INTEGRATED REPORT 2019

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How we created value for our stakeholders

    FINANCIAL CAPITAL

Inputs
  • Equity of R17 491 million (2018: R16 202 million)
  • Net debt of R11 318 million (2018: R14 950 million)
Strategic focus areas
Outcomes
✓
  • R2 871 million profit after tax (2018: R1 914 million) and R5 727 million normalised EBITDA (2018: R5 535 million)
✓
  • 7.7% growth in cash generated from operations
✓
  • 93 cents per share (cps) dividends paid (2018: 88 cps)
✓
  • Appropriate management of debt and equity with a net debt: normalised EBITDA ratio of 1.96 times (2018: 2.73 times) and interest cover ratio of 5.6 times (2018: 5.7 times)
  • Headline earnings per share of 88.7 cps (2018: 108.8 cps)
Actions to enhance our outcome
  • Focus on operational excellence, including lean operations, clinical excellence, integration for value, asset portfolio review and capex optimisation
✓ Positive   Negative

    MANUFACTURED CAPITAL

Inputs
  • R1 166 million (2018: R878 million) invested in maintenance capex
  • R894 million (2018: R1 366 million) invested in growth capex
    Southern Africa
  • 49 acute hospitals, seven acute rehabilitation and nine mental health facilities
  • 391 Life Employee Health Solutions clinics (2018: 381)
  • 9 136 beds (2018: 9 055) and 302 hospital theatres (2018: 304)
  • Five oncology (2018: five) and 329 renal dialysis stations (2018: 318)
    Alliance Medical
  • 206 diagnostic imaging units (2018: 200), 48 molecular imaging units (2018: 51) and nine radiopharmacy units (2018: nine)
    Scanmed
  • 41 medical facilities, 579 beds and 12 cardiac units in Poland
Strategic focus areas
Outcomes
✓
  • Improved hospital efficiency as a result of capital investment and environmentally friendly facility upgrades
✓
  • Technological superiority recognised by patients and markets, supporting brand strength and differentiation internationally
Actions to enhance our outcome
  • Offering relevant, world-class facilities and equipment to ensure optimal treatment
  • Repurposing or refurbishing our existing infrastructure
  • Expansion to offer high-quality, affordable diagnostic imaging services in southern Africa by integrating diagnostic services into our infrastructure; leveraging Alliance Medical’s expertise
  • Completing vital upgrades to our equipment
✓ Positive   Negative

    INTELLECTUAL CAPITAL

Inputs
  • Our governance framework
  • Background systems (including IT) and analysis models
  • Alternative reimbursement pricing models
  • Legal and statutory compliance understanding and monitoring processes
  • Quality policies, procedures and standards
  • Formulary procurement processes
  • A nursing dashboard in southern Africa
  • United States (US) Food and Drug Administration (FDA) approved niche isotope

For more information, refer to our corporate governance overview

Strategic focus areas
Outcomes
✓
  • New business lines and service offerings developed
✓
  • Ability to drive efficiencies throughout the business
✓
  • Clinical governance, quality and safety board sub-committee ensures quality standards are maintained and improved
✓
  • IT utilised to drive standardisation, reduction in administrative costs and economies of scale
✓
  • Knowledge sharing of best practice collaboration among territories
Actions to enhance our outcome
  • Embedding our newly developed digital strategy throughout the business
  • Focus on governance maturity
  • Driving compliance with established processes and systems at the point of care
✓ Positive   Negative

    HUMAN CAPITAL

Inputs
  • 20 436 employees across the Group, comprising doctors, nurses, radiologists, pharmacists and other skilled employees (2018: 19 939)
  • R201 million invested in training in southern Africa (2018: R177 million)
  • Remuneration practices
  • Transformation policies
  • Agency agreements
  • A leadership team which sets a culture of ethical conduct throughout the Group

View more on our leadership

Strategic focus areas
Outcomes
✓
  • R8 860 million (2018: R8 064 million) paid to employees in salaries and benefits
✓
  • 1 005 nurses were enrolled for training (2018: 1 075) and 562 nurses graduated from the Life College of Learning (2018: 454)
✓
  • 1 083 learnerships provided in southern Africa (2018: 722) 32 apprentices on programme in the UK (2018: 15)
Actions to enhance our outcome
  • In southern Africa, focus on recruiting and developing talent, enhancing our employee value proposition (EVP), and investing in robust leadership development initiatives
  • Internationally, optimising the mix of permanent and contract staff
  • Develop our employees’ expertise in different modalities to support employee retention
✓ Positive   Negative

    SOCIAL AND RELATIONSHIP CAPITAL

Inputs
  • The brands and reputation of Life Healthcare, Alliance Medical and Scanmed
  • Relationships with 3 800 healthcare professionals in southern Africa (where work is on an associative basis)
  • Healthcare funder relationships and network agreements
  • Community relationships
  • Government partnerships and relationships
  • Supplier contracts and agreements
  • Relationships with shareholders
Strategic focus areas
Outcomes
✓
  • Partnerships developed and enhanced
✓
  • Reputation enhanced through collaboration with partners such as the Christie National Health Service (NHS) Foundation Trust (the Christie)
✓
  • Doctor shareholding
✓
  • Patient experience, recommendation and clinical outcome
✓
  • Maintained level 4 broad-based black economic empowerment (B-BBEE) rating
Actions to enhance our outcome
  • Building long-term relationships with our stakeholders to differentiate our offerings
  • Cultivate relationship with specialists within our facilities
  • Increase preferred network deals
  • Engaging with governments
  • Monitoring relationships with our suppliers
✓ Positive   Negative

    NATURAL CAPITAL

Inputs
  • Continued investing in renewable energy solutions
  • Monitoring of water usage through water meters – 765 055 kℓ water used (2018: 1 089 999 kℓ)
  • 135 083 292 kWh electricity consumed (2018: 142 934 448 kWh)
Strategic focus areas
Outcomes
✓
  • Creating awareness to reduce water utilisation, installations of more efficient autoclaves and boreholes, as well as the installation of water metering for improved monitoring of water usage
✓
  • Lowered grid electricity reliance through solar initiatives, heat pumps and light-emitting diode (LED) lighting projects
✓
  • Increased initiatives to reduce waste
✓
  • Improved usage of more environmentally friendly gases
Actions to enhance our outcome
  • Installing solar capacity at seven additional facilities in southern Africa during 2020
  • Explore opportunities to reduce water consumption
✓ Positive   Negative