models, using present value calculations. The models
incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates and interest rate curves.
The changes in counterparty credit risk had no material effect on the hedge effectiveness assessment for derivatives designated in
hedge relationships.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value,
maximising the use of relevant observable inputs and minimising the use of unobservable inputs. Information about the valuation techniques
and inputs used in determining the fair value of various assets and liabilities are disclosed in the relevant notes.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy,
described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1
Level 2
Level 3
Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly
or indirectly observable
Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have
occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period.
There were no transfers between Level 1 and Level 2 or between Level 2 and Level 3 during the year.
The notional principal amounts and period of expiry of the interest rate derivatives contracts are as follows:
0-1 years
1-2 years
2-3 years
3-5 years
Over 5 years
2022
$m
1,102.4
210.0
1,059.4
450.0
-
2,821.8
2021
$m
-
1,043.5
110.0
790.5
-
1,944.0
The interest rate derivatives require settlement of net interest receivable or payable each 90 or 180 days. They are settled on a net basis. The
swaps are measured at fair value and all gains and losses attributed to the hedged risk are taken directly to equity and re-classified to the
Income Statement when the interest expense is recognised.
Accounting Policies
The Group uses derivative financial instruments such as interest rate swaps to hedge its risks associated with interest rates. Such
derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are
subsequently remeasured to fair value. Derivatives are carried as assets when the fair value is positive and as a liability when the fair value
is negative.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss, except for the effective portion
of cash flow hedges, which is recognised in Other Comprehensive Income, and later classified to profit and loss when the hedge item
affects profit or loss.
For the purposes of hedge accounting, hedges are classified as:
• fair value hedges when they hedge the exposure to changes in the fair value of a recognised asset or liability;
• cash flow hedges when they hedge exposure to variability in cash flows that is attributable either to a particular risk associated
with a recognised asset or liability or to a highly probable forecast transaction or the foreign currency risk in an unrecognised firm
commitment; or
• hedges of a net investment in a foreign operation.
96
Annual Report 2022
Notes to the Financial Statements
Capital – Financing
Ramsay Health Care Limited
8 Net debt (Continued)
Accounting Policies
At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which the Group
wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation
includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the Group will
assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge
ineffectiveness and how the hedge ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all of the
following effectiveness requirements:
• There is an economic relationship between the hedged item and the hedging instrument;
• The effect of credit risk does not ‘dominate the value changes’ that result from that economic relationship; and
• The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually
hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.
Hedges that meet the strict criteria for hedge accounting are accounted for as follows:
CASH FLOW HEDGES
The effective portion of the gain or loss on the hedging instrument is recognised directly in Other Comprehensive Income in the cash flow
hedge reserve, while any ineffective portion is recognised immediately in the Income Statement as other operating expenses.
The Group uses predominantly interest rate swap contracts as hedges of its exposure to fluctuations in interest rates. There is an
economic relationship between the hedged item and the hedging instrument as the term of the interest rate swap matches the terms of
the variable rate loan (that is, notional amount, maturity, base rate, payment and reset dates).
The Group only designates the intrinsic value of the interest rate option contracts as hedging instruments. The time value of the interest
rate option contracts are recognised in Other Comprehensive Income and accumulated in a separate component of equity under the cost
of Hedging Reserve. These deferred costs of hedging are recognised in the profit or loss on a systematic basis over the tenor of the
interest rate option contracts.
Amounts recognised as Other Comprehensive Income are transferred to profit or loss when the hedged transaction affects profit or loss,
such as when the hedged financial income or financial expense is recognised. When the hedged item is the cost of a non-financial asset
or non-financial liability, the amounts recognised as Other Comprehensive Income are transferred to the initial carrying amount of the
non-financial asset or liability.
If the forecast transaction or firm commitment is no longer expected to occur, the cumulative gain or loss previously recognised in Other
Comprehensive Income is transferred to the Income Statement. If the hedging instrument expires or is sold, terminated or exercised
without replacement or rollover, or if its designation as a hedge is revoked, any cumulative gain or loss previously recognised in Other
Comprehensive Income remains in Other Comprehensive Income until the forecast transaction or firm commitment affects profit or loss.
Subsequent measurement
For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques. Such
techniques may include:
• Using recent arm’s length market transaction;
• Reference to the current fair value of another instrument that is substantially the same; or
• A discounted cash flow analysis or other valuation models.
Fair value of derivative financial instruments
The Group measures financial instruments, such as, derivatives, at fair value at each reporting date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or
transfer the liability takes place either:
• In the principal market for the asset or liability; or
• In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming that market participants act in their economic best interest.
Annual Report 2022
97
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
III Assets and Liabilities – Operating and Investing
This section outlines how the Ramsay Group manages its assets and liabilities to generate profit.
How the Group manages its overall financial position
The Group manages its overall financial position by segregating its balance sheet into two categories; Assets and Liabilities – Operating and
Investing and Capital – Financing. Assets and Liabilities – Operating and Investing is managed at both the site and group level while Capital –
Financing (refer to section II) is managed centrally.
Details of Assets and Liabilities – Operating and Investing are as follows:
Working capital
Property, plant and equipment
Right of use assets
Intangible assets
Current and deferred tax assets
Other assets/(liabilities)
9 Working capital
Trade and other receivables (current)
Inventories
Trade and other creditors (current)
Note
9
11
12
13
15
16
Note
9.a
9.b
9.c
2022
$m
(337.7)
4,806.9
4,627.7
5,799.0
111.7
(153.9)
14,853.7
2022
$m
2,331.3
376.8
(3,045.8)
(337.7)
2021
$m
(794.8)
4,488.6
4,411.5
4,233.6
150.7
1,646.2
14,135.8
2021
$m
1,809.5
409.4
(3,013.7)
(794.8)
Consistent with prior periods, the Group actively manages the collection of debtor receipts and creditor and employee payments. This often
results in a negative working capital metric and net current liability position. Any surplus or deficit in the working capital is managed through
efficient use of the revolving debt facilities and cash balances. The Group had an undrawn facility limit of $779 million as at 30 June 2022.
The change in working capital during the year is mostly as a result of an increase in the trade and other receivables amounts as funding from
the COVID government agreements reduced and more usual invoicing and payment patterns with customers resumed.
9.a Trade and other receivables
Trade and other receivables primarily consists of amounts outstanding from Governments, Health Funds and Self Insured
patients for delivering health care and related services.
Current
Trade and other receivables
Allowances for impairment loss
Non-current
Rental property bonds and guarantees receivable
Other
Total
98
Annual Report 2022
2022
$m
2021
$m
2,401.9
(70.6)
2,331.3
32.5
46.5
79.0
2,410.3
1,871.5
(62.0)
1,809.5
37.3
33.3
70.6
1,880.1
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
9 Working capital (Continued)
Allowances for impairment loss
An allowance for expected credit loss (ECL) is recognised based on the difference between the contractual cash flows and the expected cash
flows. The Group has applied a simplified approach in calculating ECLs by establishing a provision matrix for forward-looking factors specific to
the debtors and the economic environment.
Movements in the allowances for impairment loss were as follows:
As at 1 July
Charge for the year
Exchange differences
Amounts written off
Disposal of subsidiary
As at 30 June
2022
$m
2021
$m
(62.0)
(40.3)
2.1
29.6
-
(70.6)
(61.7)
(29.5)
0.6
24.3
4.3
(62.0)
Ageing analysis
At 30 June, the ageing analysis of trade and other receivables is as follows:
Neither
past due
nor
impaired
$m
1,777.7
1,447.2
Total
$m
2,480.9
1,942.1
0-30
Days
PDNI1
$m
294.6
218.6
31-60
Days
PDNI1
$m
122.7
81.2
61-90
Days
PDNI1
$m
37.7
13.6
91+
Days
PDNI1
$m
177.6
119.5
Considered
impaired
$m
70.6
62.0
2022
2021
1 PDNI – Past due not impaired
Receivables past due but not considered impaired are: $632.6 million (2021: $432.9 million). Payment terms on these amounts have not been
re-negotiated as based on the credit history of receivables past due not considered impaired, management believes that these amounts will be
fully recovered. This is due to the fact that the Group mainly deals with Government Authorities and creditworthy Health Funds.
Fair value
Due to the short term nature of the current receivables, the carrying value approximates fair value. The carrying values of the discounted
non-current receivables approximates their fair values.
Credit risk
The maximum exposure to credit risk for current receivables is their carrying value. Collateral is not held as security. The Group’s credit risk
is low in relation to trade debtors because the majority of transactions are with the Government and Health Funds. The maximum exposure
to credit risk for non-current receivables at the reporting date is the carrying value of these receivables. The majority of the non-current
receivables are assessed as low risk.
Foreign exchange & interest rate risk
Details regarding foreign exchange and interest rate risk exposure are disclosed in Note 17.
Annual Report 2022
99
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
9 Working capital (Continued)
9.b Inventories
Inventories include medical supplies to be consumed in providing future patient services, and development assets, including
medical suites to be sold, that are currently under construction.
Amount of medical supplies to be consumed in providing future patient services – at cost
Development assets to be sold that are currently under construction – at cost
Total
2022
$m
328.4
48.4
376.8
2021
$m
363.8
45.6
409.4
Inventory expense
Medical supplies recognised as an expense for the year ended 30 June 2022 totalled $3,107.8 million (2021: $3,008.7 million) for the
Group. This expense has been included in the expense category 'medical consumables and supplies' in the Income Statement. The cost of
development assets sold which has been recognised as an expense for the year ended 30 June 2022 totalled $1.4 million (2021: $8.5 million)
for the Group. This expense has been included in the expense category 'cost of development assets sold' in the Income Statement.
Accounting Policies
Inventories are recorded using the FIFO method and are valued at the lower of cost and net realisable value. Net realisable value is the
estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make
the sale.
9.c Trade and other creditors
Trade and other creditors consists of amounts owing to employees and suppliers for goods and/or services delivered and
customer amounts paid in advance of provision of services.
Trade creditors
Accrued expenses
Employee and Director entitlements
Other creditors1
Total
2022
$m
1,476.0
474.6
1,051.5
43.7
3,045.8
2021
$m
1,164.6
474.1
1,061.6
313.4
3,013.7
1
Included in this balance is funding received in advance from various Governments under COVID arrangements
Fair value
Trade and other creditors amounts are non-interest bearing and are normally settled on 30-60 day terms. Due to the short term nature of these
payables, their carrying value is assumed to approximate their fair value.
Interest rate, foreign exchange & liquidity risk
Details regarding interest rate, foreign exchange and liquidity risk exposure are set out in Note 17.
100
Annual Report 2022
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
10 Business combinations
Ramsay’s growth has been driven, in part, by acquisitions of businesses within the healthcare sector.
Elysium – 2022
On 31 January 2022, Ramsay acquired 100% of the voting shares of the leading UK based mental healthcare provider Elysium Healthcare
(Elysium) for $1.5 billion, consisting of $0.7 billion of bank loans acquired with the business that were repaid and $0.8 billion paid for in cash.
The acquisition was funded through Ramsay's existing debt facilities.
Elysium is a leading independent operator of long-term medium and low secure hospitals and complex care homes for individuals with mental
health conditions and has a strong partnership with the UK National Health Service.
Ramsay has recognised amounts for this business combination as outlined below. These amounts have been determined on a provisional
basis only.
Cash and cash equivalents
Trade and other receivables (current)
Inventories
Other current assets
Property, plant and equipment
Right of use assets
Trade and other creditors (current)
Loans and borrowings (current)
Lease liabilities (current and non-current)
Deferred tax liabilities
Other liabilities (current and non-current)
Fair value of identifiable net assets
Goodwill arising
Business combination date fair value of consideration transferred
The cash outflow as a result of the business combination is as follows:
Cash paid
Net cash acquired with the subsidiary
Net consolidated cash outflow
Direct costs relating to the business combination – included within service costs
$m
5.8
82.4
0.3
18.0
254.6
471.2
(84.4)
(657.7)
(472.8)
(111.5)
(6.7)
(500.8)
1,313.4
812.6
(812.6)
5.8
(806.8)
20.0
The goodwill of $1,313.4 million comprises the value of intangible assets that do not qualify for separate recognition as well as synergies
expected to be achieved as a result of combining Elysium with the rest of the Group. The acquisition provides a number of strategic benefits
consistent with Ramsay’s growth strategy. None of the goodwill recognised is expected to be deductible for income tax purposes. Goodwill is
allocated entirely to the UK reporting segment in Note 1.
The fair value of the acquired receivables amounts to $82.4 million. The gross contractual amount receivable is $84.3 million.
The Group measured the acquired lease liabilities using the present value of the remaining lease payments at the date of acquisition. The right
of use assets were measured at an amount equal to the lease liabilities and adjusted for prepaid leases and lease incentives.
From the date of acquisition to 30 June 2022, Elysium contributed $284.3 million of revenue and $23.1 million to profit before interest and tax
from continuing operations of the Group. If the combination had taken place at the beginning of the year, 1 July 2021, revenue from continuing
operations would have been $688.5 million and profit before interest and tax from continuing operations for the Group would have been
$58.9 million.
Annual Report 2022
101
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
10 Business combinations (Continued)
GHP – 2022
On 2 May 2022, Ramsay Sante acquired 98% of the voting shares of the GHP Speciality Care AB (GHP). The GHP acquisition valued the
business on an enterprise value of approximately A$370 million (€240 million).
GHP is a health care provider that operates 24 specialist clinics in a select number of diagnostic areas including specialist competences in
spine orthopedics, gastro, surgery and arrhythmia. Combined, Sante and GHP will provide services covering eight out of the ten largest disease
groups in Sweden. The combination would represent complementary geographical presence, increased patient group coverage, and stronger
focus on digital and data driven solutions for improved quality, accessibility, and efficiency of healthcare in the Nordic region.
The recognised amounts for this business combination are as outlined below. These amounts have been determined on a provisional
basis only.
Cash and cash equivalents
Trade and other receivables (current)
Inventories
Other current assets
Property, plant and equipment
Right of use assets
Provisions and other liabilities (current)
Loans and borrowings (non-current)
Deferred tax liabilities
Provisions and other liabilities (non-current)
Fair value of identifiable net assets
Non controlling interest
Goodwill arising
Business combination date fair value of consideration transferred
The cash outflow as a result of the business combination is as follows:
Cash paid
Net cash acquired with the subsidiary
Net consolidated cash outflow
Direct costs relating to the business combination – included within service costs
$m
27.0
31.2
1.5
14.3
11.9
7.4
(17.7)
(22.3)
(1.0)
(33.2)
19.1
(0.4)
336.5
355.2
(355.2)
27.0
(328.2)
5.0
The goodwill of $336.5 million comprises the value of intangible assets that do not qualify for separate recognition as well as synergies
expected to be achieved as a result of combining GHP with the rest of the Group. The acquisition provides a number of strategic benefits
consistent with Ramsay’s growth strategy. None of the goodwill recognised is expected to be deductible for income tax purposes. Goodwill is
allocated entirely to the Nordic reporting segment in Note 1.
The fair value of the acquired receivables amounts to $31.2 million. The gross contractual amount receivable is $31.3 million.
From the date of acquisition to 30 June 2022, GHP contributed $45.4 million of revenue and $2.8 million to profit before interest and tax
from continuing operations of the Group. If the combination had taken place at the beginning of the year, 1 July 2021, revenue from continuing
operations would have been $272.4 million and profit before interest and tax from continuing operations for the Group would have been
$16.1 million.
102
Annual Report 2022
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
10 Business combinations (Continued)
Other Business Combinations – 2022
Other than the two major acquisitions above, Ramsay also acquired certain businesses in Europe in the year to 30 June 2022. The summarised
amounts for these other business combinations for the year ended 30 June 2022 are shown below and have been determined on a provisional
basis only. These businesses are all within the healthcare sector.
Assets
Liabilities
Fair value of identifiable net assets
Goodwill arising
Business combination date fair value of consideration transferred
The cash outflow as a result of the business combinations is as follows:
Cash paid in 2022
Net cash acquired with the subsidiary
Net consolidated cash outflow
Cash paid in 2022
Deferred consideration
Total consideration
$m
77.5
(48.8)
28.7
146.9
175.6
(106.3)
12.8
(93.5)
106.3
69.3
175.6
Business Combinations – 2021
Ramsay has recognised amounts for business combinations in the financial statements for the year ended 30 June 2021 which are as follows:
Assets
Liabilities
Fair value of identifiable net assets
Goodwill arising
Business combination date fair value of consideration transferred
The cash outflow as a result of the business combinations is as follows:
Cash paid
Net cash acquired with the subsidiary
Net consolidated cash outflow
$m
58.7
(53.0)
5.7
108.2
113.9
(113.9)
23.8
(90.1)
The purchase price accounting has now been finalised. There was not a material difference in the provisional fair values initially recognised.
These businesses are within the healthcare sector.
Annual Report 2022
103
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
10 Business combinations (Continued)
Accounting Policies
Business combinations are accounted for using the acquisition method. The consideration transferred in a business combination is
measured at fair value and is calculated as the sum of the business combination date fair values of the assets transferred by the acquirer,
the liabilities incurred by the acquirer to former owners of the acquiree and the equity issued by the acquirer, and the amount of any
non-controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree
either at fair value or at the proportionate share of the acquiree's identifiable net assets. Business combination related costs are expensed
as incurred.
In accounting for a business combination, the Group assesses the financial assets and liabilities assumed for appropriate classification
and designation in accordance with the contractual terms, economic conditions, the Group’s operating or accounting policies and other
pertinent conditions as at the business combination date. This includes the separation of embedded derivatives in host contracts by
the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the business combination date.
Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of AASB 9 Financial
Instruments, is measured at fair value with changes in fair value recognised in profit or loss. If the contingent consideration is not within the
scope of AASB 9, it is measured in accordance with the appropriate standard. Contingent consideration that is classified as equity is not
remeasured and subsequent settlement is accounted for within equity.
Key Accounting Judgements, Estimates and Assumptions
The Group recognises the identifiable assets and liabilities of businesses at their business combination date fair values, except for lease
liabilities and right of use assets, which are measured at the present value of the remaining lease payments as if the acquired lease were
a new lease at the acquisition date and where the right of use asset is further adjusted for favourable and unfavourable terms. Where a
significant amount of freehold land and buildings are recognised in the business combination, the fair value is determined by an external
valuer using an approach relevant to the market in that country.
104
Annual Report 2022
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
11 Property, plant and equipment
Property, plant and equipment represents the investment by the Group in tangible assets such as land, buildings, hospital fit-outs
and medical equipment.
30 June 2022
Cost
Accumulated depreciation and impairment
Movement:
As at 1 July 2021
Additions
Transferred from assets under construction
Business combinations
Reclassification (Note 12, Note 13)
Depreciation
Impairment
Disposals
Exchange differences
As at 30 June 2022
30 June 2021
Cost
Accumulated depreciation and impairment
Movement:
As at 1 July 2020
Additions
Transferred from assets under construction
Business combinations
Reclassification (Note 13)
Depreciation
Impairment
Disposals
Exchange differences
As at 30 June 2021
30 June 2020
Cost
Accumulated depreciation and impairment
Land &
Buildings
$m
Plant &
Equipment
$m
Assets Under
Construction
$m
Total
$m
4,132.5
(906.2)
3,226.3
3,035.6
119.9
132.6
184.8
1.8
(154.8)
(5.3)
(23.1)
(65.2)
3,226.3
3,854.2
(818.6)
3,035.6
3,007.0
93.4
143.4
2.8
-
(145.5)
(18.3)
(17.0)
(30.2)
3,035.6
3,820.0
(813.0)
3,007.0
2,937.8
(1,884.8)
1,053.0
953.3
317.4
97.8
50.4
(9.4)
(309.9)
-
(16.0)
(30.6)
1,053.0
2,744.8
(1,791.5)
953.3
952.8
216.7
88.9
6.3
3.6
(292.3)
(3.2)
(12.6)
(6.9)
953.3
2,583.8
(1,631.0)
952.8
527.6
-
527.6
499.7
240.7
(230.4)
37.7
(4.1)
-
-
(8.1)
(7.9)
527.6
499.7
-
499.7
487.4
274.2
(232.3)
-
(24.4)
-
-
(3.8)
(1.4)
499.7
487.4
-
487.4
7,597.9
(2,791.0)
4,806.9
4,488.6
678.0
-
272.9
(11.7)
(464.7)
(5.3)
(47.2)
(103.7)
4,806.9
7,098.7
(2,610.1)
4,488.6
4,447.2
584.3
-
9.1
(20.8)
(437.8)
(21.5)
(33.4)
(38.5)
4,488.6
6,891.2
(2,444.0)
4,447.2
Annual Report 2022
105
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
11 Property, plant and equipment (Continued)
Accounting Policies
Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such cost includes
the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred.
Depreciation is calculated, consistent with the prior year, on a straight-line basis over the estimated useful life of the assets as follows:
• Buildings and integral plant – 40 to 60 years
• Plant and equipment, other than plant integral to buildings – various periods not exceeding 10 years
The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year end.
IMPAIRMENT
The carrying values of property, plant and equipment are reviewed for impairment at each reporting date, with the recoverable amount
being estimated when events or changes in circumstances indicate that the carrying value may be impaired. The recoverable amount of
property, plant and equipment is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the cash-generating unit to
which the asset belongs, unless the asset's value in use can be estimated to be close to its fair value.
An impairment exists when the carrying value of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset or
cash-generating unit is then written down to its recoverable amount.
Impairment losses are recognised in the Income Statement in the expense category 'depreciation, amortisation and impairment'.
An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses
may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised
impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since
the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That
increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss
been recognised for the asset in prior years. Such reversal is recognised in profit or loss. After such a reversal the depreciation charge is
adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining
useful life.
DERECOGNITION & DISPOSAL
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from
its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds
and the carrying amount of the asset) is included in the Income Statement in the year the asset is derecognised.
Key Accounting Judgements, Estimates and Assumptions
Useful lives of assets are estimated based on historical experience. The useful life of assets are assessed annually and adjusted where
deemed necessary.
106
Annual Report 2022
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
12 Right of use assets
A right of use asset represents the Group’s, as a lessee, right to use an asset over the life of a lease. See note 8.c for the Group’s
lease arrangements and related lease liabilities recognised.
30 June 2022
Cost
Accumulated depreciation and impairment
Movement:
As at 1 July 2021
Additions
Business combinations
Reclassification (Note 11)
Depreciation
Reassessment of lease terms
Disposals or terminations
Exchange differences
As at 30 June 2022
30 June 2021
Cost
Accumulated depreciation and impairment
Movement:
As at 1 July 2020
Additions
Business combinations
Depreciation
Reassessment of lease terms
Disposals or terminations
Exchange differences
As at 30 June 2021
30 June 2020
Cost
Accumulated depreciation and impairment
Leased
Property
$m
Leased Plant &
Equipment
$m
Total
$m
6,117.6
(1,726.3)
4,391.3
4,189.5
218.8
512.3
0.7
(343.2)
11.3
(8.4)
(189.7)
4,391.3
5,690.5
(1,501.0)
4,189.5
4,271.8
320.9
10.9
(344.8)
62.6
(65.4)
(66.5)
4,189.5
5,445.2
(1,173.4)
4,271.8
426.8
(190.4)
236.4
222.0
91.5
-
7.3
(73.9)
-
(0.4)
(10.1)
236.4
378.5
(156.5)
222.0
206.1
88.1
0.3
(66.7)
1.7
(3.0)
(4.5)
222.0
338.3
(132.2)
206.1
6,544.4
(1,916.7)
4,627.7
4,411.5
310.3
512.3
8.0
(417.1)
11.3
(8.8)
(199.8)
4,627.7
6,069.0
(1,657.5)
4,411.5
4,477.9
409.0
11.2
(411.5)
64.3
(68.4)
(71.0)
4,411.5
5,783.5
(1,305.6)
4,477.9
Leased assets, where pledged, are used as security for the related lease liabilities. Refer note 8.c.
Annual Report 2022
107
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
13 Intangible assets
The Group’s investment in intangible assets includes goodwill, service concession assets, brand names and on
premise software.
30 June 2022
Cost
Accumulated amortisation and impairment
Movement:
As at 1 July 2021
Additions
Business combinations
Reclassification (Note 11)
Amortisation
Disposals
Impairment
Exchange differences
As at 30 June 2022
30 June 2021
Cost
Accumulated amortisation and impairment
Movement:
As at 1 July 2020
Additions
Business combinations
Reclassification (Note 11)
Amortisation
Disposals
Exchange differences
As at 30 June 2021
30 June 2020
Cost
Accumulated amortisation and impairment
Goodwill
$m
Service
Concession
Assets
$m
Other1
$m
Total
$m
5,363.8
-
5,363.8
3,766.3
-
1,796.8
-
-
(4.2)
-
(195.1)
5,363.8
3,766.3
-
3,766.3
3,783.4
-
108.2
-
-
(61.0)
(64.3)
3,766.3
3,783.4
-
3,783.4
241.3
(135.5)
105.8
99.7
0.8
35.3
4.9
(25.1)
(0.2)
-
(9.6)
105.8
220.9
(121.2)
99.7
115.5
0.6
7.6
15.1
(34.7)
-
(4.4)
99.7
216.0
(100.5)
115.5
496.0
(166.6)
329.4
367.6
31.0
1.1
(1.2)
(20.7)
(13.4)
(6.0)
(29.0)
329.4
513.6
(146.0)
367.6
347.2
46.7
0.1
5.7
(15.4)
(7.1)
(9.6)
367.6
460.1
(112.9)
347.2
6,101.1
(302.1)
5,799.0
4,233.6
31.8
1,833.2
3.7
(45.8)
(17.8)
(6.0)
(233.7)
5,799.0
4,500.8
(267.2)
4,233.6
4,246.1
47.3
115.9
20.8
(50.1)
(68.1)
(78.3)
4,233.6
4,459.5
(213.4)
4,246.1
1 Mainly brands and on-premise software costs, including both purchased and internally generated software.
108
Annual Report 2022
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
13 Intangible assets (Continued)
Accounting Policies
GOODWILL
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business combination over
the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities. The key factor contributing
to the goodwill relates to the synergies existing within the acquired businesses and also expected to be achieved as a result of combining
these facilities with the rest of the Group.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is determined to have an
indefinite life.
Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value
may be impaired.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the
Group’s cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination,
irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.
Each unit or group of units to which the goodwill is so allocated such that:
• It represents the lowest level within the Group at which the goodwill is monitored for internal management purposes; and
• Is not larger than an operating segment determined in accordance with AASB 8 Operating Segments.
Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cash-generating units), to which
the goodwill relates. When the recoverable amount of the cash-generating unit (group of cash-generating units) is less than the carrying
amount, an impairment loss is recognised. When goodwill forms part of a cash-generating unit (group of cash-generating units) and an
operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the
operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this manner is measured based on
the relative values of the operation disposed of and the portion of the cash-generating unit retained. Impairment losses recognised for
goodwill are not subsequently reversed.
SERVICE CONCESSION ASSETS
Service concession assets represent the Group’s right to operate hospitals under Service Concession Arrangements. Service concession
assets constructed by the Group are recorded at the fair value of consideration received or receivable for the construction services
delivered. Service concession assets acquired by the Group are recorded at the fair value of the assets at the date of acquisition. All
service concession assets are classified as intangible assets.
To the extent that the Group has an unconditional right to receive cash or other financial assets under the Service Concession
Arrangements a financial asset has been recognised. The financial asset is measured at fair value on initial recognition and thereafter at
amortised cost using the effective interest rate method. The financial asset will be reflected on initial recognition and thereafter as a ‘loan
or receivable’.
OTHER INTANGIBLE ASSETS
Intangible assets acquired separately are measured on initial recognition at cost. The cost of an intangible asset acquired in a business
combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any
accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets, excluding capitalised software
development costs, are not capitalised and expenditure is charged against profits in the year in which the expenditure is incurred.
The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised over the
useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired.
Amortisation is calculated, consistent with the prior year, on a straight-line basis over the estimated useful life of the assets as follows:
• Service Concession Asset – over the term of the arrangement
• Software - 2 to 10 years
The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at each financial
year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the
asset are accounted for by changing the amortisation period or method, as appropriate, which is a change in accounting estimate. The
amortisation expense on intangible assets with finite lives is recognised in the Income Statement.
Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash-generating unit level
consistent with the methodology outlined for goodwill impairment testing. Such intangibles are not amortised. The useful life of an
intangible asset with an indefinite life is reviewed each reporting period to determine whether indefinite life assessment continues to be
supportable. If not, the change in the useful life assessment from indefinite to finite is accounted for as a change in an accounting estimate
and is thus accounted for on a prospective basis.
Annual Report 2022
109
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
13 Intangible assets (Continued)
Accounting Policies
Useful lives
Amortisation method used
Service Concession Assets
Finite
Amortised over the period of
the arrangement
Brands
Software costs
Indefinite
Not applicable
Finite
Amortised over the period
of expected future benefit
from the related project on a
straight line basis
Internally generated
Internally generated
or acquired
Impairment testing
Acquired
Acquired
When an indication of
impairment exists. The
amortisation method is
reviewed at each financial
year end.
Annually or more frequently
if events or changes in
circumstances indicate that
the carrying value may
be impaired.
When an indication of
impairment exists. The
amortisation method is
reviewed at each financial
year end.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and
the carrying amount of the asset and are recognised in the Income Statement when the asset is derecognised.
Key Accounting Judgements, Estimates and Assumptions
Useful lives of assets are estimated based on historical experience and the expected period of future consumption of embodied economic
benefits. Useful lives are reviewed annually and adjustments made where deemed necessary.
110
Annual Report 2022
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
14 Impairment testing of goodwill
Goodwill arises when the Group acquires a business. It is the portion of the purchase price that is higher than the sum of the fair
value of net assets acquired, which represents the synergies expected to arise from the acquisition. Goodwill is impaired when
its historical cost exceeds its current recoverable amount.
Description of the cash generating units and other relevant information
Goodwill acquired through business combinations has been allocated in part to individual cash generating units and part to segments as
synergies are achieved from the larger Group. Management assess goodwill by aggregating cash generating units to the level of the operating
segment for purposes of impairment testing because the goodwill relates to synergies existing within the acquired business and synergies
achieved from combining acquired facilities with the rest of the Group. Goodwill is tested for impairment on an annual basis, as a minimum.
Goodwill has been allocated to the Asia Pacific operating segment, the UK operating segment, the French operating segment and the
Nordics operating segment as shown in the table below. The provisional goodwill acquired through acquisition of Elysium Healthcare and GHP
Specialty Care has not been allocated to operating segments at 30 June 2022.
2022
2021
Asia Pacific
$m
1,181.7
1,181.7
UK
$m
267.4
279.6
France
$m
1,200.8
1,250.2
Nordics
$m
1,130.1
1,054.8
Unallocated
$m
1,583.8
-
Total
$m
5,363.8
3,766.3
Key Accounting Judgements, Estimates and Assumptions
The recoverable amount of the Asia Pacific operating segment, the UK operating segment, the French operating segment and the Nordics
operating segment has been determined based on a value in use calculation using cash flow projections as at 30 June 2022 based on
financial estimates approved by senior management and the Board of Directors covering the following financial year. In determining the
2023 (year 1) cash flow projections and subsequent year growth factors, management has factored in the performance of the Group in
the current year, including the period impacted by COVID. Management currently forecasts that the Group volume and cost profiles will
return to pre-COVID levels in 2023 for all CGUs. A growth factor is then applied to the following 4 years through to the end of the value
in use models. Key assumptions used in the value in use calculations are outlined in the table below. Significant assumptions used in
the impairment testing are inherently subjective and in times of economic uncertainty, such as that, caused by the COVID pandemic, the
degree of subjectivity is higher than it might otherwise be.
Terminal growth rate (Year 5+)
2022
2021
Pre-tax discount rate
2022
2021
Asia Pacific
%
UK
%
France
%
Nordics
%
3.0
3.0
9.9
9.7
1.9
1.9
10.3
8.4
1.3
1.0
7.0
7.9
2.0
2.0
7.2
7.6
Key inputs in value in use calculations are:
• Tax rates have been estimated at 30% for Australian operations, and 25% - 34.4% for overseas operations consistent with the current
local tax legislation.
• Discount rates – discount rates reflect management’s estimate of the time value and the risks specific to each of the cash generating
units that are not already reflected in the cash flows. This is the benchmark used by management to assess operating performance and
to evaluate future investment proposals. In determining appropriate discount rates for each unit, regard has been given to the weighted
average cost of capital of the entity as a whole and adjusted for country and business risk specific to the unit.
• Growth rate estimates – they are based on management’s internal estimates of long term growth rates for each of the cash
generating units.
Management has performed sensitivity testing by CGU and on the aggregated CGUs based on assessing the effect of changes in hospital
occupancy rates, health fund rates, wage increases, revenue growth rates and discount rates.
For Asia Pacific, UK, France and the Nordics, management do not consider that any reasonably likely changes in hospital occupancy rates,
health fund rates, wage increases, revenue growth rates and discount rates would result in the carrying value of goodwill exceeding the
recoverable amount.
Annual Report 2022
111
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
15 Taxes
This note provides an analysis of the income tax expense and deferred tax balances, including a reconciliation of the tax
expense recognised, reconciled to the Group's net profit before tax at the Group's applicable tax rate. A deferred tax asset or
liability is created when there are temporary differences between the accounting profit and taxable profit, representing a future
income tax receivable or payable.
(i) Income tax expense
The major components of income tax expense are:
Current income tax
Current income tax charge
Deferred income tax
Relating to origination and reversal of temporary differences
Adjustments in respect of deferred income tax of previous years
Income tax expense reported in the Consolidated Income Statement
2022
$m
2021
$m
220.1
266.9
(58.7)
(2.1)
159.3
(31.2)
(5.6)
230.1
(ii) Numerical reconciliation between aggregate tax expense recognised in the Consolidated Income
Statement and tax expense calculated per the statutory income tax rate
A reconciliation between tax expense and the product of the accounting profit before income tax
multiplied by the Group’s applicable income tax rate is as follows:
Accounting profit before tax
At the Parent Entity’s statutory income tax rate of 30% (2021: 30%)
Expenditure not allowable for income tax purposes
Amounts not assessable for income tax purposes
Impact of changes in foreign tax rates on deferred tax balances
Other French income tax expense
Foreign tax rate adjustment due to differences in rates between Australia and Other Countries
Other
Income tax expense reported in the Consolidated Income Statement
2022
$m
2021
$m
538.5
741.6
161.5
14.7
(29.6)
(8.1)
18.4
2.8
(0.4)
159.3
222.5
26.8
(11.1)
(27.7)
18.1
12.1
(10.6)
230.1
112
Annual Report 2022
15 Taxes (Continued)
(iii) Recognised tax assets and liabilities
As at 1 July
(Charged)/credited to income
(Charged)/credited to equity
Payments
Exchange differences
Acquisitions and disposals of subsidiary
As at 30 June
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
2022
Current
income tax
$m
2022
Deferred
income tax
$m
2021
Current
income tax
$m
2021
Deferred
income tax
$m
(71.4)
(220.1)
-
229.3
4.8
(2.4)
(59.8)
222.1
60.8
(0.8)
-
(4.3)
(106.3)
171.5
(34.8)
(266.9)
-
228.2
1.6
0.5
(71.4)
178.4
36.8
4.8
-
0.9
1.2
222.1
Statement of Financial Position
2022
$m
2021
$m
Amounts recognised in the Statement of Financial Position for Deferred Income Tax at 30 June:
Deferred tax liabilities
Inventory
Deferred revenue
Depreciable assets
Other provisions and lease liabilities
Gross deferred tax liabilities
Set-off of deferred tax assets
Net deferred tax liabilities
Deferred tax assets
Employee provisions
Other provisions and lease liabilities
Unearned income
Losses
Derivatives
Gross deferred tax assets
Set-off of deferred tax liabilities
Net deferred tax assets
(28.6)
(17.4)
(178.6)
(150.0)
(374.6)
67.4
(307.2)
182.6
299.2
23.7
35.1
5.5
546.1
(67.4)
478.7
(20.5)
(17.4)
(124.6)
(133.4)
(295.9)
60.4
(235.5)
201.5
243.1
6.6
55.4
11.4
518.0
(60.4)
457.6
(iv) Tax consolidation
Ramsay Health Care Limited and its 100% owned Australian resident subsidiaries formed a tax consolidated group effective 1 July 2003.
Ramsay Health Care Limited is the head entity of the tax consolidated group. Members of the group have entered into a tax funding and
sharing arrangement in order to allocate income tax expense to the wholly owned subsidiaries using a group allocation method on a modified
standalone basis. In addition, the agreement provides for the allocation of income tax liabilities between the entities should the head entity
default on its tax payment obligations. No amounts have been recognised in the financial statements in respect of this agreement on the basis
that the possibility of default is remote.
TAX EFFECT ACCOUNTING BY MEMBERS OF THE TAX CONSOLIDATED GROUP
Members of the tax consolidated group have entered into a tax funding agreement. The tax funding agreement provides for the allocation of
current and deferred taxes using a group allocation method, on a modified standalone basis in accordance with the principles of AASB 112
Income Taxes. Allocations under the tax funding agreement are made every six months.
The allocation of taxes under the tax funding agreement is recognised as an increase/decrease in the subsidiaries' inter-company accounts
with the tax consolidated group head company. There is no difference between the current and deferred tax amounts allocated under the tax
funding agreement and the amount subsequently charged to the subsidiary. Therefore, there is no contribution/distribution of the subsidiaries'
equity accounts.
As a result of tax consolidation, intercompany assets of Ramsay Health Care Limited have decreased by $20.0 million (2021: increased by
$9.7 million). This is included in the summarised information relating to Ramsay Health Care Limited. Refer to Note 25.
TAX LOSSES
At 30 June 2022, there were nil (2021: nil) losses carried forward and therefore no resulting deferred tax asset has been recognised.
Annual Report 2022
113
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
15 Taxes (Continued)
Accounting Policies
INCOME TAX
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to
the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by
the reporting date.
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
• when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a
business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
• when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the
timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in
the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax
losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the
carry-forward of unused tax credits and unused tax losses can be utilised, except:
• when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or
liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; or
• when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in
which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the
foreseeable future and taxable profit will be available against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent that it has become
probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or
the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the Income Statement.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against
current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.
OTHER TAXES
Revenues, expenses and assets are recognised net of the amount of GST except:
• where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is
recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
• receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the
Statement of Financial Position.
Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows arising from investing and
financing activities which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.
Key Accounting Judgements, Estimates and Assumptions
In determining the Group’s deferred tax assets and liabilities, management is required to make an estimate about the availability of
future taxable profits and cash flows. Changes in circumstances will alter expectations, which may impact the amount of tax losses and
temporary differences recognised.
114
Annual Report 2022
16 Other assets/liabilities (net)
Prepayments – current and non-current
Other assets – current
Other financial assets – non-current
Investments in joint venture
Other receivables – non-current
Provisions – current and non-current
Defined employee benefit obligation
Other creditors – non-current
16.a Other current assets
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
Note
16.a
16.b
9.a
16.c
16.e
2022
$m
2021
$m
197.1
24.5
100.8
238.1
79.0
(537.0)
(157.8)
(98.6)
(153.9)
143.9
1,982.4
82.9
217.5
70.6
(571.3)
(249.1)
(30.7)
1,646.2
Other current assets relate to non-trade amounts owned by the Group which are due or receivable within 12 months.
Business combination amounts held in escrow
Other current assets
Total
2022
$m
-
24.5
24.5
2021
$m
1,958.1
24.3
1,982.4
The business combination amounts held in escrow, as at 30 June 2021, were governed by the escrow agreement between Ramsay and third
parties for the Spire Healthcare Group PLC (Spire) acquisition.
The proposed Spire acquisition did not proceed and as a result, the amounts held in escrow of $1,958.1 million at 30 June 2021 were released
and used to pay down loans and borrowings of the Group.
Annual Report 2022
115
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
16 Other assets/liabilities (net) (Continued)
16.b Investments in joint venture
A joint venture (JV) is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to
the net assets of the joint venture. The Group has a 50% interest in Ramsay Sime Darby Health Care Sdn Bhd (RSDH) (Malaysia
registered company) and a 50% interest in Ascension Ramsay Global Sourcing Limited (UK registered company).
The Group has a 50% interest in RSDH, a joint venture involved in operating hospitals and day surgery facilities across Malaysia, Indonesia and
Hong Kong, and a 50% interest in Ascension Ramsay Global Sourcing Limited. The Group’s interest in joint venture is accounted for using the
equity method in the consolidated financial statements.
As at 1 July
Share of profit of joint venture
Dividend income received
Foreign currency translation and other equity movements
As at 30 June
Accounting Policies
2022
$m
2021
$m
217.5
15.5
-
5.1
238.1
245.8
10.9
(24.9)
(14.3)
217.5
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets
of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about
the relevant activities require unanimous consent of the parties sharing control.
The considerations made in determining significant influence or joint control are similar to those necessary to determine control
over subsidiaries.
The Group’s investment in a joint venture is accounted for using the equity method. Under the equity method, the investment in a joint
venture is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group’s share of
net assets of the joint venture since the acquisition date. Goodwill relating to the joint venture is included in the carrying amount of the
investment and is neither amortised nor individually tested for impairment.
The Income Statement reflects the Group’s share of the results of operations of the joint venture. Any change in OCI of those investees is
presented as part of the Group’s OCI. In addition, when there has been a change recognised directly in the equity of the joint venture, the
Group recognises its share of any changes, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting
from transactions between the Group and the joint venture are eliminated to the extent of the interest in the joint venture.
The aggregate of the Group’s share of profit or loss of a joint venture is shown on the face of the Income Statement and represents profit
or loss after tax and non-controlling interests in the subsidiaries of the joint venture.
The financial statements of the joint venture are prepared for the same reporting period as the Group. When necessary, adjustments are
made to bring the accounting policies in line with those of the Group.
After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment
in the joint venture. At each reporting date, the Group determines whether there is objective evidence that the investment in the joint
venture is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable
amount of the joint venture and its carrying value, then recognises the loss as ‘Share of profit of joint venture’ in the Income Statement.
Upon loss of joint control over the joint venture, the Group measures and recognises any retained investment at its fair value. Any
difference between the carrying amount of the joint venture upon loss of joint control and the fair value of the retained investment and
proceeds from disposal is recognised in profit or loss.
116
Annual Report 2022
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
16 Other assets/liabilities (net) (Continued)
16.c Provisions
A provision is a liability with uncertain timing and amount, but the expected settlement amount can be reliably estimated by
the Group. The main provisions held are in relation to insurance, restructuring, legal obligations, unfavourable contracts and
employee benefits.
Current
Restructuring provision
Unfavourable contracts
Insurance provision
Legal and compliance provision
Other provisions
Non-current
Employee and Director entitlements
Unfavourable contracts
Insurance provision
Restructuring provision
Legal and compliance provision
Other provisions
Total
Movements in provisions
2022
$m
2021
$m
19.8
3.4
18.3
83.8
54.9
180.2
39.7
40.6
67.7
32.7
162.4
13.7
356.8
537.0
14.4
3.8
19.3
89.5
58.0
185.0
42.3
45.7
71.3
63.2
156.4
7.4
386.3
571.3
As at 1 July 2021
Business combinations
Arising during the year
Utilised during the year
Unused amounts reversed
Exchange differences
As at 30 June 2022
Current 2022
Non-current 2022
Current 2021
Non-current 2021
Restructuring
$m
Insurance
$m
Unfavourable
Contracts
$m
Legal and
Compliance
$m
Other
Provisions
$m
Total
$m
77.6
5.4
12.6
(15.6)
(24.8)
(2.7)
52.5
19.8
32.7
52.5
14.4
63.2
77.6
90.6
-
10.4
(7.6)
(7.0)
(0.4)
86.0
18.3
67.7
86.0
19.3
71.3
90.6
49.5
-
-
(3.4)
(0.3)
(1.8)
44.0
3.4
40.6
44.0
3.8
45.7
49.5
245.9
1.3
56.9
(40.4)
(9.9)
(7.6)
246.2
83.8
162.4
246.2
89.5
156.4
245.9
65.4
10.7
68.2
(66.5)
(5.5)
(3.7)
68.6
54.9
13.7
68.6
58.0
7.4
65.4
529.0
17.4
148.1
(133.5)
(47.5)
(16.2)
497.3
180.2
317.1
497.3
185.0
344.0
529.0
Annual Report 2022
117
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
16 Other assets/liabilities (net) (Continued)
Nature and timing of provisions
RESTRUCTURING PROVISION
The restructuring provision primarily relates to:
• the restructuring of the Group subsequent to acquisitions. Provisions are made in the year the restructuring plans are drawn up and
announced to employees; and
• restructuring of entities with the Group.
INSURANCE PROVISION
Insurance policies are entered into to cover the various insurable risks. These policies have varying levels of deductibles. The medical
malpractice provision is made to cover deductibles arising under the Medical Malpractice Insurance policy, including potential uninsured and
‘Incurred but not Reported’ claims.
EMPLOYEE LEAVE BENEFITS
Wages, salaries, and annual leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the reporting
date are recognised in 'Trade and other creditors' in respect of employees' services up to the reporting date. They are measured at the
amounts expected to be paid when the liabilities are settled.
Long service leave
The liability for long service leave is recognised in the provision for employee entitlements and measured as the present value of expected
future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method.
Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of service. Expected future
payments are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and currencies that
match, as closely as possible, the estimated future cash outflows.
UNFAVOURABLE CONTRACTS
This provision consists of VAT and other taxes payable on impaired right of use assets for certain leases.
LEGAL AND COMPLIANCE PROVISION
The legal and compliance provision primarily relates to amounts provided for litigation that is currently in the court process or a matter under
review by a relevant authority.
Accounting Policies
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that
an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation.
Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is
recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in
the Income Statement net of any reimbursement.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax
rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where
discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Key Accounting Judgements, Estimates and Assumptions
The insurance provision is actuarially assessed at each reporting period using a probability of sufficiency between 80% - 95% based
on differing exposures to risk. The greatest uncertainty in estimating the provision is the costs that will ultimately be incurred which is
estimated using historical claims, market information and other actuarial assessments. Included in the insurance provision is an amount for
claiming handling expenses at between 5%-10% of the estimated Ramsay claim cost.
16.d Superannuation commitments
The Group contributes to industry and individual superannuation funds established for the provision of benefits to employees of entities within
the economic entity on retirement, death or disability. Benefits provided under these plans are based on contributions for each employee and
for retirement are equivalent to accumulated contributions and earnings. All death and disability benefits are insured with various life insurance
companies. The entity contributes to the funds at various agreed contribution levels, which are not less than the statutory minimum.
118
Annual Report 2022
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
16 Other assets/liabilities (net) (Continued)
16.e Defined employee benefit obligation
A defined benefit plan is an employer-based program that pays retirement benefits based on a predetermined formula such as
the employee’s length of employment, age and salary history. The Group has a defined employee benefit obligation in France as
required to be paid under local legislation. There is also a defined benefit obligation in the Nordics.
In contrast to a defined contribution plan, the employer, not the employee, is responsible for all of the planning and investment risk of a
defined benefit plan. The Group has a defined contribution obligation in other jurisdictions. Refer Note 16.d.
The following tables summarise the funded status and amounts recognised in the consolidated Statement of Financial Position for the plans:
Net (liability) included in the Statement of
Financial Position
Present value of defined benefit obligation
Fair value of plans assets
Net (liability) – non-current
2022
$m
2021
$m
2020
$m
2019
$m
2018
$m
(386.6)
228.8
(157.8)
(473.5)
224.4
(249.1)
(418.4)
195.5
(222.9)
(389.9)
174.6
(215.3)
(85.7)
5.3
(80.4)
Net expense for the defined employee benefit obligation (Note 3) (recognised in
superannuation expenses)
Changes in the present value of the defined benefit obligation are as follows:
As at 1 July
Business combinations
Current service cost
Finance cost
Benefits paid
Actuarial gains/(losses)
Exchange differences on foreign plans
As at 30 June
Changes in the fair value of plan assets are as follows:
As at 1 July
Expected return
Contributions by employer
Benefits paid
Actuarial gains
Exchange differences on foreign plans
As at 30 June
2022
$m
2021
$m
28.8
21.1
2022
$m
2021
$m
(473.5)
-
(24.0)
(5.7)
11.4
71.4
33.8
(386.6)
224.4
3.4
16.8
(3.7)
9.1
(21.2)
228.8
(418.4)
(1.3)
(18.5)
(5.1)
14.1
(51.1)
6.8
(473.5)
195.5
2.5
17.5
(3.7)
11.4
1.2
224.4
Actuarial return on plan assets
3.4
2.5
Annual Report 2022
119
Notes to the Financial Statements
Assets and Liabilities – Operating and Investing
Ramsay Health Care Limited
16 Other assets/liabilities (net) (Continued)
Plan assets are invested as follows:
Equities
Bonds
Property
Other
The Group expects to contribute nil to its defined benefit obligations in 2023.
Actuarial (gains)/losses recognised in the Statement of Comprehensive Income
Cumulative actuarial losses recognised in the Statement of Comprehensive Income
2022
%
2021
%
28.9
40.3
10.4
20.4
27.8
46.1
8.3
17.8
2022
$m
(80.5)
61.8
2021
$m
39.7
142.3
The principal actuarial assumptions used in determining obligations for the liabilities are shown below (expressed as weighted averages):
Discount rate
Future salary increases
Future pension increases
Accounting Policies
2022
%
3.1 to 3.4
1.8 to 3.4
1.0 to 2.0
2021
%
0.9 to 2.0
1.0 to 2.9
1.0 to 2.0
The Group has defined employee benefit obligations in the Nordics and in France, arising from local legislative requirements.
The cost of providing benefits under these obligations are determined using the projected unit credit method using actuarial valuations.
Actuarial gains and losses for the defined obligation are recognised in full in the period in which they occur in Other Comprehensive
Income. Such actuarial gains and losses are also immediately recognised in retained earnings and are not reclassified to profit or loss in
subsequent periods.
Unvested past service costs are recognised as an expense on a straight line basis over the average period until the benefits become
vested. Past service costs are recognised immediately if the benefits have already vested, immediately following the introduction of, or
changes to, the obligation.
The defined benefit liability comprises the present value of the defined benefit obligation (using a discount rate based on corporate
bonds) less unrecognised past service costs.
Key Accounting Judgements, Estimates and Assumptions
The actuarial valuation involves making assumptions about discount rates, future salary increases and mortality rates. All assumptions are
reviewed at each reporting date. In determining the appropriate discount rates, the interest rates of corporate bonds in France and the
Nordics is considered. The mortality rate is based on publicly available mortality rates for France and the Nordics. Future salary increases
are based on expected future inflation rates in France and the Nordics.
120
Annual Report 2022
Notes to the Financial Statements
Risk Management
Ramsay Health Care Limited
IV Risk Management
This section discusses the Group’s exposure to various risks and shows how these could affect the Group’s financial position
and performance.
17 Financial risk management
This note provides a summary of the Group’s exposure to key financial risks, including interest rate, foreign currency, credit and
liquidity risks, along with the Group’s policies and strategies to mitigate these risks. There have been no material changes to our
risk management policies since 1 July 2021.
Primary responsibility for identification and control of financial risks rests with the Audit Committee under the authority of the Board. The Board
reviews and agrees policies for managing each of the risks identified below, including the setting of limits for trading in derivatives, hedging
cover of foreign currency and interest rate risk, credit allowances, and future cash flow forecast projections.
The Group's principal financial instruments comprise receivables, payables, bank loans and overdrafts, cash and short-term deposits,
derivatives, and other financial assets.
The Group manages its exposure to key financial risks, including market risk (interest rate and foreign currency risk), credit risk and liquidity risk
in accordance with the Group's financial risk management policy. The objective of the policy is to support the delivery of the Group's financial
targets whilst protecting future financial security.
The Group enters into derivative transactions, principally interest rate swap contracts and foreign exchange forward contracts. The purpose
is to manage the interest rate and currency risks arising from the Group's operations and its sources of finance. The main risks arising from
the Group's financial instruments are interest rate risk, foreign currency risk, credit risk and liquidity risk. The Group uses different methods to
measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rate and foreign
exchange risk and assessments of market forecasts for interest rate and foreign exchange. Ageing analyses and monitoring of specific credit
allowances are undertaken to manage credit risk and liquidity risk is monitored through the development of future rolling cash flow forecasts.
The Group has entered into Syndicated Facility Agreements with its Banks. The Syndicated Facility Agreements are with prime financial
institutions. By entering into Syndicated Facility Agreements with a number of financial institutions in addition to Bilateral Facility Agreements,
the Group has reduced its counterparty risk.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates.
The Group's exposure to market interest rates relates primarily to the Group's long-term debt obligations with floating interest rates. The level of
debt is disclosed in Note 8.b.
At reporting date, the Group had the following mix of financial assets and liabilities exposed to variable interest rate risk that are not designated
in cash flow hedges:
Financial Assets
Cash and cash equivalents
Business combination amounts held in escrow
Financial Liabilities
Bank Loans
Net exposure
2022
$m
2021
$m
314.2
-
314.2
(4,146.7)
(3,832.5)
1,004.8
1,958.1
2,962.9
(3,070.2)
(107.3)
Interest rate derivatives contracts are outlined in Note 8.d, with a net positive fair value of $54.3 million (2021: negative $38.1 million) which are
exposed to fair value movements if interest rates change.
Annual Report 2022
121
Notes to the Financial Statements
Risk Management
Ramsay Health Care Limited
17 Financial risk management (Continued)
Interest rate sensitivity
The following sensitivity analysis has been determined based on the exposure to interest rates for both derivative and non-derivative
instruments at the end of the reporting period and the stipulated change taking place at the beginning of the financial year and held constant
throughout the reporting period.
At the end of the reporting period, as specified in the following table, if the interest rates had been higher or lower than the year end rates
and all other variables were held constant, the consolidated entity’s post tax profit and Other Comprehensive Income would have been affected
as follows:
Judgements of reasonably possible movements:
AUD
+100 basis points (2021: +60 basis points)
-100 basis points (2021: -60 basis points)
GBP
+100 basis points (2021: +50 basis points)
-100 basis points (2021: -50 basis points)
EUR
+20 basis points (2021: +30 basis points)
-20 basis points (2021: -30 basis points)
Post Tax Profit
Higher/(Lower)
Other Comprehensive Income
Higher/(Lower)
2022
$m
2021
$m
2022
$m
2021
$m
(8.7)
8.7
0.5
(0.5)
(1.2)
1.2
(3.5)
3.5
2.2
(2.2)
14.3
(12.5)
11.8
(12.2)
-1
-1
-1
-1
1.4
(1.1)
-1
-1
-1
-1
1 There were no outstanding interest rate derivative contracts which have been designated as effective hedges at the year end.
The assumed movement in basis points for the interest rate sensitivity analysis is based on the interest rate volatility observed during the
relevant financial year. The change in sensitivity applied for 2022, versus 2021, is due to the change in interest rate volatilities applicable
to 2022.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign
exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities
(when revenue or expense is denominated in a different currency from the functional currency).
The Group manages its foreign exchange rate exposure within approved policy parameters by utilising foreign currency swaps and forwards.
When a derivative is entered into for the purpose of being a hedging instrument, the Group negotiates the terms of those derivatives to
match the terms of the hedged exposure. For hedges of forecast transactions, the derivatives cover the period of exposure from the point
the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in
foreign currency.
Foreign currency sensitivity
The following tables demonstrate the sensitivity to a reasonably possible change in GBP, Euro and MYR exchange rates, with all other variables
held constant. The impact on the Group’s post tax profit is due to changes in the fair value of monetary assets and liabilities including
non-designated foreign currency derivatives and embedded derivatives. The impact on the Group’s equity is due to changes in the fair value
of forward exchange contracts designated as cash flow hedges. The Group’s exposure to foreign currency changes for all other currencies is
not material.
British Pound (GBP)
+20% (2021: +15%)
-20% (2021: -15%)
Euro (EUR)
+20% (2021: +15%)
-20% (2021: -15%)
Malaysian Ringgit (MYR)
+20% (2021: +15%)
-20% (2021: -15%)
Post Tax Profit
Higher/(Lower)
Other Comprehensive Income
Higher/(Lower)
2022
$m
2021
$m
2022
$m
2021
$m
-
-
-
-
-
-
(0.1)
0.1
-
-
-
-
-
-
-
-
-
-
(55.2)
74.6
(110.6)
149.5
(28.7)
38.8
The movement in the post-tax profit amounts is a result of a change in the fair value of derivative financial instruments not designated in
a hedge relationship and monetary assets and liabilities denominated in foreign currencies, where the functional currency of the entity is a
currency other than the above currencies. Although the derivatives have not been designated in a hedge relationship, they act as an economic
hedge and will offset the underlying transactions when they occur.
122
Annual Report 2022
Notes to the Financial Statements
Risk Management
Ramsay Health Care Limited
17 Financial risk management (Continued)
Credit risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents, trade and other receivables, derivative
instruments and other financial instruments. The Group's exposure to credit risk arises from potential default of the counter party, with a
maximum exposure equal to the carrying amount of these instruments. Exposure at reporting date is addressed in each applicable note.
Trade receivables
The Group trades only with recognised, creditworthy third parties, and as such collateral is not requested nor is it the Group's policy to
securitise its trade and other receivables. The majority of transactions are with the Governments and Health Funds.
The Group’s credit policy requires all debtors to pay in accordance with agreed terms. The payment terms for the major debtors range from 15
days to 30 days.
Collectability of trade receivables is reviewed on an ongoing basis at an operating unit level. Individual debts that are known to be
uncollectable are written off when identified. An impairment provision is recognised based on expected credit loss where the Group measures
the impairment using a lifetime expected loss allowance for all trade receivables. Financial difficulties of the debtor, default payments or debts
more than 60 days overdue are considered in default. The amount of the impairment loss is the receivable carrying amount compared to the
present value of estimated future cash flows, discounted at the original effective interest rate.
The Group’s credit risk is spread across a number of Health Funds and Governments. Whilst the Group does have significant credit risk
exposure to a single debtor or group of related debtors, the credit quality of these debtors is considered high, as they are either Health Funds,
governed by the prudential requirements of APRA, or Governments.
The credit quality of financial assets that are neither past due nor impaired is considered to be high, due to the absence of defaults, and the
fact that the Group deals with creditworthy Health Funds and the Governments. Management has also put in place procedures to constantly
monitor the exposures in order to manage its credit risk.
Financial instruments and cash deposits
Credit risks related to balances with banks and financial institutions are managed by Ramsay Group Treasury in accordance with Board
approved policies. Such policies only allow financial derivative instruments to be entered into with high credit quality financial institutions with a
minimum long-term credit rating of A- or better by Standard & Poor’s. In addition, the Board has approved the use of these financial institutions,
and specific internal guidelines have been established with regard to limits, dealing and settlement procedures. Limits are set to minimise the
concentration of risks and therefore mitigate financial loss through potential counterparty failure. The investment of surplus funds is made only
with approved counterparties and within credit risk in relation to derivatives undertaken in accordance with the consolidated entity’s hedging
and risk management activities.
The Group does not hold any credit derivatives to off-set its credit risk exposure. The Group’s maximum exposure for financial derivative
instruments is noted in the liquidity table below.
Annual Report 2022
123
Notes to the Financial Statements
Risk Management
Ramsay Health Care Limited
17 Financial risk management (Continued)
Liquidity risk
Liquidity risk arises from the financial liabilities of the Group and the Group’s subsequent ability to meet their obligations to repay their financial
liabilities as and when they fall due.
The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans,
bonds and leases.
To monitor existing financial assets and liabilities as well as to enable an effective controlling of future risks, Ramsay has established
management reporting covering its worldwide business units that reflects expectations of management’s expected settlement of financial
assets and liabilities.
The Group continually reviews its liquidity position including cash flow forecasts to determine the forecast liquidity position and maintain
appropriate liquidity levels.
The table below summarises the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments.
As at 30 June 2022
Trade and other liabilities
Loans and borrowings
Lease liabilities
Financial derivatives1
As at 30 June 2021
Trade and other liabilities
Loans and borrowings
Lease liabilities
Financial derivatives
Less than 3
months
$m
3 to 12 months
$m
1 to 5 years
$m
> 5 years
$m
Total
$m
(3,027.3)
(26.5)
(149.2)
-
(3,203.0)
(2,998.8)
(23.9)
(150.8)
(4.6)
(3,178.1)
-
(170.9)
(447.7)
-
(618.6)
-
(104.3)
(452.4)
(13.3)
(570.0)
-
(5,024.3)
(1,504.3)
-
(6,528.6)
-
(4,007.6)
(1,737.3)
(23.1)
(5,768.0)
-
(264.7)
(6,549.5)
-
(6,814.2)
-
(1,613.2)
(5,174.0)
-
(6,787.2)
(3,027.3)
(5,486.4)
(8,650.7)
-
(17,164.4)
(2,998.8)
(5,749.0)
(7,514.5)
(41.0)
(16,303.3)
1 Derivatives in the current financial year are a financial asset based on current market rates. Hence they are not included in the liquidity risk table above.
The disclosed financial derivative instruments in the above table are the net undiscounted cash flows. However, those amounts may be settled
gross or net. The following table shows the corresponding reconciliation of those amounts to their carrying amounts.
As at 30 June 20221
Inflows
Outflows
Net
Discounted at the applicable interbank rates
As at 30 June 2021
Inflows
Outflows
Net
Discounted at the applicable interbank rates
Less than 3
months
$m
3 to 12 months
$m
1 to 5 years
$m
> 5 years
$m
Total
$m
-
-
-
-
-
(4.6)
(4.6)
(1.6)
-
-
-
-
0.1
(13.4)
(13.3)
(13.3)
-
-
-
-
1.6
(24.7)
(23.1)
(23.2)
-
-
-
-
-
-
-
-
-
-
-
-
1.7
(42.7)
(41.0)
(38.1)
1 Derivatives in the current financial year are a financial asset based on current market rates. Hence they are not included in the liquidity risk table above.
124
Annual Report 2022
Notes to the Financial Statements
Other Information
Ramsay Health Care Limited
V Other Information
This section includes other information that must be disclosed to comply with the accounting standards and other
pronouncements, but that is not immediately related to individual line items in the financial statements.
18 Share based payment plans
A share based payment is a transaction in which the Group receives goods or services in exchange for rights to its own shares.
Ramsay operates a performance rights scheme, where share rights may be issued to eligible employees.
An executive performance rights scheme was established in January 2004 where Ramsay Health Care Limited may, at the discretion of the
Board, grant rights over the ordinary shares of Ramsay Health Care Limited to executives of the consolidated entity. The rights are issued for nil
consideration and are granted in accordance with the plan’s guidelines established by the Directors of Ramsay Health Care Limited. The rights
cannot be transferred and will not be quoted on the ASX. Non-executive directors are not eligible for this plan.
Information with respect to the number of rights granted under the Executive Performance Rights Plan is as follows:
Balance at beginning of year
granted
vested
forfeited
Balance at end of year
Exercisable at end of year
2022
2021
Number of
Rights
1,044,337
220,614
(29,042)
(602,745)
633,164
-
Weighted
Average Fair
Value
$53.30
$66.22
$40.30
Weighted
Average Fair
Value
$43.30
$68.22
$56.17
Number of
Rights
1,277,546
246,907
(7,505)
(472,611)
1,044,337
-
The following table summarises information about rights held by participants in the Executive Performance Rights Plan as at 30 June 2022:
Number of Rights
99,934
102,161
7,687
104,212
104,227
107,471
107,472
633,164
Grant Date
15-Nov-19
15-Nov-19
20-Apr-20
15-Dec-20
15-Dec-20
15-Dec-21
15-Dec-21
Vesting Date1
31-Aug-22
31-Aug-22
20-Apr-23
31-Aug-23
31-Aug-23
31-Aug-24
31-Aug-24
Weighted
Average
Fair Value2
$33.36
$68.62
$65.05
$27.14
$59.45
$42.05
$64.55
1 The vesting date shown is the most likely vesting date subject to full satisfaction of the respective performance conditions.
2 Fair value at grant date
Annual Report 2022
125
Notes to the Financial Statements
Other Information
Ramsay Health Care Limited
18 Share based payment plans (Continued)
Accounting Policies
The Group provides benefits to employees (including Executive Directors) of the Group in the form of share-based payment transactions,
whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).
There is currently one plan in place to provide these benefits, being the Executive Performance Rights Plan (Equity-settled transactions),
which provides benefits to senior executives and Directors.
The cost of these equity settled transactions with employees is measured by reference to the fair value at the date at which they were
granted. The fair value is determined by an external valuer using the Monte Carlo or the Black Scholes models.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the
shares of Ramsay Health Care Limited (market conditions).
EQUITY-SETTLED TRANSACTIONS
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity (Share Based Payment Reserve),
over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully
entitled to the award (vesting date).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:
• The extent to which the vesting period has expired and
• The number of awards that, in the opinion of the Directors of the Group, will ultimately vest. This opinion is formed based on the best
available information at reporting date.
No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the
determination of fair value at grant date.
TREASURY SHARES
Shares in the Group held by the Executive Performance Rights Plan are classified and disclosed as Treasury shares and deducted
from equity.
Key Accounting Judgements, Estimates and Assumptions
Performance rights are issued for nil consideration and are granted in accordance with the plan’s guidelines established by the Directors
of Ramsay Health Care Limited.
The fair value of share rights with TSR performance conditions (market based conditions) are estimated on the date of grant using a
Monte Carlo model. The fair value of share rights with non-market performance conditions are estimated at the date of grant using the
Black Scholes Option Pricing model. The following weighted average assumptions were used for grants made on 15 November 2019,
15 December 2020 and 15 December 2021:
Dividend yield
Expected volatility
Risk-free interest rate
Effective life of incentive right
Granted
15-Dec-21
2.21%
29.56%
0.86%
3 years
Granted
15-Dec-20
2.40%
30.32%
0.10%
3 years
Granted
15-Nov-19
2.31%
22.50%
0.75%
3 years
The expected volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any expected changes to
future volatility due to publicly available information.
The dividend yield reflects the assumption that the current dividend payout will continue with no anticipated increases. The expected life
of the rights is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects
the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.
126
Annual Report 2022
Notes to the Financial Statements
Other Information
Ramsay Health Care Limited
19 Capital commitments and contingent liabilities
Capital commitments are the Group's contractual obligation to make future payments in relation to purchases of assets.
Contingent liabilities are possible future cash payments arising from past events that are not recognised in the financial
statements, as the likelihood of payment is not considered probable or cannot be reliably measured.
19.a Capital commitments
Significant capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:
Property, plant and equipment
2022
$m
2021
$m
298.8
58.1
19.b Contingent liabilities
The Group has a number of bank guarantees to third parties for various operational and legal purposes, none of which are individually material
to the Group. No provision has been made in the financial statements in respect of these bank guarantees, as the probability of having to make
a payment under these guarantees is considered remote.
The only material guarantee is for workers compensation self-insurance liabilities as required by State WorkCover authorities for $42.9 million
as at 30 June 2022 (2021: $31.5 million). No provision has been recognised in the financial statements for these contingent liabilities. However
a provision for self-insured risks relating to workers compensation claims in 'Other provisions' has been provided for (Refer Note 16.c).
20 Subsequent events
This note outlines events which have occurred between the reporting date, being 30 June 2022, and the date this financial
report is authorised.
There have been no significant events after the reporting date that may significantly affect the Group’s operations in future years, the results of
these operations in future years or the Group’s state of affairs in future years.
Annual Report 2022
127
Notes to the Financial Statements
Other Information
Ramsay Health Care Limited
21 Related party transactions
This note discloses the Group’s transactions with its related parties, including their relatives or related businesses.
Transactions with Related Party Entities
As at 30 June 2022 there were no outstanding transactions (2021: $nil) to be billed to or billed from related party entities.
Compensation of Key Management Personnel
2022
$
2021
$
2,264,421
170,945
2,435,366
3,013,110
23,568
543,582
2,107,511
5,687,771
1,431,432
23,568
259,548
827,897
2,542,445
2,287,212
153,526
2,440,738
3,256,881
21,694
321,157
1,456,965
5,056,697
1,854,055
27,117
162,660
941,055
2,984,887
6,708,963
218,081
803,130
2,935,408
10,665,582
7,398,148
202,337
483,817
2,398,020
10,482,322
Non-Executive Directors
Short term benefits
Post-employment benefits
Executive Directors
Short term benefits
Post-employment benefits
Other long term benefits
Performance/Incentive rights
Executives
Short term benefits
Post-employment benefits
Other long term benefits
Performance/Incentive rights
Total
Short term benefits
Post-employment benefits
Other long term benefits
Performance/Incentive rights
128
Annual Report 2022
Notes to the Financial Statements
Other Information
Ramsay Health Care Limited
22 Auditors’ remuneration
This note summarises the total remuneration received or receivable by the Group’s external auditors for their audit, assurance
and other services.
Amounts received or due and receivable by Ernst & Young (Australia) for:
An audit or review of the financial report of the entity and any other entity in the consolidated group
Fees for other assurance and agreed-upon-procedures services under other legislation or
contractual arrangements where there is discretion as to whether the service is provided by the
auditor or another firm
Other services in relation to the entity and any other entity in the consolidated group
Tax compliance
Assurance related
Advisory services
Amounts received or due and receivable by overseas member firms of Ernst & Young (Australia) for:
An audit or review of the financial report of the entity and any other entity in the consolidated group
Other services in relation to the entity and any other entity in the consolidated group
Tax compliance
Total
The total fees paid to Ernst & Young member firms by service type are:
Audit Services
Non-audit Services
Total
2022
$
2021
$
2,461,495
2,127,656
120,000
-
210,978
10,000
-
2,802,473
557,709
-
2,134,941
4,820,306
4,302,839
3,944,572
142,831
4,445,670
7,248,143
60,356
4,004,928
8,825,234
6,764,334
483,809
7,248,143
6,072,228
2,753,006
8,825,234
Amounts received or due and receivable by non-Ernst & Young audit firms for:
Audit or review of the financial report
2,459,569
2,493,263
Annual Report 2022
129
Notes to the Financial Statements
Other Information
Ramsay Health Care Limited
23 Information relating to subsidiaries
This note provides a list of all the significant entities controlled by the Group as at the reporting date, including those included in
the Closed Group.
Country of
Incorporation
% Equity Interest
Name
RHC Nominees Pty Limited1
RHC Developments Pty Limited1
Ramsay Health Care Investments Pty Limited1
Ramsay Hospital Holdings Pty Limited1
Ramsay Hospital Holdings (Queensland) Pty Limited1
Ramsay Finance Pty Limited1
Ramsay Aged Care Holdings Pty Limited1
Ramsay Aged Care Properties Pty Limited1
RHC Ancillary Services Pty Limited1
Linear Medical Pty Limited1
Newco Enterprises Pty Limited1
Sydney & Central Coast Linen Services Pty Limited1
Benchmark Healthcare Holdings Pty Limited1
Benchmark Healthcare Pty Limited1
AHH Holdings Health Care Pty Limited1
AH Holdings Health Care Pty Limited1
Ramsay Centauri Pty Limited1
Alpha Healthcare Pty Limited1
Ramsay Health Care Australia Pty Limited1
Donvale Private Hospital Pty Limited1
The Benchmark Hospital Group Pty Limited1
Dandenong Valley Private Hospital Pty Limited1
Benchmark – Surrey Pty Limited1
Benchmark – Peninsula Pty Limited1
Benchmark – Donvale Pty Limited1
Benchmark – Windermere Pty Limited1
Benchmark – Beleura Pty Limited1
Beleura Properties Pty Limited1
Affinity Health Holdings Australia Pty Limited1
Affinity Health Finance Australia Pty Limited1
Affinity Health Pty Limited1
Affinity Health Foundation Pty Limited1
Affinity Health Holdings Indonesia Pty Limited1
Hospitals of Australia Pty Limited1
Glenferrie Private Hospital Pty Limited1
Relkban Pty Limited1
Relkmet Pty Limited1
Votraint No. 664 Pty Limited1
Votraint No. 665 Pty Limited1
Australian Medical Enterprises Pty Limited1
AME Hospitals Pty Limited1
Victoria House Holdings Pty Limited1
C&P Hospitals Holdings Pty Limited1
HCoA Hospital Holdings (Australia) Pty Limited1
AME Properties Pty Limited1
AME Superannuation Pty Limited1
1 Entities included in the deed of cross guarantee as required for the instrument
130
Annual Report 2022
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
2022
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2021
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Notes to the Financial Statements
Other Information
Ramsay Health Care Limited
23 Information relating to subsidiaries (Continued)
Country of
Incorporation
% Equity Interest
Name
Attadale Hospital Property Pty Limited1
Glengarry Hospital Property Pty Limited1
Hadassah Pty Limited1
Rannes Pty Limited1
Hallcraft Pty Limited1
Jamison Private Hospital Property Pty Limited1
Affinity Health (FP) Pty Limited1
Armidale Hospital Pty Limited1
Caboolture Hospital Pty Limited1
Joondalup Hospital Pty Limited1
Joondalup Health Campus Finance Limited1
Logan Hospital Pty Limited1
Noosa Privatised Hospital Pty Limited1
AMNL Pty Limited1
Mayne Properties Pty Limited1
Port Macquarie Hospital Pty Limited1
HCoA Operations (Australia) Pty Limited1
Hospital Corporation Australia Pty Limited1
Dabuvu Pty Limited1
HOAIF Pty Limited1
HCA Management Pty Limited1
Malahini Pty Limited1
Tilemo Pty Limited1
Hospital Affiliates of Australia Pty Limited1
C.R.P.H Pty Limited1
Hospital Developments Pty Limited1
P.M.P.H Pty Limited1
Pruinosa Pty Limited1
Australian Hospital Care Pty Limited1
Australian Hospital Care (Allamanda) Pty Limited1
Australian Hospital Care (Latrobe) Pty Limited1
Australian Hospital Care 1988 Pty Limited1
AHC Foundation Pty Limited1
AHC Tilbox Pty Limited1
Australian Hospital Care (Masada) Pty Limited1
Australian Hospital Care Investments Pty Limited1
Australian Hospital Care (MPH) Pty Limited1
Australian Hospital Care (MSH) Pty Limited1
Australian Hospital Care (Pindara) Pty Limited1
Australian Hospital Care (The Avenue) Pty Limited1
Australian Hospital Care Retirement Plan Pty Limited1
eHealth Technologies Pty Limited1
Health Technologies Pty Limited1
Rehabilitation Holdings Pty Limited1
Bowral Management Company Pty Limited1
1 Entities included in the deed of cross guarantee as required for the instrument
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
2022
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2021
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Annual Report 2022
131
Notes to the Financial Statements
Other Information
Ramsay Health Care Limited
23 Information relating to subsidiaries (Continued)
Country of
Incorporation
% Equity Interest
Name
Simpak Services Pty Limited1
APL Hospital Holdings Pty Limited1
Alpha Pacific Hospitals Pty Limited1
Health Care Corporation Pty Limited1
Alpha Westmead Private Hospital Pty Limited1
Illawarra Private Hospital Holdings Pty Limited1
Northern Private Hospital Pty Limited1
Westmead Medical Supplies Pty Limited1
Herglen Pty Limited1
Mt Wilga Pty Limited1
Sibdeal Pty Limited1
Workright Pty Limited1
Adelaide Clinic Holdings Pty Limited1
eHospital Pty Limited1
New Farm Hospitals Pty Limited1
North Shore Private Hospital Pty Limited1
Phiroan Pty Limited1
Ramsay Health Care (Asia Pacific) Pty Limited1
Ramsay Health Care (South Australia) Pty Limited1
Ramsay Health Care (Victoria) Pty Limited1
Ramsay Health Care Services (QLD) Pty Limited1
Ramsay Health Care Services (VIC) Pty Limited1
Ramsay Health Care Services (WA) Pty Limited1
Ramsay Pharmacy Retail Services Pty Limited1
Ramsay Professional Services Pty Limited1
Ramsay Diagnostics (No. 1) Pty Limited1
Ramsay Diagnostics (No. 2) Pty Limited1
Ramsay Health Care (UK) Limited
Ramsay Health Care Holdings UK Limited
Ramsay Health Care UK Operations Limited2
Ramsay Santé SA2
Capio AB2
Ramsay Elysium Holding Limited2
1 Entities included in the deed of cross guarantee as required for the instrument
2 This entity owns a number of subsidiaries, none of which are individually material to the Group
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
UK
UK
UK
France
Sweden
UK
2022
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
52.8%
52.8%
100%
2021
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
52.5%
52.5%
0%
132
Annual Report 2022
Notes to the Financial Statements
Other Information
Ramsay Health Care Limited
24 Closed group
This note presents the consolidated financial performance and position of the Australian wholly owned subsidiaries, which
together with the Parent Entity, Ramsay Health Care Limited, are referred to as the Closed Group.
Entities subject to instrument
Pursuant to Instrument 2016/785, relief has been granted to the entities in the table of subsidiaries in Note 23, (identified by footnote 1) from the
Corporations Act 2001 requirements for preparation, audit and lodgement of their financial reports.
As a condition of the Instrument, these entities entered into a Deed of Cross Guarantee on 22 June 2006 or have subsequently been added
as parties to the Deed of Gross Guarantee by way of Assumption Deeds dated 24 April 2008, 27 May 2010, 24 June 2011, 20 October 2015,
17 December 2015 and 14 May 2019. The effect of the deed is that Ramsay Health Care Limited has guaranteed to pay any deficiency in the
event of winding up of a wholly owned Australian entity or if they do not meet their obligations under the terms of overdrafts, loans, leases
or other liabilities subject to the guarantee. The controlled entities have also given a similar guarantee in the event that Ramsay Health Care
Limited is wound up or if it does not meet its obligation under the terms of overdrafts, loans, leases or other liabilities subject to the guarantee.
The consolidated Income Statement and Statement of Financial Position of the entities that are members of the Closed Group are as follows:
Consolidated Income Statement
Profit before tax from continuing operations
Income tax expense
Net profit for the year
Retained earnings at the beginning of the year
Dividends paid
Retained earnings at the end of the year
Closed Group
2022
$m
2021
$m
402.2
(100.7)
301.5
1,737.6
(351.9)
1,687.2
564.2
(178.3)
385.9
1,467.0
(115.3)
1,737.6
Annual Report 2022
133
Notes to the Financial Statements
Other Information
Ramsay Health Care Limited
24 Closed group (Continued)
Consolidated Statement of Financial Position
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative financial instruments
Income tax receivables
Prepayments
Other current assets
Total current assets
Non-current assets
Other financial assets
Investments in joint venture
Property, plant and equipment
Right of use assets
Intangible assets
Deferred tax assets
Prepayments
Derivative financial instruments
Other receivables
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other creditors
Lease liabilities
Derivative financial instruments
Provisions
Income tax payables
Total current liabilities
Non-current liabilities
Loans and borrowings
Lease liabilities
Provisions
Derivative financial instruments
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Treasury shares
Convertible Adjustable Rate Equity Securities (CARES)
Other reserves
Retained earnings
TOTAL EQUITY
134
Annual Report 2022
Closed Group
2022
$m
2021
$m
46.5
819.5
165.1
11.3
11.5
51.2
3.9
1,109.0
663.7
238.1
2,779.8
891.8
2,294.1
149.3
10.7
29.6
206.4
7,263.5
8,372.5
600.6
21.0
-
84.3
-
705.9
2,042.6
1,015.0
130.7
-
3,188.3
3,894.2
4,478.3
2,197.6
(72.4)
252.2
413.7
1,687.2
4,478.3
17.1
691.6
160.7
-
-
30.2
1,314.6
2,214.2
648.4
217.5
2,440.5
458.2
1,076.3
193.9
10.9
-
207.1
5,252.8
7,467.0
153.7
21.0
2.7
66.1
6.4
249.9
1,947.1
565.1
129.0
4.3
2,645.5
2,895.4
4,571.6
2,197.6
(76.7)
252.2
460.9
1,737.6
4,571.6
Notes to the Financial Statements
Other Information
Ramsay Health Care Limited
25 Parent entity information
This note presents the stand-alone summarised financial information of the parent entity Ramsay Health Care Limited.
Information relating to Ramsay Health Care Limited
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Other equity
Total shareholders’ equity
Net profit for the year after tax
2022
$m
2021
$m
2,837.2
2,980.2
0.6
0.6
2,197.6
782.0
2,979.6
2,831.4
2,976.1
2.0
2.0
2,197.6
776.5
2,974.1
353.4
282.3
As a condition of the Instrument (set out in Note 24), Ramsay Health Care Limited has guaranteed to pay any deficiency in the event of
winding up of a controlled entity or if they do not meet their obligations under the terms of overdrafts, loans, leases or other liabilities subject
to guarantee.
26 Material partly–owned subsidiaries
This note provides information of the significant subsidiaries that the Group owns less than 100% shareholding in.
Ramsay Santé (formerly Ramsay Générale de Santé) has a material non-controlling interest (NCI): This entity represents the French and Nordic
segments for management and segment reporting.
Financial information in relation to the NCI is provided below:
Proportion of equity interest and voting rights held by non-controlling interests
Refer to Note 23 which discloses the equity interest held by the Ramsay Group. The remaining equity interest is held by the non
controlling interest.
Voting rights for Ramsay Santé at 30 June 2022 are 53.0% (2021: 52.8%). The remaining interest is held by the non-controlling interest.
Accumulated balances of non-controlling interests
Refer to the Consolidated Statement of Changes in Equity.
Profit allocated to non-controlling interests
Refer to the Consolidated Income Statement.
Summarised Statement of Profit or Loss and Statement of Financial Position for 2022 and 2021
Refer to Note 1. The French and Nordic segments consist only of this subsidiary that has a material non-controlling interest.
Summarised cash flow information
Operating
Investing
Financing
Net (decrease)/increase in cash and cash equivalents
2022
$m
2021
$m
237.7
(730.7)
(239.2)
(732.2)
872.3
(325.5)
(418.4)
128.4
Annual Report 2022
135
12.
136
Annual Report 2022
A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au Independent auditor's report to the members of Ramsay Health Care Limited Report on the audit of the financial report Opinion We have audited the financial report of Ramsay Health Care Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2022, the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a) Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2022 and of its consolidated financial performance for the year ended on that date; and b) Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial report section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report. 12. Independent auditors' report
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Why significant How our audit addressed the key audit matter 1. Carrying value of goodwill As disclosed in Note 14 of the financial report and in accordance with the requirements of the Australian Accounting Standards, the Group performed an annual impairment test of the Asia Pacific, UK, French and Nordics cash generating units (“CGUs”) to determine whether the recoverable value of these assets exceeds their carrying amount at 30 June 2022. A value in use model was used to calculate the recoverable amount of each cash generating unit (“CGU”). Significant assumptions used in the impairment testing referred to above are inherently subjective and in times of economic uncertainty caused by the COVID-19 pandemic, the degree of subjectivity is higher than it might otherwise be. This matter was considered a Key Audit Matter due to the extent of audit effort and judgement required to assess the reasonableness of the forecast cash flows, growth rates, discount rates and terminal growth rates used by the Group in undertaking the impairment review. Our audit procedures included the following: ► Assessed whether the methodology used by the Group met the requirements of Australian Accounting Standards. ► For the Group’s value in use models, we: ► Tested the mathematical accuracy of the value in use models; ► Assessed the basis of preparing cash flow forecasts, considering the accuracy of previous forecasts and budgets, current trading performance and the impact of COVID-19; ► Assessed the appropriateness of other key assumptions such as the discount and terminal growth rates applied with reference to publicly available information on comparable companies in the industry and markets in which the Group operates; and ► Performed sensitivity analysis on the key assumptions including discount rates, terminal growth rates and EBIT forecasts for each of the Group’s CGUs and evaluated whether a reasonably possible change in these assumptions could cause the carrying amount of the cash generating unit to exceed its recoverable amount. We involved valuation specialists in performing these procedures over the value in use models where appropriate. We evaluated the adequacy of the related disclosures in the financial report including those made with respect to judgements and estimates. Why significant How our audit addressed the key audit matter 2. Provision for insurance As disclosed in Note 16(c) of the financial report, the provision for insurance covers deductibles arising under insurance policies, including potential uninsured claims. Significant judgement is required in its determination due to the uncertainty in predicting future claims arising from past events. The Group engages a third-party actuary to assess the carrying value at each reporting date. This assessment involves evaluating assumptions in relation to ultimate outcomes on individual claims, claims handling costs and discount rates. This matter was considered a Key Audit Matter due to the level of judgement required to estimate the value of the liability. Our audit procedures included the following: ► Assessed the key assumptions adopted by the actuary and used by the Group to determine the value of the provision. Specifically, we have reviewed the assumptions compared to industry practice, potential known claims and actual historical claims. ► Assessed the competence, qualifications and objectivity of the independent actuary the Group used. ► As the appropriateness of these provisions relies on specific claims information, we have reviewed and tested controls over the operating effectiveness of the Group’s processes for capturing and recording the data. ► Evaluated the adequacy of the disclosures relating to the provision in the financial report, including those made with respect to judgements and estimates. Given the specialist nature of the calculation performed to value the provision, our actuarial specialists were involved in the assessment of the valuation model and key assumptions. 12. Independent auditors' report
Ramsay Health Care Limited
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Information other than the financial report and auditor’s report thereon The directors are responsible for the other information. The other information comprises the information included in the Company’s 2022 annual report but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the financial report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor's responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: ► Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. 12. Independent auditors' report
Ramsay Health Care Limited
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation ► Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. ► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. ► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. ► Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. ► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated to the directors, we determine those matters that were of most significance in the audit of the financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the audit of the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 45 to 64 of the directors' report for the year ended 30 June 2022. In our opinion, the Remuneration Report of Ramsay Health Care Limited for the year ended 30 June 2022, complies with section 300A of the Corporations Act 2001. 12. Independent auditors' report
Ramsay Health Care Limited
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Annual Report 2022
A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Ernst & Young Ryan Fisk Partner Sydney 27 September 2022 13.
Additional information
Additional information required under ASX Listing Rule 4.10 and not shown elsewhere in this
Annual Report is as follows. This information is current as at 5th September 2022.
a Distribution of Shareholders – Ordinary Shareholders
Size of Holding
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,0001 and over
Totals
Number of Shareholders
67,602
8,979
629
242
51
77,503
Ordinary Shares
17,417,483
17,679,502
4,295,207
4,994,995
184,494,518
228,881,705
% of Issued Capital
7.610
7.720
1.880
2.180
80.610
100.000
b Less than marketable parcels of ordinary shares
The number of shareholdings held in less than marketable parcels is 665 holders, for a total of 1,983 ordinary shares.
c 20 Largest Shareholders – Ordinary Shareholders
Name
PAUL RAMSAY HOLDINGS PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
1 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
2
3
4
5
6
7 WOOLWICH INVESTMENTS PTY LTD
8
CUSTODIAL SERVICES LIMITED
9 WARBONT NOMINEES PTY LTD
ARGO INVESTMENTS LIMITED
BNP PARIBAS NOMINEES PTY LTD
UBS NOMINEES PTY LTD
AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED
10 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA
11
12
13
14
15 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
16
17
18 MUTUAL TRUST PTY LTD
19
CERTANE CT PTY LTD
20 WASHINGTON H SOUL PATTINSON AND COMPANY LIMITED
NETWEALTH INVESTMENTS LIMITED
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
Total of Securities
d Substantial Shareholders
The names of the Substantial Shareholders listed in the Company’s Register as at 5th September 2022:
Number of
fully paid
Ordinary Shares
50,420,484
42,999,269
28,626,473
18,648,136
6,685,364
5,124,318
3,750,000
2,845,793
2,348,254
2,046,974
2,023,131
1,589,495
1,497,930
1,368,779
1,015,900
997,282
986,195
952,276
915,012
896,499
175,737,564
% of Issued
Capital
22.029%
18.787%
12.507%
8.147%
2.921%
2.239%
1.638%
1.243%
1.026%
0.894%
0.884%
0.694%
0.654%
0.598%
0.444%
0.436%
0.431%
0.416%
0.400%
0.392%
76.781%
Shareholders
Paul Ramsay Foundation Limited/Paul Ramsay Holdings Pty Limited
State Street Corporation
Number of fully paid Ordinary Shares
42,999,269
11,433,448
% of Issued Capital
18.79
5.00
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141
13. Additional information
Ramsay Health Care Limited
e Voting Rights
In accordance with the Constitution each member present at a meeting whether in person, or by proxy, or by power of attorney, or by a duly
authorised representative in the case of a corporate member, shall have one vote on a show of hands, and one vote for each fully paid ordinary
share, on a poll.
f On-market purchases
During the year ended 30th June 2022 the Company purchased NIL ordinary shares on-market for the purposes of its employee and
Non-Executive Director share plans (including to satisfy the entitlements of holders of vested performance rights to acquire shares under the
Executive Performance Rights Plan).
g Distribution of Convertible Adjustable Rate Equity Securities (CARES)
Holders
Size of Holding
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,0001 and over
Totals
Number of CARES holders
3,777
274
19
12
2
4,084
CARES
1,125,411
546,204
133,140
370,472
424,773
2,600,000
% of Issued Securities
43.290
21.010
5.120
14.250
16.340
100.000
h Less than marketable parcels of CARES
The number of CARES held in less than marketable parcels is 3 holders, for a total of 6 CARES.
i 20 Largest CARES Holders
Number of fully
paid CARES
295,885
128,888
83,474
82,013
56,866
28,183
20,969
16,679
16,195
14,975
14,017
13,895
11,736
11,470
10,000
10,000
8,387
7,676
7,550
7,500
846,358
% of Issued
Capital
11.380%
4.957%
3.211%
3.154%
2.187%
1.084%
0.806%
0.642%
0.623%
0.576%
0.539%
0.534%
0.451%
0.441%
0.385%
0.385%
0.323%
0.295%
0.290%
0.288%
32.552%
NATIONAL NOMINEES LIMITED
Name
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
1
2
3 MUTUAL TRUST PTY LTD
4
5 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
6
7
8
9 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
NETWEALTH INVESTMENTS LIMITED
LONGHURST MANAGEMENT SERVICES PTY LTD
UBS NOMINEES PTY LTD
10
11
12
13
14
15
16
17
18
19
20
FIRST SAMUEL LTD ACN 086243567
AUSTRALIAN EXECUTOR TRUSTEES LIMITED
PERODA NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
NULIS NOMINEES (AUSTRALIA) LIMITED
SCANLON CAPITAL NO 10 PTY LTD
ERIC GOLF PTY LTD
NETWEALTH INVESTMENTS LIMITED
REGION HALL PTY LTD
DAP1000 PTY LTD
BETH MACLAREN SMALLWOOD FOUNDATION P/L
Total Securities of Top 20 Holdings
j On-Market Buy-Backs
There is no current on-market buy-back in relation to the Company's securities.
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Annual Report 2022
14.
Corporate Directory & Key Dates
Directory
As at 22 September 2022
▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
Key Dates
As at 22 September 2022
▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
Directors
Non-Executive Directors
Michael Siddle (Chairman)
David Thodey AO
Alison Deans
James McMurdo
Karen Penrose
Claudia Süssmuth Dyckerhoff
Steven Sargent
Executive Director
Craig McNally (Managing Director & CEO)
Group General Counsel & Company Secretary
Henrietta Rowe
Registered Office
Suite 18.03, Level 18
126 Phillip Street
Sydney NSW 2000 Australia
Email: enquiry@ramsayhealth.com
Website: www.ramsayhealth.com
Telephone: +61 2 9220 1000
Facsimile: + 61 2 9220 1001
Share Registry
Boardroom Pty Limited
Level 12, Grosvenor Place
225 George Street
Sydney NSW 2000 Australia
Email: enquiries@boardroomlimited.com.au
Website: www.boardroomlimited.com.au
Telephone Enquiries (from within Australia):
1300 737 760
Telephone Enquiries (from outside Australia):
+61 2 9290 9600
Facsimile: +61 2 9279 0664
Auditor
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
Annual General Meeting 2022
The 2022 Annual General Meeting will be held on 29th
November at 10:30am. Full details will be available in Ramsay's
Notice of Meeting.
Indicative Key Dates for 2023
Results Release Dates
Interim Results - Thursday, 23 February 2023
Preliminary Final Results - Thursday, 24 August 2023
Dividend Payment Dates - Ordinary Shares
Interim Dividend - Thursday 30th March 2023 (record date 7th
March 2023)
Final Dividend - Friday 29th September 2023 (record date 7th
September 2023)
Dividend Payment Dates - Cares
Thursday, 20th April 2023 (record date 30th March 2023)
Friday 20th October 2023 (record date 29th September 2023)
Annual General Meeting 2023
The 2023 Annual General Meeting of Ramsay Health Care
Limited is scheduled to be held on 21st November 2023. Full
details will be provided closer to the date.
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