[PPT] - Unaudited Group Results and Cash Dividend Declaration for the six PowerPoint Presentation

SLIDE 1

www.lifehealthcare.co.za

Unaudited Group Results and Cash Dividend Declaration

for the six month period ended 31 March 2014 13 May 2014

SLIDE 2

Agenda

2

Pieter van der Westhuizen CFO

Financial Review Operational Review Future Guidance

André Meyer CEO André Meyer CEO

SLIDE 3

www.lifehealthcare.co.za

Financial Review

Pieter van der Westhuizen CFO

3

SLIDE 4

Highlights

4

Revenue + 10.2% to R6 211m Normalised EBITDA + 12.5% to R1 738m Attributable Profit + 140.5% R1 813m EPS + 140.8 % to 174.8 cents Normalised EPS + 16.0% to 82.7 cents Dividend + 16.7% to 63 cps PPD growth + 2.7% Occupancy + 2.3% to 70.6%

Previous years’ numbers where used for comparative purposes have been re-stated for changes in accounting standards Normalised earnings exclude non-trading related items such as profit/loss on disposal of assets and businesses and associated costs.

Revenue Growth Good normalised EPS growth Strong cash generation +16.0% + 10.2% +15.7% Increased dividend To 63 cps

SLIDE 5

Financial results

JMH profit is R982 million before taxes of R28 million

5

Mar 2014 Mar 2013 % REVENUE 6 211 5 634 10.2% Normalised EBITDA 1 738 1 545 12.5% Normalised EBITDA margin 28.0% 27.4% Operating profit excluding one off items 1 501 1 312 14,4% One off items 985 (4) Operating profit 2 486 1 308 90,1%

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Five year review

Revenue Normalised EBITDA

6

3 779 4 295 4 740 5 016 5 522 326 324 365 410 441 81 99 166 208 248 1.000 2.000 3.000 4.000 5.000 6.000 7.000 2010 2011 2012 2013 2014 Hospital HCS NLB 982 1.166 1.370 1.545 1 738 400 800 1.200 1.600 2.000 2010 2011 2012 2013 2014

Consistent growth in revenue – Group benefitting from faster growth in NLB
Continued improvement in efficiencies assisted growth in normalised EBITDA
Continued operational leverage assisting margin growth

CAGR : 15.3% CAGR : 10.4%

R’000 m R’000 m

Hospital revenue includes other revenue

2 173 2 548 2 907 3 327

Full year numbers

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28,0% 33,4% 15,6% 10,0% 3,2% 1,3% 8,4%

H1 2014

Normalised Ebitda Employee benefits COS Surgicals COS Ethicals Occupational expenses Repairs & maintenance Other

Financial results

Revenue breakdown

27,4% 33,6% 15,6% 10,0% 3,2% 1,1% 8,9%

H1 2013

Employee benefits efficiency improvement derived from operational leverage and the

introduction of new lines of business (mental health, acute rehabilitation, renal dialysis), this is despite a 7% increase in nursing salary costs

Excellent management of procurement despite the depreciation of the Rand

7

SLIDE 8

Financial results

Mar 2014 Mar 2013 % REVENUE 6 211 5 634 10.2% Normalised EBITDA 1 738 1 545 12.5% Normalised EBITDA margin 28.0% 27.4% Operating profit 2 486 1 308 90.1% Associates 37 27 37.0% Attributable earnings 1 813 754 140.5% ASSOCIATES JMH 41 42

2.4%

MHC

7
17

58.8%

8

Attributable earnings is defined as earnings attributable to ordinary shareholders

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REVENUE (RS.CRORE) H2 14 H2 13 % Revenue – Phase 1 hospitals 541 504 7.3% Revenue – Phase 2 hospitals 169 92 83.7% Revenue Total 710 596 19.1%

India : Max Healthcare

Revenue & EBITDA Growth

9

150 200 250 300 350 400 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Phase 1 Phase 2 Rs in Cr Rs in Cr

Financial year end: March

20
10

10 20 30 40 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Phase 1 Phase 2 EBITDA (RS.CRORE) H2 14 H2 13 % EBITDA – Phase 1 hospitals 69 65 6.2% EBITDA – Phase 2 hospitals

4
20

EBITDA – Total 65 45 44.4% EBITDA margin – Phase 1hospitals 13% 13% EBITDA margin – Total hospitals 9% 7%

Revenue EBITDA

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Financial results

Mar 2014 Mar 2013 % EPS 174.8 72.6 140.8%

Profit on disposal of business / Loss on

de-recognition of finance lease (92.1) 0.3 HEPS 82.7 72.9 13.4%

Gain on de-recognition of finance lease liability
(1.6)

Normalised EPS 82.7 71.3 16.0%

10

2014: new accounting standards impact EPS and
HEPS. The retirement fund surplus will not form part
f the EPS & HEPS calculation

37,6 51,1 62,3 71,3 82,7

20,0

40,0 60,0 80,0 100,0 2010 2011 2012 2013 2014

Normalised EPS

cps CAGR : 21.8%

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Financial results

Segmental review

11

Hospital Division:
2.7% increase in PPDs
7.3% increase in revenue/ppd
19% growth in NLB revenue (Mental Health, Acute Rehab, Renal Dialysis)
HCS division:
16% growth in Occupational Health

Mar 2014 Mar 2013 % REVENUE 6 211 5 634 10.2% Hospital division 5 769 5 222 10.5% Healthcare services 441 410 7.6% Other 1 2

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Mar 2014 Mar 2013 % REVENUE 6 211 5 634 10.2% Hospital division 5 769 5 222 10.5% Healthcare services 441 410 7.6% Other 1 2 Operating profit before amortisation, profit on disposals and impairment of intangible assets 1 558 1 369 13.8% Hospital division 1 408 1 222 15.2% Healthcare services 97 83 16.9% Other 53 64

17.2%

Financial results

Segmental review

12

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Cash generated vs normalised EBITDA

821 1.069 1.003 1 247 1.443 83% 90% 73% 81% 83% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 200 400 600 800 1.000 1.200 1.400 1.600 2010 2011 2012 2013 2014 Cash generated from operations Cash generated as % of normalised EBITDA

13

R 000m

2 233 3 414 3 042 2 562

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Mar 2014 Sept 2013 Re-stated Mar 2013 Re-stated Non-current assets 8 212 8 350 7 884 PPE 4 690 4 517 4 142 Intangibles 2 031 2 084 2 131 Other 1 491 1 749 1 611 Current assets (excl. cash) 1 618 1 323 1 402 Cash 298 297 247 Total assets 10 128 9 970 9 533

Summarised statement of financial position

Assets

14

Proceeds from the sale of our 49.3% in JMH:
Payment of a special dividend – 100cps
R300m being utilised for investment opportunities

SLIDE 15

Summarised statement of financial position

Equity and liabilities

Mar 2014 Sept 2013 Mar 2013 Total shareholders equity 5 650 5 607 5 090 Non-current liabilities 2 547 2 150 2 269 Interest bearing borrowings 2 036 1 657 1 797 Other non-current liabilities 511 493 472 Current liabilities 1 931 2 213 2 174 Total equity and liabilities 10 128 9 970 9 533 Net debt (as per covenants) 2 229 2 115 2 497 Net debt to normalised EBITDA (covenant 2.75 x) 0.62 0.63 0.81

15

Term debt 793 695 836 IFRS debt 647 667 655 Preference shares 820 820 820 Net cash on hand (31) (67) 186

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Distributions Cents/share Rand % of Normalised EBITDA Cover* Interim 2012 45 R469 million 34.2% 1.47 Final 2012 60 R625 million 40.7% 1.34 Total 2012 105 R1 094 million 37.6% 1.39 Interim 2013 54 R563 million 36.4% 1.39 Final 2013 72 R750 million 42.1% 1.32 Total 2013 126 R1 313 million 39.4% 1.35 Special Dividend Interim 2014 100 63 R1 042 million R657 million 37.7% 1.38

Dividend

16

* Cover calculated on normalised EPS excluding amortisation

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1,77 1,78 1,47 1,39 1,38 24.4 27.7 34,2 36,4 37,7 0,0 5,0 10,0 15,0 20,0 25,0 30,0 35,0 40,0 0,00 0,20 0,40 0,60 0,80 1,00 1,20 1,40 1,60 1,80 2,00 2010 2011 2012 2013 2014 Cover % Ebitda 37,6 51,1 62,3 71,3 82,7 23 31 45 54 63 10 20 30 40 50 60 70 80 90 2010 2011 2012 2013 2014 Normalised EPS DPS

Five year review

Interim dividends

Dividend cover:

1.38 times

% of EBITDA:

37.7%

Normalised EPS CAGR:

21.8%

Normalised DPS CAGR:

28.7%

17

Cents

%

2014 Dividend numbers exclude the special dividend of 100 cps Normalised EPS excluding amortisation

SLIDE 18

International: Poland

Scanmed Multimedis Acquisition

Life Healthcare purchased 80.7% of Scanmed Multimedis
Price per share:
PLN4.18 per share
R14.42 per share (3.45 exchange rate)
Purchase multiple: 14 x Forward EBITDA
Earnings impact: negligible for 2014

18

2013 PLZ M 2012 PLZ M Revenue 94.9 84.0 59% 41% Revenue Split PC & Outpatient Hospital

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www.lifehealthcare.co.za

Operational Review

André Meyer CEO

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H1 2014 Highlights

Growth Sustainability Efficiency

SA Growth: PPD Growth 2.7% New beds 142 International Growth: Good revenue and EBITDA growth in MHC Acquisition of 80.7% of Scanmed Multimedis in Poland Occupancy 70.6% Normalised EBITDA margin 28.0% Continued improvement in clinical outcomes Programme to recruit specialised nurses from India

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SA : Growth

PPDs

800 850 900 950 1.000 1.050 1.100 2010 2011 2012 2013 2014 PPDs

2.7% 1.5% 6.0% 6.4%

CAGR: 4.1%

New beds only operational in February and March
Benefited with the timing of the public holidays in March vs 2013

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SA : Growth

New beds - Brownfield

Category New beds H1 2014 New beds H2 2014 WIP beds Approved beds * Applications pending Capacity expansion at existing facilities 142 120 93 210 595

H1 2014 beds:
Timeframe:
38 beds were added in February
104 beds added in March
Broad based growth to take advantage of areas with strong demand
H2 2014 beds:

*Approved : received Health department licence approval. In the process

f obtaining Municipal approvals before commencing building

No of beds No of hospitals ICU/HC beds General beds

142 9 37 105

No of beds No of hospitals ICU/HC beds General beds

120 8 45 75

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SA : Growth

New beds - Greenfield

Category New beds H1 2014 New beds H2 2014 WIP beds Approved beds * Applications pending Capacity expansion at existing facilities 142 120 93 210 595 New facilities

94

300 188

New facilities:
94 bed Life Hilton Private hospital under construction
Approved licences for two 150 bed greenfield hospitals

*Approved : received Health department licence approval. In the process

f obtaining Municipal approvals before commencing building

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SA : Growth

New beds

Category New beds H1 2014 New beds H2 2014 WIP beds Approved beds * Applications pending Capacity expansion at existing facilities 142 120 93 210 595 New facilities

94

300 188 Mental Health / Acute Rehabilitation

35

381 Total 142 120 187 545 1 164

Strong overall pipeline of beds
994 beds included in: new beds 2014, WIP, approved
1 164 beds applications pending
Good combination of brownfield, greenfield and mental health / acute rehabilitation
Cover 8 regions within SA

24

*Approved : received Health department licence

approval. In the process of obtaining Municipal

approvals before commencing building

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SA : Growth

Geographic spread of New beds

WC H1 2014: 2 H2 2014: 7 WIP: 2 Approved: 222 Pending: 24 Total: 257 EC H1 2014: 20 H2 2014: 35 WIP: 4 Approved: 5 Pending: 275 Total: 339 KZN H1 2014: 38 WIP: 145 Approved: 24 Pending: 233 Total 440 FS H2 2014: 16 Pending: 10 Total: 26 NW Approved: 59 Pending: 45 Total: 104 MP H1 2014: 20 Approved: 68 Pending: 156 Total: 244 GTN H1 2014: 62 H2 2014: 69 WIP: 36 Approved: 17 Pending: 421 Total: 605 Total H1 2014 beds: 142 H2 2014 beds: 120 WIP: 187 Approved: 545 Pending: 1 164 NC Approved: 150

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Total Beds Acute beds: 7 718 Acute Rehab: 318 Mental Health: 384 H1 2014: 2 H1 2014: 20 H1 2014: 62 H1 2014: 38 H1 2014: 20

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SA : Growth

Geographic spread of New beds

WC H1 2014: 2 H2 2014: 7 WIP: 2 Approved: 222 Pending: 24 Total: 257 EC H1 2014: 20 H2 2014: 35 WIP: 4 Approved: 5 Pending: 275 Total: 339 KZN H1 2014: 38 WIP: 145 Approved: 24 Pending: 233 Total 440 FS H2 2014: 16 Pending: 10 Total: 26 NW Approved: 59 Pending: 45 Total: 104 MP H1 2014: 20 Approved: 68 Pending: 156 Total: 244 GTN H1 2014: 62 H2 2014: 69 WIP: 36 Approved: 17 Pending: 421 Total: 605 Total H1 2014 beds: 142 H2 2014 beds: 120 WIP: 187 Approved: 545 Pending: 1 164 NC Approved: 150

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Total Beds Acute beds: 7 718 Acute Rehab: 318 Mental Health: 384 H2 2014: 4 H2 2014: 16 H2 2014: 65 H2 2014: 35

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SA : Growth

Other – New Lines of Business (NLB)

LHC expanded outside acute hospital care into:
Acute Rehabilitation:

7 facilities, 319 beds

Mental Health:

6 facilities, 384 beds

2012 started expanding the acute and chronic Renal Dialysis offering
2013 added Oncology through the chemotherapy and radiosurgery unit at Life Vincent Pallotti

81 99 166 208 248 50 100 150 200 250 300 2010 2011 2012 2013 2014

NLB H1 Revenue CAGR : 32.3%

R’000m

Mar 13 Sep 13 Mar 14

Renal stations 97 122 158

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SA : Growth

Healthcare Services

Healthcare Services
Life Esidimeni
Stable performance
Return of Matikwana hospital (178 bed acute facility in Mpumalanga) to Province as of 31 March

2014, upon completion of the contract. Matikwana represents 20% of Life Esidimeni revenue.

Life Occupational Health
Strong revenue growth

326,0 324,0 365,0 410,0 441,0 100 200 300 400 500 600 2010 2011 2012 2013 2014

HCS Revenue CAGR : 7.8%

R’000m

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Unit Bed Capacity Operational beds Mar 2013 Operational beds Mar 2014

Phase 1 Hospitals 1 080 1 011 1 066 Phase 2 Hospitals: (opened between Nov 2011 and May 2012) Shalimar Bagh 288 126 158 Mohali 204 102 179 Bathinda 205 70 59 Dehradun 201 70 109 Total Phase 2 898 368 505 Combined total 1 978 1,379 1 571

International: Growth

MHC Bed Growth

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192 beds added 407 beds still to be operational

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Unit Operational beds Mar 2014 Occupancy 31 Mar 2013 Occupancy 31 Mar 2014

Phase 1 Hospitals 1 066 76% 76% Phase 2 Hospitals: Shalimar Bagh 158 77% 59% Mohali 179 71% 50% Bathinda 59 57% 32% Dehradun 109 69% 50% Total Phase 2 505 70% 48% Combined total 1 571 74% 70%

International: Growth

MHC Occupancy

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SLIDE 31

International: Growth

MHC

Max Healthcare:
Resignation of the Max Healthcare MD, Ajay Bakshi in March 2014
Rahul Khosla the MD of Max India will act in a caretaker capacity
Appointment of Rajet Mehta as deputy MD of Max Healthcare:
a strong record of turning around Max Life and he will be responsible for driving
perational efficiency and cost management
Set up of an operational Board comprising Life and Max India to closely manage

monthly performance

Shareholding Equalisaton;
Opportunity exists for LHC to increase it’s shareholding to 46.5%

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International: Growth

Poland - Scanmed Multimedis asset

Scanmed Multimedis (Scanmed):
Private healthcare provider in Poland
Business consists of:
a 130-bed multidisciplinary acute hospital located in Krakow
a 22 bed specialist ophthalmology hospital near Krakow
23 medical centres which provide outpatient care (primary healthcare and specialist

consultations) and diagnostic services located in major cities across Poland including Warsaw, Gdansk, Poznan, Wroclaw, Katowice and Krakow

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International: Growth

Poland - Scanmed Multimedis rationale

Scanmed Multimedis (Scanmed):
The private healthcare sector in Poland allows private entities to provide treatment to

state-funded patients

Reforms in the private health insurance market are also under review - mandatory

health insurance for all employees

Gain a market leading brand and delivery platform and a strong management team with

a proven track record and an appetite for growth

Scanmed will continue to be run with the existing management team, headed by

Ms Joanna Szyman in close association with LHC’s management team

LHC will look to leverage off it’s operational expertise to drive efficiencies through the

business

LHC will aim to increase it’s presence in the fragmented Polish private hospital market

through select acquisitions in partnership with Medicover

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www.lifehealthcare.co.za

Operational Review: Efficiency

André Meyer CEO

SLIDE 35

12 35 37 16 2014: Bed Occupancy Split

< 60% 60 - 69% 70 - 79% 80+%

16 38 30 16 2013: Bed Occupancy Split

SA : Efficiency

Effective use of assets

24 38 28 10 2010: Bed Occupancy Split 68,2 69,6 70,2 69,0 70,6 64 66 68 70 72 2010 2011 2012 2013 2014

%

Beds > 70% occupancy: 38% Beds > 70% occupancy: 46% Beds > 70% occupancy: 53%

35

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SA : Efficiency

EBITDA Margin

Strong management of cost of sales

procurement

Continue to leverage operational

efficiencies through the addition of NLB

Continued management of overheads

and administrative costs

20 22 24 26 28 30 2010 2011 2012 2013 2014

%

23.5% 24.7% 26.0% 27.4% 28.0%

8,50 9,00 9,50 10,00 10,50 11,00 11,50 12,00

Rand $ Exchange rate

36

14% depreciation

SLIDE 37

Efficiency

Impilo Theatre module

E-billing Theatre module:
Driven through our Impilo multi-touch device
Benefits:
Pre-planning for pre-booked theatre cases
Removal of manual charge sheets
electronic paperless solution
reduction in administrative costs
real time billing and improved billing accuracy
Improved billing & stock control management
Improved doctor & patient satisfaction
Rollout commences May 2014
Provides:
Platform for re-engineering of processes aligned to lean principles of continuous improvement
Encompasses organisational re-design to meet quality objectives
Tailored to Life’s work processes and incorporates best practice

37

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www.lifehealthcare.co.za

Operational Review: Sustainability

André Meyer CEO

SLIDE 39

SA : Sustainability

Quality - Measuring clinical outcomes

Measure Outcome Mar 2014 Outcome Sept 2013 Outcome Mar 2013 Standard Patient incident rate 2.99 3.24 3.26 Per 1,000 PPDs VAP

(Ventilator Associated Pneumonias)

1.95 2.69 4.02 Per 1,000 VAP days SSI

(Surgical Site Infections)

0.77 0.74 0.65 Per 1,000 theatre cases CLABSI

(Central Line Associated Blood Stream Infections)

1.01 0.83 0.82 Per 1,000 central line days CAUTI

(Catheter-related Urinary Tract Infections)

0.44 0.57 0.59 Per 1,000 catheter days FIM/FAM Score 1.16 1.14 1.00 > 0.9 MHQ14 2.36 > 1.6

A reduction in the HAI (Hospital associated infection) rate: 0.49 (2013: 0.52)

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SA : Sustainability

Regulatory environment

Competition Commission (CC) market inquiry
CC inquiry panel announced on 30 January 2014
Meeting held on 16 April to cover:
CC approach to the inquiry
a tool to understand the competitive dynamics of markets and to be

investigative and inquisitorial in nature

commitment to running a comprehensive and objective process

focused on understanding whether there are features that prevent/ distort competition in the private healthcare: “purpose of the exercise is to determine whether the process of competition is working well or can be improved effectively in a market as a whole” – retired Chief Justice Sandile Ngcobo, Chairperson of the inquiry

Rules of engagement

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SA : Sustainability

Regulatory environment

Competition Commission (CC) market inquiry
Timelines:

Date Comment

1 May 2014 Release of statement of issues (essentially outlining the theories of harm that the inquiry will focus on exploring) and administrative guidelines for public comment 30 June 2014 Deadline for comments on statement of issues and administrative guidelines 1 August 2014 Publish final statement of issues and administrative table 1 August 2014 Call for submissions on the subject matter of the market inquiry 30 October 2014 Deadline for submissions on the subject matter of the inquiry 1 March – 30 April 2015 Public hearings 1 May – 31 July 2015 Analysis and targeted public hearings and information requests October 2015 Publish provisional findings

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www.lifehealthcare.co.za

Future Guidance

André Meyer CEO

SLIDE 43

Future Guidance

Growth
SA:
Addition of 120 beds in H2
Continued good PPD growth
International:
India
Continued improvement in revenue & Ebitda
Shareholding equalisation discussions to continue
Poland:
Bed down Scanmed acquisition
Efficiency:
Continue to drive:
Operational leverage
Strong procurement management
Driving of administrative efficiency

43

SLIDE 44

www.lifehealthcare.co.za

Thank you

SLIDE 45

www.lifehealthcare.co.za

Appendix

SLIDE 46

Shareholding

10 20 30 40 50 60 SA N America UK Europe Rest Mar-13 Sep-13 Mar-14 %

46

SLIDE 47

International Poland:

Stable macroeconomic supports strong growth of healthcare industry in Poland

Healthcare Expenditure

Growing domestic healthcare market (PLN bn)

33 37 41 44 51 57 61 64 65 68 17 18 19 20 23 26 28 29 31 33 50 55 60 64 74 83 89 93 96 101 20 40 60 80 100 120 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Public funding Private funding 10,9% 7,3% 5,7% 4,8% 2,8% 2,2% 2,0% 1,6% 0,0% 2,0% 4,0% 6,0% 8,0% 10,0% 12,0% Slovakia Poland Czech Rep. UK Hungary France Germany Italy

Annual av. growth in health expenditures per capita 2000–09

PLNbn

Polish healthcare market is on a fast convergence path to OECD levels, with health expenditures

2.5 times lower in Poland than OECD countries average

In ten years up to 2012 total health expenditure in Poland increased from PLN 50bln

to PLN 101bn (8,1% CAGR) while private health expenditure grew from PLN 17bn to PLN 33bn (7,5% CAGR)

As countries become richer they devote an increasing percentage of GDP to healthcare. The trend is

visible in Poland:

total health expenditure could grow to PLN 140-150bn by 2018, with public health expenditure reaching PLN 80bn

by 2018

private expenditure may increase to PLN 60-70bn, effectively doubling the private market size
The continued poor perception of the public sector will support strong demand for private provision
Due to lack of growth potential in public funding of capital expenditures, further private investments will

be the driver of improving healthcare infrastructure

Opportunity for leading private players to take ownership of operating facilities in attractive locations with

established patient flows as an increasing number of public hospitals are being privatised

Source: Polish Chamber of Commerce, OECD Health Data 47

SLIDE 48

International Poland:

Funding of healthcare in Poland

Public (67%) Private (33%)

Funding Intermediary Provision

98% 56% 32% 27% 2% 44% 68% 73% 0% 20% 40% 60% 80% 100% Inpatient Outpatient Pharma Dentistry Breakdown in market segment by type of funding source Public Private Corporations and individuals via taxation (67%) Individuals (31%) Corporations (2%) NHF / Public Out of pocket Insurance firms Subscription companies

Funding model in Poland Key trends

The share of public funding (67%) remains below the average of OECD countries (72%), which implies

relatively high direct private spending

NHF is expected to promote funding of managed healthcare services, which should be highly beneficial

for providers able to offer services at each stage of medical treatment like Scanmed

Insufficient amounts of public funds in the NHF make the availability of reimbursed medical services

disproportionate to the level of demand

Slowing down of public spending is likely to promote private spend which is growing strongly
Growing PHI market which is developing even in absence of any stimulating regulation

48 Source: CSO, IMF, L.E.K., PIC, NHF.

SLIDE 49

International Poland:

Provision of healthcare in Poland

48% 52% Healthcare service in Poland breakdown by provider in 2012 Public provision Private provision

84% 10% 25% 28% 16% 90% 75% 72% 0% 20% 40% 60% 80% 100% Inpatient Outpatient Primary Care Diagnostic Imaging

Healthcare services structure in Poland by provider

Public Private

Funding model in Poland Key trends

Share of private sector provision is higher than share of private funding private hospitals are

beneficiaries of both public and private spending

Value of services provided by private sector has been increasing at CAGR of 12.1% within the years

2003 – 2011 as compared to CAGR of 9.3% of services rendered by the public sector

Inpatient care services remain mostly provided by public sector in Poland, however share of private

providers has been steadily increasing over the last years

Growing requirements for enhanced quality of service and infrastructure, especially in hospitals, will offer
pportunities to well-resourced private providers
Commercialisation and privatisation will boost the private sector in inpatient provision
Consolidation is progressing

49 Source: CSO, IMF, L.E.K., PIC, NHF.

SLIDE 50

International Poland:

Hospital market overview

Inpatient care accounts for nearly 30% of total healthcare

expenditures, of which around the vast majority (around 98%) is funded by public means.

Currently private sector accounts for approximately 16%
f healthcare services provision
The public hospital sector is insufficiently funded by the

NHF and consumer perception of public hospitals is poor due to: (i) obsolete condition of public inpatient infrastructure; (ii) long waiting times, (iii) poor service

Number of private inpatient care facilities including

commercialized hospitals increased on average by 12% a year from 2007 to 2012

There are about 360 non-public hospitals operating in

Poland with the total bed capacity of c.a. 28k of beds

Key drivers of expected dynamic growth of private

inpatient market include:

Growing demand for high-quality inpatient services,
Increase in disposable income,
Ageing population
Lifestyle diseases such as obesity and stress
Private hospital market development will be focus on

large multi-speciality hospitals and specialty hospitals previously reserved for public units like e.g. oncology

Number of general hospitals in Poland

686 691 678 660 644 611 589 578 546 526 509 501 30 45 61 72 146 170 153 170 186 228 286 313 100 200 300 400 500 600 700 800 Public Private

Market highlights

Structural changes in hospitals market are strongly favorable for private inpatient care market

50 Source: CSO, L.E.K., PIC.

SLIDE 51

International Poland:

Outpatient and Primary Healthcare market overview

Outpatient clinics benefited from growth in out of

pocket expenditure

Further growth of out of pocket spending will be driven by

increase in personal disposable income, NHF budget constraints, growing supply, including migrating of inpatient services to outpatient services segment

Corporate health covers now perceived as the most

important employee benefit

Estimated value of corporate health cover subscriptions

in 2011 amounted to c.a. PLN 1.3bn (EUR 309m)

PHI market is still relatively small - PLN 300m (EUR 71m)

in 2011 and comprised about 675k of policyholders

Vast majority of PHI covers mainly outpatient services,

the more premium packages include inpatient care

Nearly 97% of the population in Poland is registered with

primary care doctors

The primary health care market is very fragmented
PHC market benefited from strong growth of the

capitation rates, which doubled within the years 2005 and 2011

The forecasted demand for PHC consultation

155,5 156,7 157,9 159 160,1 161 161,7 162,4 163 0,7% 0,8% 0,7% 0,7% 0,6% 0,5% 0,4% 0,4% 0,001 0,002 0,003 0,004 0,005 0,006 0,007 0,008 0,009 150 152 154 156 158 160 162 164 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A 2020A Need for PHC consulation (m cases) Growth rate % 1,6 1,8 2,1 2,4 2,8 3,6 3,9 3,8 4,0 1,9 2,1 2,3 2,5 2,7 3,0 3,6 3,8 4,1 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 10,0 2003A 2004A 2005A 2006A 2007A 2008A 2009A 2010A 2011A NHF funding Private funding

Outpatient market funding (PLNbn) Market highlights

51 Source: IHS, L.E.K.

SLIDE 52

Glossary of terms

52

Approved Received Health department licence approval. Have not commenced building ICU Intensive care unit ARM Alternative reimbursement model MHQ 14 Mental Healthcare questionnaire 14 Attributable Earnings Earnings attributable to ordinary shareholders NHI National Health Insurance CAUTI Catheter-related urinary tract infections Normalised Ebitda Operating profit plus depreciation, amortisation of intangible assets, impairment of intangible assets as well as excluding profit/loss on disposal of assets and businesses and associated costs CC Competition Commission NLB New lines of business – Acute rehabilitation, mental health and renal dialysis and oncology CLABSI Central line associated bloodstream infections LOH Life Occupational Healthcare EBITDA Earnings before interest, taxes, depreciation and amortisation PPD Paid patient day FIM/FAM Functional Independence measure Functional assessment measure SSI Surgical site infections HAI Health associated infections VAP Ventilator associated pneumonia HEPS Headline earnings per share WIP Work in progress beds