Advisory

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Sonic Healthcare advises that it is now forecasting EBITDA for FY 2024 of approximately A$1.6 billion on revenues of approximately $8.9 billion. Revenue growth continues to be strong at 6% for the 4 months to 30 April 2024 (following 6% in H1 FY 2024). However, profit growth has been lower than expected, in part due to inflationary pressures on the business, and exacerbated by currency exchange headwinds. In addition, a number of margin improvement initiatives planned for completion in H2 FY 2024 have been slower to deliver than expected and will contribute to further earnings growth in FY 2025. The inflationary pressures are expected to ease going forward, with headline inflation rates in Sonic’s main markets already reduced to a range of 1.4% to 3.6%.

Based on preliminary forecasts, on a FY 2024 forecast constant currency basis, Sonic expects to
achieve EBITDA of approximately A$1.70 – 1.75 billion in FY 2025. Guidance for FY 2025 will be updated/confirmed at Sonic’s full year results’ release in August 2024.

Sonic Healthcare’s CEO, Dr Colin Goldschmidt said: “The 2024 financial year has been one of
transition for Sonic Healthcare, moving away from pandemic conditions into a more normal business
environment. Our current robust topline growth, organic and non-organic, in a setting of inflationary
cost pressures, have combined to delay the completion of our programs to align labour costs more
closely with post-pandemic conditions. These unique business conditions have also made forecasting
our earnings unusually difficult this year. FY 2024 has also been a year of investment for future growth. In particular, the sizeable acquisitions of SYNLAB Suisse and Dr Risch (Switzerland), PathologyWatch (USA) and the Hertfordshire & West Essex contract win (UK), while initially earnings and/or margins dilutive, will all yield strong earnings growth and returns on investment into the future.

“Overall, the company remains in a very strong position, both financially and in terms of market
positioning. We remain well set for growth in revenues and earnings going forward, including realising
over the next two years the synergies and enhanced returns from the investments made this year. In
managing our costs, especially labour costs, we have been mindful to protect our brands and to support
our ongoing strong growth and the high quality of essential services we provide.”