ANNUAL MEETING 2 NOVEMBER 2015

Transcription

1 2015 ANNUAL MEETING 2 NOVEMBER 2015

2 ABANO BOARD Trevor Janes Independent Chairman Susan Paterson Independent deputy chair Retiring end-november 2014 Pip Dunphy Independent director Ted van Arkel Independent director Danny Chan Independent director Murray Boyte Independent director Alan Clarke Managing director Retiring post-2015 Annual Meeting

3 SENIOR MANAGEMENT CORPORATE Alan Clarke Richard Keys Rachel Walsh Brendan O Sullivan Peter Radich Retiring managing director/ceo Incoming CEO Chief financial officer Group financial controller Chief information officer BUSINESS CEOS Andy Tapper Malcolm Lean Eron Plumb Dr David Rogers Lumino The Dentists Dental Partners Bay Audio Insight+Ascot Radiology

4 MEETING STRUCTURE AND AGENDA Presentations Trevor Janes, Chairman Alan Clarke, Retiring Managing Director and CEO Richard Keys, Incoming CEO Shareholder Discussion Resolutions as per Notice of Meeting General Business Close of Annual Meeting

5 CHAIRMAN S ADDRESS Trevor Janes, Chairman

6 CHAIRMAN S ADDRESS Abano Healthcare Group Limited is an investor in and operator of healthcare businesses, in New Zealand, Australia and South East Asia. OUR VISION To build market-leading brands and healthcare businesses that have the competitive advantage of size, scale and reputation. OUR LONG TERM STRATEGY Invest in scalable businesses in the private, fee for service healthcare market where we can add value, build capability and help them to grow Australia and Asia

7 FOCUS ON PRIVATE HEALTHCARE SECTOR INVEST Private paying customers Growing demand Opportunities to add value, build scale and grow market share Trans-Tasman Dental Market ~NZ$11 billion Australia and SE Asia Audiology Market Australia ~A$450+ million SE Asia potential hundreds of millions of dollars DIVEST Reliance on fixed price Government contracts Limited scale and growth opportunities High risk Orthotics Centre divested 31 January 2015 Aotea Pathology divested 1 May 2015 New Zealand Radiology Market ~NZ$250 million

8 FUNDING FOR GROWTH DEBT Undrawn facilities as at 31 May 2015 of over $50 million, providing headroom for continued investment Fixed interest rates in place for 69% of drawn debt as at 31 May 2015 Extended tenure and improved pricing were agreed during FY15 EQUITY Access to equity through loyal shareholder base DRP participation rate approx. 50% $m FY14 FY15 Current assets Property, plant and equipment Intangible assets Other non current assets TOTAL ASSETS Current liabilities Non current borrowings Other non current liabilities TOTAL LIABILITIES Total equity

9 FY15 RESULTS OVERVIEW Continuing Trend of Year On Year Gross Revenue And Revenue Growth Underlying NPAT At Top End Of Guidance and 46% Ahead Of Prior Year Gross Revenue Revenue All Sectors Maintained or Improved EBITDA Margins NPAT -1.3 Underlying NPAT Record revenues primarily driven by acquisitions in the dental business and improving performance across all businesses Results reflect loss of earnings and non-cash loss on sale and reduction in goodwill following sale of orthotics and pathology businesses in FY15 EBITDA Underlying EBITDA See glossary slide for explanation of gross revenue and underlying earnings

10 Cents Per Share DIVIDEND 30 Dividend Payment Directors introduced new dividend policy in FY15 where, subject to relevant factors at the time, including working capital and growth, the annual dividend paid will be between 50-70% of Underlying Net Profit After Tax. 15 Full year dividend of 25 cents per share, up 19% on FY14 10 Equal to 59% of underlying NPAT 5 0 FY11 FY12 FY13 FY14 FY15 The Dividend Reinvestment Plan (DRP) continues to be well supported with approximately 50% of dividends taken up in shares under the DRP. Interim Final

11 TOTAL SHAREHOLDERS RETURNS 30% In the past year, Abano has delivered a gross return (Total Shareholder Return) of 21.5% compared to an NZX50 gross return of 9.1% 25% Abano 21.5% 20% 15% 10% NZX50 9.1% 5% 0% -5% Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Abano gross return (Total Shareholder Return TSR) NZX50 gross return

12 GOVERNANCE Abano s Directors offer a range of complementary skills, expertise and experience Subsidiary company boards include directors with a variety of healthcare, management and business expertise and experience as well as relevant clinical skills Australian-based Murray Boyte appointed by the Board in February 2015 Murray Boyte, Ted van Arkel and Pip Dunphy are up for election/re-election at today s meeting Susan Paterson to retire at end-november 2015 Alan Clarke to retire as CEO and Managing Director at the end of the 2015 Annual Meeting

13 CEO TRANSITION Alan Clarke, Retiring CEO and Managing Director Richard Keys, Current CFO/COO, Incoming CEO

14 CONCLUSION Simon Leith, Lead dentist at Lumino Kerikeri Dental Centre

15 ALAN CLARKE Retiring CEO and Managing Director

16 MANAGEMENT PRESENTATION Richard Keys, Incoming CEO

17 $ Millions $ Millions $ Millions REVENUE GROWTH Gross Revenue Record $300.4 million Continuing Trend of Year On Year Gross Revenue And Revenue Growth Record revenues primarily driven by acquisitions in the dental business and improving performance across all businesses FY11 FY12 FY13 FY14 FY Gross Revenue 250 Revenue Record $222.2million FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 0 FY11 FY12 FY13 FY14 FY15 Dental Diagnostics Rehabilitation Audiology Gross revenue includes audiology and gross dental revenues before the payment of dentists commissions

18 Percent GROSS REVENUE Funding Source We Invest In Businesses Predominantly Funded By Private Revenue On A Sustainable Fee For Service Basis Revenue from private funding is now 92% with less than 3% from NZ DHBs, Ministry of Health and ACC funding We Diversify Across Markets, Income Streams And Geographical Regions To Reduce Risk For FY16, we expect over 60% of our gross revenue to be generated off-shore, predominantly in Australia FY03 Continuing Operations Revenue Sources by Region Private MOH/DHB/ACC/Other Australia Office of Hearing Services FY11 FY12 FY13 FY14 FY15 New Zealand Australia Asia

19 $ Millions UNDERLYING EBITDA GROWTH Underlying EBITDA Results Reflect Long Term Strategy To Invest Into Growth And Expansion Of Businesses FY15: EBITDA $29.6m; Underlying EBITDA $30.7m. All sectors maintained or improved margins Sector Underlying EBITDA FY11 FY12 FY13 FY14 FY15 Audiology Dental Diagnostics Rehabilitation DENTAL Continuing year on year growth in dental Investment into building strong infrastructure for future expansion, particularly in Australia DIAGNOSTICS Radiology: Growing demand from referrers following investment into expanded capacity and offering Pathology business divested 1 May 2015 AUDIOLOGY Bay International achieved positive EBITDA for first time after eight years of loss making REHABILITATION Orthotics business divested 31 January 2015 See glossary slide for explanation of Underlying EBITDA

20 $Millions FY15 $8.8 million UNDERLYING NPAT GROWTH Increasing Returns As We Invest Into Our Growth Businesses Underlying NPAT FY06 to FY15 Investment into growth of dental, audiology and radiology businesses Exit from ElderCare New Zealand; $10 million capital return to shareholders Investment into Audiology NZ Exit from Bay Audiology NZ; $29.5 million return to shareholders Sale of NHC Holding; $27.3 million capital return to shareholders Sale of rehabilitation business Sale of Orthotics and Pathology business

21 THE HEALTHCARE MARKET DEMAND FOR HEALTHCARE IS GROWING PRIVATE HEALTH SPEND 2015/16 Medical advances, rising incomes, longer life expectancy and a growing number of baby boomers pushing up demand for healthcare Governments cannot continue funding healthcare at current levels of growth for increasing healthcare demands PRIVATE SECTOR PARTICIPATION Private sector provision can and currently does supply capital and expertise Use of private sector resources removes the pressure on public facilities Private payment and healthcare insurance frees up the public system for those that most need it 29% of New Zealand population and more than 50% of Australian population have private health insurance Est. A$29.7 billion Approx. 30% of health spend is private payment Est. NZ$3.25 billion Approx. 17% of health spend is private payment

22 OUR POTENTIAL OUR STRATEGY Trans-Tasman Dental Market ~NZ$11 billion: Australia A$9.4b NZ$0.7b Focus on private healthcare sector Sustainable demand from private paying customers Scale and growth opportunities Ability to add value and generate increasing shareholder returns Australia and SE Asia Audiology Market Australia ~A$450+ million Asia potential hundreds of millions of dollars New Zealand Radiology Market ~NZ$250 million

23 OUR PATHWAY TO SUCCESS STRATEGIC DRIVERS STRATEGIC GROWTH INVESTMENT Dental acquisitions Selected greenfield dental practice openings Audiology store greenfield openings OPERATIONAL EXCELLENCE Best practice processes and systems Maximise synergies and resources between businesses Supply chain efficiencies Investment into people Organic growth through expansion of existing facilities and services

24 OUR BUSINESSES DENTAL AUDIOLOGY RADIOLOGY Lumino The Dentists Bay Audio Australia Insight+Ascot Radiology Maven Dental Group Bay Audio Asia

25 THE OPPORTUNITY IN DENTAL ~14,000 Dental Practices Trans-Tasman dental market is worth approx. NZ$11 billion Australia: A$9.4b NZ: $0.7b Huge pool of practices for acquisition and ongoing expansion of Abano s dental networks on both sides of the Tasman Growing Acceptance And Popularity Of The Corporate Dental Model More dentists are choosing to join a corporate dental group Corporate consolidators own less than 5% of practices and have less than 10% of revenues Changing workforce: Growing number of females favouring flexible working conditions available in corporate dental model Trans-Tasman Market Ownership Corporate Consolidators Predominantly privately funded: Minimal reliance on Government funded contracts; Payment from patients or their health insurance Other Long Term Growth Trend: Better Oral Health and retention of natural teeth; More Services on offer; Increasing Demand for Cosmetic Services

26 ABANO S DENTAL MODEL Abano Dental (179 practices) Dental Corp/Bupa (est. 211 practices) Pacific Smiles (est. 50 practices) 1300 Smiles (est. 23 practices) Scale Nationwide across NZ and Australia Nationwide in Australia and some coverage in NZ Predominantly NSW, with some practices in QLD, VIC and ACT. Not in NZ Largely regional locations, mainly in Northern Queensland. Not in NZ Network Growth Strategy Acquisition of quality practices. Immediate cashflow and EPS. Selective greenfield development Acquisition of practices. Immediate cashflow and EPS Greenfield development. Cash losses from start-up Small to no network growth Infrastructure Investment to support growth. Highly scalable Some centralised support functions in place to support network Limited centralised support functions to support network No central infrastructure to support growth Customer Origination Predominantly private clients Predominantly private with increasing reliance on insurance clients Heavy reliance on insurance clients Focus on Government contracts Service offer Mid to high end; Full service Expanding number of specialist practices Mid to high end; Full service with some specialist practices Low to mid end Offer geared around insurance services Low to mid end Branding National brand in NZ; launching new national brand in Australia Individual practices names with rebranding of some practices to BUPA Majority of practices branded Pacific Smiles with small number branded as NIB Most practices branded 1300 Smiles Competitor business model assumptions based on market data and industry information

27 $m $m ABANO S DENTAL BUSINESSES FY15 Dental Performance Provided 70% of Abano s Gross Revenue 94 practices as at October 2015 Estimated 12 15% market share 100% ownership by Abano 85 practices as at October 2015 Estimated 1.4% market share 100% ownership by Abano Gross Revenue $211.1m 12% Increase FY14:FY15 FY11 FY12 FY13 FY14 FY15 Underlying EBITDA $25.1m 14% Increase FY14:FY15 FY11 FY12 FY13 FY14 FY15

28 LUMINO THE DENTISTS Largest Dental Network In New Zealand WHAT WE LIKE Market leadership (size and offer) Predominantly private payment Strong infrastructure and culture across the group Benefits of scale including procurement, recruitment and training Indepth knowledge base and industry experience Innovative marketing campaign and ability to leverage national brand presence Independence Highly experienced executive team Long term engagement with dentists post-acquisition STRATEGIC GROWTH AND OPERATIONAL EXCELLENCE Continuing acquisition of high quality practices with selected greenfield practice openings in strategic locations Investment into people, processes and clinical excellence New creative campaign to drive patient visits and new patients Adding capacity to existing clinics Driving efficiencies through merging closely located practices and sharing resources across both dental businesses

29 MAVEN DENTAL GROUP Second Largest Dental Network In Australia WHAT WE LIKE Huge market potential Second largest dental consolidator in Australia Predominantly private payment Benefits of scale starting to be seen Ability to share knowledge and learn from successes in New Zealand market Independence STRATEGIC GROWTH AND OPERATIONAL EXCELLENCE Continued growth, primarily through acquisition as well as organic growth and expansion Rollout of new brand and development of marketing campaigns to drive patient visits Focus on business efficiencies Investment into infrastructure and support People and culture development Focus on business efficiencies and sharing of resources across both dental businesses

30 NATIONAL ADVERTISING AND MARKETING Driving patient visits and building brand awareness Launched third creative campaign Do what makes you smile in July 2015 THE POWER OF MARKETING 13% of the NZ adult population are Lumino patients Over 1,200 patients per day across NZ, or 300,000 per year 85% of NZers know the Lumino name (up from 22% only four years ago). 24,000 patients have used Qcard to access dental treatment For every marketing dollar spent on TV and Online, Lumino generates approx. $5 in treatment spend The new Lumino website attracts 41,000 unique visitors each month. That s more than the population of Gisborne

31 ROLLOUT OF MAVEN BRAND August 2015: Announcement of new brand October 2015: Practice rebrand rollout commences (two to three year timeframe)

32 Number of practices INVESTMENT INTO GROWTH Total Network Size Current Network Size: 179 practices Two Well Established and Fast Growing Dental Networks Second largest and one of the fastest growing trans- Tasman dental corporates; Largest private dental network in NZ and second largest in Australia Acquiring one practice on average every two to three weeks FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Sep-15 Lumino The Dentists Maven Dental As at October 2015 Seven practices acquired since year end providing approximately $13 million in expected annualised gross revenue Merged two closely located practices into new purpose built premises in KeriKeri, New Zealand Development of new greenfield practice in Christchurch In excess of $240 million in annualised gross revenue (at today s exchange rate)

33 GROWTH JOURNEY Underlying EBITDA Margin Lumino The Dentist: Established Maven Dental: Emerging Challenging economic conditions impacting on sales (and margins) FY15 FY14 FY12 FY13 FY08 FY09 FY10 FY11 Successful national marketing activity driving patient visits Benefits of investment and scale beginning to be realised Margins impacted by heavy investment into support infrastructure and brand development

34 $ m $ m ABANO S AUDIOLOGY BUSINESSES FY15 Audiology Performance Provided 13% of Abano s Gross Revenue AUSTRALIA 37 stores across Australia as at end-october, with 34 of these in retail malls PLUS mobile locations Estimated market share in excess of 3% Bay International 50:50 joint venture ASIA 12 stores in Taiwan plus 4 in Singapore and 3 in Malaysia Bay International 50:50 Joint Venture Gross Revenue $40.1m 27% Increase FY14:FY15 FY11 FY12 FY13 FY14 FY15 Underlying EBITDA $2.0m Increase FY14:FY15 FY11 FY12 FY13 FY14 FY15

35 THE OPPORTUNITY IN AUDIOLOGY THE AUDIOLOGY MARKET AUSTRALIA: END USER Main markets are still OECD countries but increasing demand from populations in emerging countries Population boom in year olds with noise induced hearing loss Launch of high value, high margin hearing devices with significant improvements in end-user benefits Technology impacting the traditional sales model AUSTRALIA Mature and Sophisticated Market Competitive and highly corporatized Approx % of hearing impaired use a hearing device SE ASIA One in six people suffer hearing loss. Predicted to increase to 1:4 by 2050 ~75% of population aged +70 years are hearing impaired Average age of first time user is 69 years Emerging Market; Growing at over 30% per year Still underdeveloped compared to many other countries Large populations and huge, untapped potential Less than 5% of hearing impaired use a hearing device

36 RETAIL BUSINESS MODEL Well branded stores in high traffic retail malls Bay audio s innovative technology is changing how hearing health is accessed and assessed Mobile screening in non-retail locations is generating customer leads for Bay Audio solutions

37 BAY AUDIO AUSTRALIA High End Hearing Solutions Provider WHAT WE LIKE Sophisticated and mature market Appealing retail environment Expanding retail network and well regarded brand Indepth industry knowledge Proprietary self test screening technology with nearly 6,000 self test touch screen leads generated per month Innovative marketing and sales strategy Private payment with some public funding top-up payments Independent of vertically integrated audiology manufacturers STRATEGIC GROWTH AND OPERATIONAL EXCELLENCE Targeted growth through organic expansion and greenfield development Increase in non-retail mobile screening opportunities and locations Retail partnerships eg Terry White Chemists and Quality Pharmacy Group Focus on cost reduction and efficiencies Investment into in-store training and people development

38 BAY AUDIO ASIA WHAT WE LIKE Significant untapped market potential Introducing a new way for consumers to access hearing health Leveraging industry knowledge and experience Small investments into test markets; very small part of Bay International group Private payment Independent of vertically integrated audiology manufacturers Local teams in each market STRATEGIC GROWTH AND OPERATIONAL EXCELLENCE Educate customers around hearing health and solutions Build awareness and acceptance of retail model Long term development opportunity Now under the oversight of the Australian management team Focus on delivering breakeven performance in a more challenging market

39 $ Millions $ Millions ABANO S DIAGNOSTIC BUSINESSES FY15 Diagnostics Performance Provided 14% of Abano s Gross Revenue 50 Gross Revenue $41.5m 3% decrease FY14:FY15 40 Five Leading Edge Clinics Located Across Auckland 71:29 partnership with 14 radiologist partners FY11 FY12 FY13 FY14 FY15 Underlying EBITDA $7.6m 3% decrease FY14:FY Results include pathology business which was divested 1 May FY11 FY12 FY13 FY14 FY15

40 THE OPPORTUNITY IN RADIOLOGY GROWING DEMAND Medical advances and new technology providing improved diagnosis, and at an earlier stage Ageing demographics pushing up demand CHANGING INDUSTRY DYNAMICS Market dominated by private practice groups Approx. 100 to 150 individual radiology clinics in NZ Increasing consolidation of the market NEW TECHNOLOGIES DRIVING INDUSTRY CHANGE PET-CT scanning for cancer Digital breast mammography MRI guided breast biopsy Move from film to digital images Greater collaboration with other clinicians in patient treatment Increasing demand for radiologists with sub-specialities

41 INSIGHT+ASCOT RADIOLOGY WHAT WE LIKE World class clinics Leading edge imaging technologies Team of expert and highly respected radiologists Excellent relationships with referrers Stable radiologist partnership Large component private payment (65%); remainder through MOH and ACC STRATEGIC GROWTH AND OPERATIONAL EXCELLENCE Investment into new high end technologies and services eg digital tomosynthesis mammography imaging Continuing improvement in customer service delivery Upgrades to clinics to improve customer experience

42 FY16 BUSINESS UPDATE MD and CEO, Alan Clarke, to retire post-2015 annual meeting Richard Keys (currently Abano CFO/COO) announced as incoming CEO Rachel Walsh appointed as incoming CFO Investment into clinic upgrades and new mammography technology Bay Australia - Targeted network growth with opening of three new greenfield sites since June and several more planned over the next months Same store growth plateauing after four strong years of improvement Bay Asia restructured and now under Australian management oversight Continued growth through acquisition Announcement of new brand and commencement of initial practice rebrand Investment into new management positions Dental conferences Challenging market conditions, particularly in Queensland Continued growth through acquisition Launch of new creative campaign Dental conference New Zealand economic conditions remain stable

43 GUIDANCE: FY16 FIRST HALF Year on year comparison reflects: Guidance for six months to 30 November 2015 $millions HY16 Guidance HY15 Excluding divested businesses HY15 Gross Revenue Revenue EBITDA Underlying EBITDA NPAT Underlying NPAT Growth of Abano s dental networks Improvements in audiology Divestment of the pathology and orthotics businesses in FY15 means there are no longer earning contributions from these businesses Excludes Abano s AUD$1.8 million share of Bay Australia s unrecognised deferred tax asset, which based on current trading is likely to now be recognised in the current financial year. A like for like comparison for HY15, excluding the pathology and orthotics businesses which were sold, has been provided to give readers further clarity on the relative performance of Abano s ongoing businesses. More information on gross revenue, EBITDA, underlying EBITDA and Underlying NPAT, which are non-gaap financial measures, is available at Definitions of financial terms are included in the glossary at the end of this presentation.

44 ABANO - LOOKING FORWARD We are well positioned to become a competitive and large scale provider in our target sectors ORGANIC AND ACQUISITION GROWTH Expansion of targeted businesses in sectors with identified growth potential Practice acquisition, selected greenfield openings and organic growth in dental Organic growth and greenfield store openings in audiology New modalities and services in radiology EFFICIENT USE OF FUNDS Capital deployment towards higher growth, higher return businesses In particular, dental and audiology Banking headroom for continued investment INVEST INTO TALENTED PEOPLE Recruit and retain the best possible talent Invest into our people to help them realise their potential Create world class working environments and foster cultures that recognise excellence DELIVER IMPROVING SHAREHOLDER RETURNS Dividends in line with new policy Focus on continuing to deliver improving results

45 SHAREHOLDER DISCUSSION

46 RESOLUTIONS RESOLUTION 1 That Mr Murray Boyte, who was appointed as a Director by the Board during the year, be elected as a Director of the Company RESOLUTION 2 That Ms Pip Dunphy, who retires by rotation and is eligible for re-election, be re-elected as a Director of the Company RESOLUTION 3 That Mr Ted van Arkel, who retires by rotation and is eligible for re-election, be re-elected as a Director of the Company. RESOLUTION 4 To record the reappointment of PricewaterhouseCoopers as auditor of the Company and to authorise the Directors to fix the auditor s remuneration.

47 PROXIES Resolution FOR AGAINST PROXY DISCRETION ABSTAIN Murray Boyte election 6,577, , ,127 8,342 Pip Dunphy re-election 5,772,519 1,803, ,627 13,916 Ted van Arkel re-election 5,758, , ,627 1,011,290 Auditor s remuneration 7,573,620 1, ,364 8,927 Total proxies received in respect of 7,861,339 shares representing 37.22% of total shares on issue Voting on each resolution will be by way of poll

48 OTHER BUSINESS

49 CLOSE OF THE MEETING Results of the voting will be released to the NZX Presentations available online at Video of the annual meeting proceedings will be available on the Abano website

50 GLOSSARY Revenue excludes any audiology revenues, as this is a joint venture and is therefore equity accounted, and only includes Australian dental revenues after the payment of dentists commissions. Gross revenue is reported within the segment note in the Financial Statements and includes audiology revenues and Australian dental revenues before payment of dentists commissions. Earnings Before Interest, Tax, Depreciation and Amortisation ( EBITDA ) is reported within the segment note in the Financial Statements and is Net Profit After Tax ( NPAT ) excluding GAAP compliant net finance expenses, gains/losses arising on sale of businesses, equity accounted investments, non-controlling interests, tax, depreciation and amortisation costs. Particularly, it excludes profit/losses generated by the Bay Group, in which Abano holds a 50% shareholding. Due to this being a joint venture, the results for the Bay Group are equity accounted and therefore not included in the consolidated EBITDA. Underlying earnings are reported for both NPAT (a GAAP compliant measure) and EBITDA (a non-gaap financial measure) and excludes gains/losses arising on sale of businesses, IFRS adjustments and impairments, including their tax effect. Both measures are reconciled back to reported NPAT. It is the measure used within the Company to evaluate performance, establish strategic goals and to allocate resources. More information on gross revenue and underlying earnings, which are non-gaap financial measures and are not prepared in accordance with NZ IFRS, is available on the Abano website at

51 DISCLAIMER This Annual Meeting presentation dated 2 November 2015 includes comment on Abano s financial performance including financial results for the year ended 31 May 2015, which were released by Abano Healthcare Group on 29 July As such, it should be read in conjunction with, and subject to, the explanations and views provided in that material. The information in this presentation is an overview and does not contain all information necessary to make an investment decision. It is intended to constitute a summary of certain information relating to the performance of Abano Healthcare Group ( Abano ). The information in this presentation does not purport to be a complete description of Abano. This presentation is not investment advice or financial advice. Abano, its directors and employees do not give or make any recommendation or opinion in relation to acquiring or disposing of Abano shares. In making an investment decision, investors must rely on their own examination of Abano, including the merits and risks involved. Investors should consult with their own legal, tax, business and/or financial advisors in connection with any acquisition of securities. The information contained in this presentation has been prepared in good faith by Abano. No representation or warranty, express or implied, is made as to the accuracy, adequacy or reliability of any statements, estimates or opinions or other information contained in this presentation, any of which may change without notice. To the maximum extent permitted by law, Abano, its directors, officers, employees and agents disclaim all liability and responsibility (including without limitation any liability arising from fault or negligence on the part of Abano, its directors, officers, employees and agents) for any direct or indirect loss or damage which may be suffered by any recipient through use of or reliance on anything contained in, or omitted from, this presentation. This presentation is not a prospectus, investment statement or disclosure document, or an offer of shares for subscription, or sale, in any jurisdiction. This presentation includes non-gaap financial measures in various sections. This information has been included on the basis that management and the Board believe that this information assists readers with key drivers of the performance of Abano which are not disclosed as part of the financial statements.

52 IFRS REPORTING IMPACT ON THE REPORTED RESULTS RECONCILIATION OF EBITDA TO UNDERLYING EBITDA ($m) EBITDA Add back Acquisition Costs Underlying EBITDA RECONCILIATION TO UNDERLYING EARNINGS (DUE TO CHANGES IN IFRS IN 2010) NPAT (1.3) Less: Loss/Gain on sale of subsidiary (12.3) - (1.6) Add back: Impairment tax asset Add back: Fair value movement and amortisation of deferred acquisition consideration (0.3) - Add back: Acquisition and Divestment costs Underlying NPAT More information on underlying earnings, which is a non GAAP financial measure and is not prepared in accordance with NZIFS, is available at