Joint Statement by Baillieu Limited Chairperson David Trude and Managing Director Gavin Powell

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Sonic Healthcare (SHL) SNAPSHOT

Profile: Sonic Healthcare Limited (SHL) is a global medical diagnostics company headquartered in Sydney. It has pathology and laboratory operations around the world, operating under numerous brands including Melbourne Pathology and Capital Pathology. In Australia, SHL also offers radiology and diagnostic imaging services as well as a range of primary care services ranging from general practice clinics, community and home nursing services to primary care research programs.

History: In 1987, SHL listed on the ASX under the name Sonic Technology Australia Limited and acquired its first pathology practice, Douglass Laboratories. In 1995, SHL changed its name to Sonic Healthcare Limited. SHL acquired the SGS group of practices in 1999, expanding into several new Australian markets as well as NZ. Since then, SHL has expanded across the globe and into radiology and clinical services. More recently, in January 2019, SHL acquired Aurora Diagnostics for US$540m (c.A$750m), funded by a A$928m equity raising.

Earnings composition: In FY19, the Laboratory segment generated $5.2bn (85%) of revenue. The Imaging segment reported $500m (8%) in revenue and the Other segment reported $447m (7%).

Most recent result – FY19: Revenue increased 11% on the prior corresponding period (pcp) to $6.1bn (7% on a constant currency basis). Laboratory revenue increased 12% on the pcp to $5.2bn (8% constant currency). US Laboratory revenue grew 18% on the pcp on a constant currency basis, including revenue from the Aurora Acquisition. This was despite impacts on revenue from Protecting Access to Medicare Act fee cuts. Imaging revenue increased 6% to $500m. Group EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) rose 10% on the pcp to A$1.1bn (7% constant currency). Net profit increased 16% on the pcp to A$550m. SHL sold its 85% stake in GLP Systems in June 2019 for a A$49m after tax gain. Earnings per share (EPS) increased 9% on the pcp to A$1.22. A dividend of A$0.51 was declared, bringing the full year dividend to A$0.84, up from A$0.81 in the pcp.

Company outlook: SHL expects 6-8% constant currency FY20 EBITDA growth on A$1,052 in FY19 (adjusted for impact of AASB 15). “Capital expenditure is expected to be significantly lower” in FY20. Guidance excludes potential future acquisitions.

Important dates: Ex-dividend date is 10 September 2019. Payment date is 25 September 2019. AGM is scheduled for 19 November 2019.

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