Our strategy

Our purpose of Making life better can only be successfully fulfilled by utilising a coherent strategy which is understood and implemented across the whole Group.

Our strategy is informed by various external and internal factors, including our operating environment, material matters, risks and opportunities and the availability of capital resources. Proactive engagement with our key stakeholders in relation to these internal and external factors continues to shape our strategy.

Our strategy has four key pillars which form the foundation for much of what we set out to do. Whether we embark on a restructuring programme, or implement a new business line, the impact must be measurable in terms of either Quality, Growth, Efficiency or Sustainability for the Group. While many functions across our Group are involved in delivering our strategy, the key enablers are our people, technology, data and analytics.

SHORT TERM 2021 – 2023:
Execute

MEDIUM TERM 2022 – 2025:
Transform

LONG TERM 2025 ONWARDS:
Innovate

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					Strategic pillars
					QUALITY		GROWTH		EFFICIENCY		SUSTAINABILITY
			STRATEGIC PRIORITY		Deliver clinical excellence and a leading patient experience		Drive continued growth while diversifying our revenue and earnings		Deliver operational excellence		Ensure the long-term viability and sustainability of our business
			STRATEGIC OBJECTIVES		Deliver patient-centred care aligned with clinical best practice Reduce variation in clinical care Drive quality through centres of excellence		Deliver growth in existing lines of business Leverage existing assets and capabilities to grow new lines of business and diversify revenue		Stabilise operating margins in SA Deliver operational leverage internationally		Deliver responsible environmental, social and governance (ESG) practices Link material ESG imperatives directly to our strategic priorities
STRATEGIC TIME HORIZONS
SHORT TERM 2021 – 2023 Execute			STRATEGIC INITIATIVES		Continue to standardise care pathways and formularies Collect and report on patient reported outcomes		Expand complementary services Execute SA imaging services deals Increase global NeuraCeq® production capability		Increase SA bed occupancy levels Improve cost control across the business		Deliver financial stability by improving margins and reducing employee turnover Ensure business continuity (back-up generator power and water storage) IT system modernisation and enhance business continuity and disaster recovery capabilities
MEDIUM TERM 2022 – 2025 Transform					Enhance quality measurement and process improvements Pilot renal dialysis and other value-based care products		Pilot value-based care projects Prepare for UK PET-CT contract renewal process Roll out community diagnostic centres in the UK		Drive nursing excellence programme Leverage scale to improve procurement and contracting		Reduce grid-tied electricity with additional solar installations Develop group-wide environmental measurement capability Formalise environmental sustainability strategy with targets
LONG TERM 2025 ONWARDS Innovate					Develop and introduce integrated value-based care products		Develop and introduce multiple value-based care products Increase public-private partnership models		Use technology, data and analytics to enable adaptable, innovative, decisive and insight-driven decisions		Continue to be a good and ethical corporate citizen and deliver measurable reduction in our environmental impact

 

					Strategic enablers
						People		Technology, Data and Analytics
			STRATEGIC PRIORITY			Become an international employer of choice		Modernise our IT environment and create value through the use of data and analytics
			STRATEGIC OBJECTIVES			Embed a culture of transformation, diversity and inclusion Attract, motivate, reward and retain our talented people		Deliver and maintain a secure, modern IT environment Embed data-driven decision making within the organisation Network modernisation and cloud migration
STRATEGIC TIME HORIZONS
SHORT TERM 2021 – 2023 Execute			STRATEGIC INITIATIVES			Develop and retain a highly skilled, competent nursing workforce Increase doctor support and retention Implement measures to reduce employee turnover in a competitive market Deliver on transformation, diversity and inclusion targets		Enhance cyber security capability Decommission legacy systems
MEDIUM TERM 2022 – 2025 Transform						Continue to review reward and retention philosophy Run clinical and professional training programmes to ensure we have highly skilled, competent clinical workforce delivering quality care Deliver on transformation, diversity and inclusion targets		Implement digital clinical and nursing excellence pilot projects Implement cloud migration of systems and data Enhance data and analytics capabilities to optimise performance and improve quality Integrate international IT environment
LONG TERM 2025 ONWARDS Innovate						Continue engagement with employees and other stakeholders to ensure that we remain an employer of choice Deliver on transformation, diversity and inclusion targets		Digital technology platform and advanced analytics underpin the delivery of high-quality, cost-effective care

 

The Group's strategic goals are incorporated under four strategic pillars that are approved by the Board annually and updated where relevant. Life Healthcare's group executive committee is responsible for embedding these pillars Group-wide and monitoring progress.

	Good progress		Limited progress		No progress
	Value created		Value preserved		Value eroded

 

Strategic goals			See our four strategic pillars.			Our strategic enablers are key to the implementation of the Group's strategy. Regular strategic progress is communicated to the Board.		See our strategic enablers.
STRATEGIC PILLAR		Key measures	Progress in 2021		Value created preserved or eroded	Outlook		Reference to further information
		Group Chief Medical Officer appointment	Permanent appointment made			Appoint SA Chief Medical Officer		Quality report
		Quality metrics	Most quality metrics improved, although some were impacted by COVID-19 case mix			Drive continued improvement in metrics and reporting		Quality report
		Patient experience	Consistently high feedback with improvement in 2021			Drive continued improvement in patient experience		Quality report
		Standardise care pathways and formularies	Some progress made during the year			Develop and trial additional care pathways for renal dialysis and oncology, increase formulary compliance		Quality report
		Stabilise SA operating margins	SA normalised EBITDA margin 17.1% (2020: 16.8%), but still below 2019 level of 23.8%			Seek further savings in operating costs through more efficient nursing care and usage of protective equipment expenditure and reduced corporate overheads		SA operational review
		Improved margins in AMG	Delivered improved underlying margins (excluding COVID-19 contracts)			Increased volumes in imaging services and cyclotrons to deliver operating leverage		International operational review
		EBITDA margin	Group normalised EBITDA margin 18.6% (2020: 17.4%)			Increase Group margin as a result of improved operating performances across SA and international		Group CFO’s review
		Improved radio-pharmacy supply	Radiopharmacy supply 96.5% (versus target of 95.0%)			Improve manufacturing uptime and efficiencies through refurbished cyclotrons		International operational review
		Reduce nursing employee turnover and agency usage	Nursing turnover remains high as does agency usage, and is higher versus 2020			Enhance employee value proposition to attract and retain employees		People report
		Net debt to normalised EBITDA	Reduced to 1.82 times (2020: 2.96 times) following good cash generation and Scanmed disposal			Keep net debt ratio within bank covenants		Group CFO’s review
		B-BBEE Level	Level 3 obtained (2020: Level 4)			Maintain Level 3 rating or better		SET report
		80% female employees by 2024	81.4% female employees in SA (2020: 79.6%)			Continue to drive ratio higher		People report
		Increase diversity of Board members	38% female Board members			Continue to increase Board diversity		Governance report
		ESG rating	MSCI Global ESG rating improved to AAA (from A)			Increased focus on ESG and introduce ESG targets in 2022		SET report
		Increase NeuraCeq® production capability	This has been initiated following the FDA approval of Aduhelm®			Execute third-party manufacturing agreements in Asia and Latin America and continue to grow international sales force		International operational review
		Expand complementary services	Growth in renal footprint and increased utilisation of services has led to revenue and normalised EBITDA growth in 2021			Expand offerings in renal dialysis and oncology		SA operational review
		Execute SA imaging strategy	Progress has been made in acquiring imaging businesses			Execute and complete imaging transactions		SA operational review
		Earnings per share	NHEPs growth >100% to 112.7 cps (2020: 61.0 cps)			Continue to grow earnings per share		Group CFO’s review
		Capital expenditure	R1.9 billion spent in 2021 (2020: R2.0 billion)			Fund maintenance projects to retain fit for purpose facilities and fund growth opportunities		Group CFO’s review