Growth – International
Internationally, our strategy is focused on selected attractive markets that display supporting characteristics for longer-term growth of the private healthcare market, and maintain our strategic imperative to grow revenue from non-acute revenue sources.

OUR 2019 PRIORITIES		OUR PROGRESS
Commercial sales growth		MRI and CT commercial sales increased due to a variety of initiatives
Organic growth within selected medical specialisations		Growth of our radiopharmacy business was constricted, mainly due to the refurbishment of our cyclotrons to secure future capacity and keep up with increasing demand
PET-CT contract roll-out		PET-CT contract roll-out is progressing well, despite a slight delay with our PET wave 2 sites as a result of the tender processes impacting our margins in the short term
Appoint International CEO		Appointed Mark Chapman as our international CEO, with effect from June 2019
Building an international leadership team		Introduced an international Finance Director, Medical Director and Human Resource (HR) Director as part of our new international executive committee
Technology-enabled support initiatives		Investing in AI research projects, as well as digital PET-CT scanners – we have committed to three digital scanners as part of the PET wave 2 contracts Partnered with Oxford University to work on two AI products to support cancer diagnostics Initiated a Phase II of our clinical trial on our TAU products
Increase scale in certain existing geographies		Increase in MRI and CT volumes in Italy due to increased volumes and clinic acquisitions Opened three new centres in Ireland and acquired the Cork Community Imaging facility
Growth in new geographies which complement existing investment		Continue to explore opportunities to expand into new territories

OUR 2020 PRIORITIES

Continue to focus on organic operational growth initiatives and operational excellence Continue delivering on Alliance Medical's PET-CT contract with the NHS in the UK Expand our presence and offering in Ireland through the addition of new sites or the expansion of existing sites Increase revenue sales of Life Molecular Imaging, and focus on products in the pipeline Continue to explore opportunities to replicate our successful partnerships globally Develop PET-CT service offerings across our northern European territories Explore opportunities to offer synergies across the Group by expanding our radiology market share in southern Africa Explore opportunities to expand into new territories Completion of the 18-month refurbishment programme of radiopharmacy facilities Completion of the additional radiopharmacy facility and commencement of operations

We experienced good operational year-on-year growth across all territories during the 2019 financial year, with our core operational business delivering a 4.3% growth. Taking into account once-off costs relating to the upgrade of our cyclotrons, which are critical components in our PET-CT service offerings, the business experienced revenue growth of 13.4%. While we continue to be pressured by rising costs, declining tariffs, and challenges in radiography recruitment, the ongoing focus of growth, efficiency and partnership, has ensured that the business is well positioned for sustainable future growth.

Alliance Medical

In the UK, Alliance Medical continues to work in partnership with the NHS, which is a critical stakeholder for the business. We are committed to working with the NHS to drive value creation.

To ensure that our equipment has the necessary longevity to meet the increased demand over the remaining term of our PET wave 1 and wave 2 contracts with the NHS, in terms of which we provide PET-CT scans across the UK, this year we embarked on a refurbishment programme to complete vital upgrades to our cyclotrons at two of our sites.

Once completed, the refurbished cyclotrons will substantially increase production reliability and further increase capacity, which will cater to the continued growth in demand. Unfortunately, the upgrades caused unavoidable short-term challenges due to limited capacity during the upgrade.

Despite the impact on our performance in 2019, which will likely continue into the first half of the 2020 financial year, we achieved a robust growth during the year with an increase of 15.9% PET-CT volume growth and we anticipate that PET-CT scans provided by Alliance Medical will continue to experience robust volume growth over the medium term.

Our UK diagnostic imaging business continues to focus on partnership solutions with hospital trusts, with MRI and CT volumes growing due to a variety of initiatives. Diagnostic imaging was impacted by cyclical lower-volume growth. Alliance Medical benefitted from the move away from mobile infrastructure on short-term, or spot, contracts to static facilities and longer-term contracts. We furthermore acquired three high-end scanning facilities during the year targeting private clients.

Private pay markets in Italy expanded during the year, a trend which we expect to continue in 2020. Private MRI and CT scan volumes grew by 8.3% on the back of increased volumes and acquisitions. We also exited lower margin static contracts which will enhance margin in the medium term.

The Italian market comprises independent practices and, due to our footprint, we are exploring opportunities for strategic acquisitions and consolidations secure further growth of our share in the market.

Ireland continued to experience solid year-on-year volume growth in clinics and statics due to strong activity and sales stimulation, with a 7.9% increase in scan volumes. We opened three new imaging centres – in Cherrywood, Wexford and Portlaoise – and acquired the Cork Community Imaging facility. We will ensure that the platform is geared for ongoing growth into the new financial year.

In northern Europe, we experienced strong, organic revenue growth of 5.7%. Increased PET-CT activity, mainly in Norway, was offset by reduced mobile utilisation.

Life Molecular Imaging (formerly Piramal Imaging), acquired in June 2018, remains a high growth area for the Group. During the year, we focused on driving sales of Neuraceq (flobertaben F18), Life Molecular Imaging's globally approved radioactive tracer used to assist in the diagnosis of Alzheimer's disease. We have seen increased take-up of this product in new countries, and are also exploring opportunities to introduce this product in China.

We acquired this business knowing that there would be a significant upfront cost involved. We are experiencing a delay in reimbursement by healthcare funders, pending the development of disease-modifying drugs for the treatment of Alzheimer's disease. Once approved, which we expect to be in the next two to three years, we estimate a market size of US$300 million. Furthermore, a pipeline of new products is progressing well through various stages of development. We are positive about the prospects of this business going into the next year.

Geographical segment	Year-on- year trend %		2019		2018
UK
Diagnostic imaging
Statics (scans)			298 186		281 020
Mobile (days)			11 070		10 051
Mobile utilisation (%)			82%		81%
Molecular imaging
PET-CT (scans)			96 956		83 639
Radiopharmacy (doses)1			106 690		106 123
ITALY
Diagnostic imaging
MRI and CT (scans)5			268 820		259 814
Other diagnostic imaging (scans)2,5			689 700		603 532
Other3			1 735 951		1 692 643
IRELAND
Diagnostic imaging
MRI and CT (scans)			201 029		189 070
Other4			49 734		43 396
Molecular imaging
PET-CT (scans)			1 747		1 740
NORTHERN EUROPE
Diagnostic imaging
Other			23 202		22 627
Urology and other (number of patients treated)			4 632		4 455
Molecular imaging
PET-CT (scans)			4 641		2 632
Radiopharmacy (doses)			68 776		60 071
SPAIN
Diagnostic imaging
Other4			97 068		102 541
Molecular imaging
PET-CT (scans)			783		3 406

¹ As part of our PET wave 2 contract, some third-party customers were required to source their fluorodeoxyglucose (FDG) elsewhere.
² Includes, among others, x-rays, mammograms, ultrasound, and mammo-tomosynthesis.
³ Includes a number of patients for physiotherapy examinations, laboratory blood tests, and doctor-patient examinations.
⁴ Includes x-ray, ultrasound and other diagnostic imaging scans.
⁵ Prior year adjusted for Italian acquisitions.

POLAND

Poland's NFZ comprises approximately 80% of Scanmed's revenue. Our focus on delivering high-quality medical services remains and we continue to explore ways to improve and grow our service offering. Pleasingly, we opened an additional cathlab in Poland during the year.

Revenue source (PLN million)	Year-on- year trend		2019		2018		2017
NFZ			286.8		274.8		238.6
Private			75.4		69.3		79.5
Total revenue			362.2		344.1		318.1

Beds, units and facilities

Category	Year-on- year trend		2019		2018		2017
Beds1			579		624		624
Cardiac units			12		12		12
Medical facilities			41		40		40

Operational information

Number of procedures (‘000)	Year-on- year trend		2019		2018
Blachownia Hospital			5 721		6 334
St Raphael Hospital			15 116		13 180
Weiss			24 942		26 453
Gastromed			15 671		14 496
Sport Klinika			9 612		10 411
Cardiology2			19 441		18 865

1	The number of beds declined as a result of new regulations by the Ministry of Health in Poland that required an increase in the number of nurses per bed introduced from January 2019 (resulting in deregistration of beds across the industry), as well as renovating of Blachownia Hospital where one ward was temporarily closed.
2	Includes procedures performed in Scanmed Kardiologia, Polska Grupa Medyczne (PGM) and Carint.