NETCARE LIMITED UNAUDITED INTERIM GROUP RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2016 CARE DIGNITY TRUTH PARTICIPATION PASSION

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1 NETCARE LIMITED UNAUDITED INTERIM GROUP RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2016

2 Group Overview South Africa United Kingdom Financial Review Guidance

3 GROUP OVERVIEW

4 4 Group A comprehensive network of healthcare services Hospitals Hospital beds Primary healthcare facilities/clinics Retail pharmacies Renal dialysis facilities Netcare 911 emergency bases Netcare training colleges Employees

5 5 Group Overview South Africa (SA) Good demand for services across all divisions Integration of 584 new beds added at end FY 2015 Margin impact of expense inflation, new builds, change in case mix Primary Care focus on expanding day theatre and sub-acute facilities United Kingdom (UK) The private healthcare market has undergone a structural change Private activity growth driven by NHS outsourcing and Self-pay demand NHS-funded patients increased to 41.1% of caseload PMI¹ market remains challenging 1. PMI: Private Medical Insurance

6 6 Group Financial overview 48% Revenue 52% 74% EBITDA 26% 96% HEPS 4% 97% 3% Adjusted HEPS South Africa United Kingdom Revenue R18 814m 15.4% EBITDA R2 663m 13.6% HEPS 90.3 cents 10.9% Adjusted HEPS 91.0 cents 0.2% Interim dividend maintained at 38.0 cents

7 SOUTH AFRICA

8 8 SA Healthcare network 52 Hospitals 5 Public Private Partnership hospitals Beds¹ 90 PHC², sub-acutes, day theatres Renal dialysis stations Emergency bases/sites Retail pharmacies Nursing and paramedic students 1. SA = 9 996; Lesotho = PHC: Primary Healthcare Centres and travel clinics

9 9 SA Financials Rm % Revenue EBITDA Volume and pricing growth impacted by case mix shift in favour of medical admissions Operating profit EBITDA margin (%) Operating profit margin (%) Margin decline in Hospital and Emergency Services and an uplift in Primary Care + Depreciation impact of new capacity added end FY 2015

10 10 SA Hospital and Emergency Services business update 2.8% patient days; 4.0% to April % full week occupancy; 2.2% due to new capacity Polokwane and Pinehaven hospitals occupancies exceeding expectations Shift in mix from surgical to medical at lower income per admission Cost pressures outweighed ongoing efficiency programme benefits Net 117 specialists granted practising privileges

11 11 SA Hospital and Emergency Services Rm % Revenue EBITDA Operating profit EBITDA margin (%) Operating profit margin (%) Note: EBITDA and operating profit are reflected before rental charges from Netcare property companies (eliminate on consolidation) + 2.8% patient days + 5.2% revenue per patient day + Surgical patients contributed 61.5% of admissions (H1 2015: 62.9%) + Rising inflation and currency weakness impacted on cost of sales and operating costs + Two new hospitals in ramp-up phase + Shift in mix to medical cases + Increased depreciation driven by 584 new beds added in late FY 2015

12 QUALITY SYSTEM QUALITY CULTURE 12 SA Quality: sustaining improvement over 5 years Medical outcomes Reduce antibiotic consumption (DDD¹ per 100 bed days) AMI² in-hospital mortality rate per 100 AMI patients discharged % 7.7% Best outcomes Best patient experience TRIPLE AIM Most cost effective Patient safety measures CLABSI³/1000 central line days VAP⁴/1000 ventilator days FY 2016 YTD FY 2011 FY 2016 YTD FY 2011 Patient experience scores Pain management Nursing communication 84.0% 73.9% 85.2% 75.7% FY 2016 YTD FY DDD: Defined Daily Dose (WHO) 2. AMI: Acute Myocardial Infarction 3. CLABSI: Central Line-Associated Bloodstream Infection 4. VAP: Ventilator-Associated Pneumonia

13 13 Netcare Christiaan Barnard Memorial Hospital

14 14 SA Primary Care Rm % Revenue EBITDA Operating profit EBITDA margin (%) Operating profit margin (%) Stable performance across Medicross family medical and dental centres + Solid result at Prime Cure + Refinements to business model and rationalisation of cost base

15 15 SA Primary Care business update Change in strategy to focus on expanding Primary Care s national network of day theatres and sub-acute facilities FY 2016 acquisitions: + 16 bed sub-acute in Pietermaritzburg + 20 bed sub-acute in Amanzimtoti FY 2017/18 growth projects: + 4 new day theatres in Kimberley, Upington, Cape Town and Richards Bay + 3 new sub-acute facilities in Cape Town, Hillcrest and Richards Bay + Further developments in the pipeline

16 16 SA Regulatory update National Health Insurance (NHI) + Government released the NHI White paper in December The proposed NHI changes the way public healthcare is funded + Introduces capacity to contract private sector, starting with private doctors in terms of primary healthcare and emergency services + Contracting of private specialists and hospitals to be considered in later years Private Healthcare Market Inquiry (HMI) + Netcare made comprehensive submissions in 2014, 2015 and Public hearings commenced in 2016; Phase 1 in process + HMI position papers on topics under review still to be published + Final report, which might include recommendations, is still expected at the end of 2016 based on the formal timetable

17 UNITED KINGDOM

18 18 UK BMI Healthcare s hospital network UK s largest private hospital group with 59 sites¹ and beds Offer a broad range of complex healthcare services Widest network of critical care beds in the private sector and 32 cancer units ± consultants and employees 90% of UK PMI policyholders live within 60 minutes of a BMI Healthcare facility Strong commitment to clinical quality and patient satisfaction hospitals, 3 clinics

19 19 UK Market Overall demand for healthcare continues to increase Specific demand funded by private medical cover remains challenging Self-pay demand continues to strengthen as NHS waiting lists grow Sources of funding for private hospitalisation and clinics, UK 2015² ( m) Main driver of private demand growth is NHS outsourcing Outsourcing of NHS activity is being driven by patient choice under AQP¹ policy NHS revenue in private hospitals has increased from 5% to 30% over the last decade Private medical cover UK private Self-pay NHS Overseas 1. AQP: Any Qualified Provider 2. Source: LaingBuisson, 28th edition

20 20 UK Business activity Total NHS Private 2.6% overall activity¹; 3.3% to April % caseload² 3.1% outpatient activity 5.4% caseload; impacted by slow down in Spot purchases 8.5% e-referrals caseload (Choose & Book) 2.9% privately funded caseload 4.6% Self-pay caseload 1. Overall activity: inpatient, day case and outpatient 2. Caseload: inpatient and day cases

21 21 UK Change in payor profile Caseload per payor group 72% H % 41% H % Current caseload per payor group: + NHS 41.1% + Self-pay 11.5% + Insured 47.4% Ongoing migration from inpatient procedures to day case and outpatient procedures NHS Private

22 22 UK Changes at BMI Healthcare Strengthened senior leadership team Clear vision supported by detailed corporate and operational plans Disciplined operating model with a focus on growth, people efficiencies and governance Recruited >300 new consultants >6 700 marketing visits to GPs; >4 000 doctors hosted at education / training events 23 sites successfully inspected under the CQC¹ new inspection regime 1. CQC: Care Quality Commission

23 23 UK BMI Healthcare stakeholder satisfaction trends Overall Quality of Care % Satisfaction with overall quality of care is at its highest % for the last two years having risen to 98.4% up from 98.2% this time last year % Recommendation to Friends and Family % 99% of our NHS patients said they would recommend % BMI Healthcare to their family and friends % Satisfaction with Consultants % 98.9% of patients are very satisfied % with our consultants % Employee Engagement % 95% of staff are fully committed % to doing their very best for BMI Healthcare %

24 24 UK BMI Healthcare m % Revenue (1.4) EBITDA (before items below) (4.4) Restructure costs (6.1) Reversal of impairment 2.0 EBITDA Operating profit Revenue per case impacted by: Payor mix change to NHS Ongoing shift to day and outpatient environment Pressure on NHS tariff + Easter timing impact + GHG PropCo rent 73.9m (2015: 71.8m) + Other rent 5.7m (2015: 7.6m) EBITDA margin (%)¹ Reported EBITDA margin (%) Operating profit margin (%) Excluding restructure costs and reversal of impairment on investments

25 25 UK Capital investment BMI Three Shires New MRI scanner BMI Clementine Churchill New endoscopy suite BMI Clementine Churchill New ICUs BMI Bishops Wood Refurbished cancer care facility

26 FINANCIAL REVIEW

27 27 Group Financial overview Pleasing performance in period of integration of new beds Absorption of depreciation and finance costs on 2015 new capacity Strong group balance sheet Comfortable gearing and leverage

28 28 Group Summarised statement of profit or loss + Growth in SA Rm % + Impact of currency conversion in UK Revenue EBITDA Operating profit Net financial expenses (298) (249) Earnings of associates and JVs Profit before taxation Taxation (426) (452) Profit for the year GHG PropCo rent R1 633m (2015: R1 276m) + Non-recurring costs of UK restructure of R109m in R49m in SA depreciation mostly driven by new capacity + R76m in UK depreciation from weaker Rand + Includes charge of R41m (2015: R107m) non-cash fair value adjustment on RPI swaps + Effective tax rate 25.4% (2015: 27.9%)

29 29 Group Constant currency performance Revenue (Rm) EBITDA (Rm) % % H H H H SA UK Exchange rate impact Average exchange rate of R22.10: 1 (Mar 2015: R17.76: 1) Closing exchange rate of R21.20: 1 (Sept 2015: R20.94: 1)

30 30 Group Headline earnings per share (HEPS) Rm % Adjusted HEPS¹ (cents) HEPS SA UK (3.8) Adjusted HEPS¹ SA UK SA Group H1 H2 1. Adjusted to exclude Competition Commission costs, UK restructure costs, non-cash fair value adjustments on derivative financial instruments and changes in tax rates

31 31 Group Summarised statement of financial position Rm 30 Sep Forex effect Other movement Assets PPE¹, goodwill and intangible assets Other non-current assets Current assets (468) Group capex R1 088m (2015: R747m) + SA: R886m (2015: R531m) + UK: R202m (2015: R216m) Total assets (32) Equity and liabilities Total shareholders equity Borrowings (91) Other liabilities (591) + Group net debt to EBITDA leverage 1.3 times (H1 2015: 1.2 times) + Group interest cover to 10.4 times (H1 2015: 9.6 times) Total equity and liabilities (32) 1. PPE: Property, Plant and Equipment

32 32 Group SA debt Rm Sep Gross debt Cash (1 397) (1 345) (494) Net debt Net debt to EBITDA (times) Facility utilisation (Rm) Cost of debt (%) Net interest paid Interest cover (times) Utilised Cash Available + Cash outlay of R2 207m (2015: R2 026m) for capex, dividends and tax + Comfortable leverage ratio + Capacity of DMTN programme increased to R7.5bn on 1 April % of debt at fixed interest rates

33 33 Group UK debt: BMI Healthcare m Sep Gross debt Cash (38.6) (54.0) (47.4) Facility utilisation ( m) 47.4 Net debt Net debt to EBITDA (times)¹ Cost of debt² Utilised Cash Net interest paid Debt term Comfortable gearing + Fully compliant with debt covenants + Repaid 23.1m maturing debt tranche in October Netcare holds 75.3m economic interest + Cost of debt excluding Netcare economic interest is 4.8% 1. Excluding restructure costs and reversal of impairment on investments 2. Secured bank debt

34 GUIDANCE

35 Guidance SA outlook Improvement in occupancy levels as new capacity gains traction Focus on optimising capacity and initiatives to drive

35 35 Guidance SA outlook Improvement in occupancy levels as new capacity gains traction Focus on optimising capacity and initiatives to drive operational excellence and quality improvement 85 new hospital beds to be added in H Continue to evaluate potential international opportunities

36 Guidance UK outlook Growth in NHS caseload driven by e-referrals NHS tariff increase effective April 2016 BMI Healthcare is well positioned

36 36 Guidance UK outlook Growth in NHS caseload driven by e-referrals NHS tariff increase effective April 2016 BMI Healthcare is well positioned for volume growth and focused on operating efficiencies Capex ± 43m to enhance hospital infrastructure and keep abreast of technological developments

37 THANK YOU May 2016

38 APPENDICES

39 39 Appendix UK income statement segmental analysis m BMI Healthcare GHG PropCo2¹ WholeCo Revenue EBITDA (before GHG PropCo rent and items below) GHG PropCo rent (73.9) (73.9) EBITDA (before items below) Reversal of impairment EBITDA Operating profit Net financial expenses (9.6) (9.6) Equity accounted earnings Profit before taxation Taxation Profit after taxation Comprising 6 hospital properties

40 40 Appendix Group borrowings at ch 2016 Gross borrowings Net borrowings Rm Sep Sep SA BMI OpCo Group Net debt to EBITDA (times) m BMI OpCo Closing exchange rate

NETCARE LIMITED AUDITED GROUP RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2016 CARE DIGNITY TRUTH PARTICIPATION PASSION

NETCARE LIMITED AUDITED GROUP RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2016 PRESENTATION OUTLINE Group Overview South Africa United Kingdom Financial Review Guidance GROUP OVERVIEW 4 Group A comprehensive