ANNUAL RESULTS PRESENTATION FY2015 Andrew Ferrier Chairman of the Board of Directors Ian McCrae Chief Executive Officer Graeme Wilson Chief Operating Officer Orion Health 02 Annual Results Presentation FY2015 Important Notice This presentation is given on behalf of Orion Health Group Limited (“OHE”) Information in this presentation: - is for general information purposes only, and is not an offer or invitation for subscription, purchase, or recommendation of securities in OHE; - should be read in conjunction with, and is subject to, OHE’s Annual Report, market releases, and information published on OHE’s website (www.orionhealth.com); - includes forward-looking statements about OHE and the environment in which OHE operates, which are subject to uncertainties and contingencies outside of OHE’s control – OHE’s actual results or performance may differ materially from these statements; All currency amounts are in NZ dollars unless otherwise stated. The use of n/m means not meaningful due to statistical insignificance. OHE results are reported under NZ IFRS. This announcement includes non-GAAP financial measures which are not prepared in accordance with NZ IFRS. - the information contained in this presentation should be read in conjunction with the financial statements and accompanying notes - due to rounding, the numbers presented throughout this presentation may not add up precisely to the totals presented. Percentages may not precisely reflect the presented figures as these are based on unrounded numbers - includes statements relating to past performance, which should not be regarded as a reliable indicator of future performance; and - may contain information from third parties believed to be reliable, however, no representations or warranties are made as to the accuracy or completeness of such information 2015 © Orion Health™ group of companies Orion Health 03 Annual Results Presentation FY2015 Investor Calendar Upcoming Key Dates Annual Results announced Annual Report released AGM Next quarterly business update 26 May 2015 26 May 2015 15 July 2015 Late July FY2016 Interim Results November 2015 © Orion Health™ group of companies Orion Health 04 Annual Results Presentation FY2015 Highlights Total Operating Revenue Increased R&D capacity by Successfully completed Significant increase of Net Cash* balances of $164m 27% $125m 42% $95m 7% increase from FY2014 from 363 people to 461 Initial Public Offering of Orion Health Shares in Annualised Recurring Revenue as at 31 March 2015 * Includes cash, cash equivalents and term deposits 2015 © Orion Health™ group of companies Orion Health 05 Annual Results Presentation FY2015 We Have Had a Big Year Recognised vast opportunity in front of us Secured funds through IPO to execute our growth strategy Significant strategic win in United States insurer (payer) market with Cal INDEX Strategic wins in the UK, Canada and NZ 2015 © Orion Health™ group of companies Orion Health 06 Annual Results Presentation FY2015 We Are Moving Forward In a Market In Disruption Regulatory change shifting to value based care, from fee for service Focus on care coordination to combat burgeoning chronic disease Consumerisation of healthcare and patient engagement Urgent need for healthcare providers and funders to connect, share and act on information 2015 © Orion Health™ group of companies Orion Health 07 Annual Results Presentation FY2015 The Opportunity in Healthcare is Immense # 01 +7% HCIT market is huge— estimated at USD 56.7b by 2017, growing 7% every year* Shift globally towards PHM requires a solid IT infrastructure We are a leader in the fastest growing market segments: big data, disease management, care coordination Industry analysts recognise us as a technology leader The opportunity is ours for the taking * Healthcare IT Market, Markets and Markets, p3 2015 © Orion Health™ group of companies Orion Health 08 Annual Results Presentation FY2015 We Are Well Positioned to Get Ahead of the Curve We have the funds to deliver We released new generation solutions We have momentum in development, poised for the next significant product release in February We aim to deliver the health data platform of choice in all markets 2015 © Orion Health™ group of companies Orion Health Annual Results Presentation FY2015 09 FY2015 Performance 2015 © Orion Health™ group of companies Orion Health FY15 Performance Annual Results Presentation FY2015 010 Summary Financial Performance FY2015 results reflect execution of strategy FY2015 FY2014 NZ$m % Change 53.7 44.5 21% Non-recurring revenue 110.3 108.5 2% Total Operating Revenue 164.1 153.0 7% Other Income 5.1 10.2 -50% Total Income 169.2 163.2 4% Operating Expenses 221.2 165.3 34% Loss Before Income Tax (50.7) (1.7) n/m 10.1 (0.6) n/m (60.8) (1.1) n/m NZ$m Recurring revenue Income Tax expense/(credit) Loss After Income Tax - FY2015 Operating Revenue $164m, up 7% - All regions experienced growth except for North America - North American market in transition to PHM, driven by regulatory change with some volatility in contract closure - Rise of Payers as key market leaders, we have secured three key customers - US Operating Revenue constrained by shift from perpetual license to subscription revenue - Strong performance from United Kingdom and New Zealand, delivering 60% and 23% revenue growth respectively - Invested in Research and Development (R&D), adding 98 net new R&D personnel - Loss Before Income Tax includes $2.2m of costs related to the Initial Public Offering (IPO) of Orion Health shares - Loss After Income Tax includes a $7m deferred tax writeoff Note: Other Income in FY2014 above includes the gain on sale of the Healthlink business of $6.4m. The remainder of Other Income during FY2014 and FY2015 primarily relates to grant income. Note: LBIT includes share of profit of associate and Net Finance Income - $145.5m of new capital raised via June 2014 placement and November 2014 IPO of Orion Shares - $95m in cash, cash equivalents and term deposits at 31 March 2015 2015 © Orion Health™ group of companies Orion Health FY15 Performance Annual Results Presentation FY2015 011 Operating Revenue Mix Recurring Revenue represented 33% of Operating Revenue Operating Revenue Mix - Recurring Revenue made up 33% of Operating Revenue in FY2015, up from 29% in FY2014 - Recurring Revenue comprises Managed Services Revenue from customers paying subscription fees and Support Services Revenue from perpetual licence customers 19% 18 % F Y2015 45% F Y2014 11% 41% - Ongoing transition from perpetual licences to full subscription model will drive future Recurring Revenue growth - Target over 50% Recurring Revenue over next five years 14% 30 % 22 % Support Services Managed Services Perpetual License Implementation Services 2015 © Orion Health™ group of companies Orion Health FY15 Performance Annual Results Presentation FY2015 012 Annualised Recurring Revenue ARR increased 42% to $63m Annualised Recurring Revenue NZ$m - Consistently strong growth in Annualised Recurring Revenue (ARR) over last few years 70 +42% 60 50 +43% 40 +76% 30 20 13 16 18 31 March 2011 31 March 2012 63 - ARR at end of FY2015 was $63m, up 42% from the end of FY2014 - Transition to subscription revenue largely complete for United States Healthier Populations business 44 31 - Commencing transition in other markets - This growth includes new United States payer (insurer) customers added in FY2015 on per-member-per-year subscription fee model 10 0 31 March 2010 North America 31 March 2013 UK, Ireland & EMEA 31 March 2014 31 March 2015 Asia Pacific Note: ARR is used to estimate the Managed Services and Support Services Operating Revenue already secured for the next 12 months at a particular time. Refer to the Annual Report FY2015 for a description on the calculation method. 2015 © Orion Health™ group of companies Orion Health FY15 Performance Annual Results Presentation FY2015 013 Services Margins Investing in expanding service capacity FY2015 FY2014 71.5 60.9 17% 9.3 18.5 -49% 13% 30% Operating revenue 30.5 28.1 9% Margin 24.8 23.5 6% Margin % 81% 84% 23.2 16.4 42% 2.4 4.2 -44% 10% 26% NZ$m NZ$m % Change Implementation Services Operating revenue Margin Margin % Support Services Managed Services Operating revenue Margin Margin % - The decline in Implementation Services margin a result of United States performance, all other regions delivered acceptable margins • Significant number of large-scale United States customers were secured in FY2014 and challenge of scaling implementation capability adversely impacted margin in FY2015 • These projects included many interfaces to connect providers to our Healthier Populations solutions. While low margin, these interfaces increase customer utility and embed our solutions long term • Margin improvement expected in FY2016 as FY2014 projects come to an end - Managed Services margin reflects investment in building capacity to host new Healthier Populations solution in public cloud environment and in expanding capacity for existing private cloud customers 2015 © Orion Health™ group of companies Orion Health FY15 Performance Annual Results Presentation FY2015 014 Other Operating Expenses Increase primarily due to investment in R&D FY2015 NZ$m FY2014 NZ$m % Change - New capital raised in FY2015 directed to funding the significant ramp up in R&D hiring that began in late 2013 OTHER OPERATING EXPENSES Research & Development 48.7 34.3 % of Group Operating Revenue 30% 22% Sales & Marketing 37.4 36.3 % of Group Operating Revenue 23% 24% General & Administration 46.4 35.6 % of Group Operating Revenue 28% 23% 132.5 106.1 Other Operating Expenses - R&D headcount has grown from 363 to 461 in FY2015 42% 3% 30% - Sales & Marketing expenses flat year-on-year, expect increase moving forward - Increase in General & Administration expenses includes impact of foreign exchange gains and losses, increased investment in Security and People functions, and new office openings 25% Note: IPO related costs of $2.2m are included in the General & Administration costs above in FY2015. 2015 © Orion Health™ group of companies Orion Health FY15 Performance Annual Results Presentation FY2015 015 Investment in Research and Development Accelerated product development R&D investment NZ$m 30% 60 50 25% 21% 24% 22% 30% 25% 40 20% 30 R&D Headcount FY2015 461 FY2014 363 FY2013 279 FY2012 297 FY2011 195 15% 49 20 10 Year 16 24 27 FY2012 FY2013 34 10% 5% 0 0 FY2011 R&D Expense FY2014 FY2015 R&D Expense as % of Operating Revenue - Significant increase in R&D headcount over the last two years has enabled accelerated enhancement of all solutions - New versions of all solutions launched at annual global Health IT conference, HIMSS, April 2015 - Approach to R&D is based on embracing latest technologies; innovating through design; open architecture; interoperability and scalability 2015 © Orion Health™ group of companies Orion Health 016 FY15 Performance Annual Results Presentation FY2015 Operating Revenue by Region and Solution Group Growth in all regions except North America Operating Revenue by Region Operating Revenue by Solution Group 23 % 24% 21% 23 % F Y2015 F Y2014 F Y2015 F Y2014 49% 13 % 66% 19% 56% 21% 58 % 27% FY2015 NZ$m North America UK, Ireland & EMEA Asia Pacific 95 30 38 FY2015 NZ$m Intelligent Integration Smarter Hospitals Healthier Populations 39 44 81 2015 © Orion Health™ group of companies Orion Health FY15 Performance Annual Results Presentation FY2015 017 Highlights: North America United States Healthier Populations Recurring Revenue up 24% US Healthier Populations FY2015 NZ$m FY2014 NZ$m % Change North America Operating Revenue NZ$m Support Services 3.8 4.4 -14% 120 Managed Services 20.4 15.0 35% Recurring Revenue 24.1 19.4 24% Recurring Revenue (%) 44% 31% 101 95 100 15.0 -81% 28.7 -3% 0.1 - n/m Non-Recurring Revenue 30.6 43.7 -30% Non-Recurring Revenue (%) 56% 69% US Healthier Populations 54.7 63.1 Other 73 65 40 20 2.8 27.8 Implementation Services 80 60 Perpetual Licenses -13% - US market in transition to PHM driven by regulatory change 27 30 FY2014 FY2015 0 Intelligent Integration Healthier Populations - Incentive programmes are changing and Payers emerge as key market segment - Transition has caused volatility in contract closures in latter part of year - Operating Revenue constrained by transition of Healthier Populations business from perpetual license to subscription revenue (81% reduction in perpetual license revenue, 35% increase in Managed Services revenue) - Strong interest in latest Healthier Populations release at HIMSS conference in April 2015 - Large-scale provincial care coordination deployment secured in late 2014 will drive Canadian growth in FY2016 Note: The Smarter Hospitals Solution is not currently sold in North America - Growth strategy: • Targeting large funder and provider networks at state and regional levels with Healthier Populations solutions 2015 © Orion Health™ group of companies Orion Health FY15 Performance Annual Results Presentation FY2015 018 Highlights: UK, Ireland & EMEA Increase in operating revenue of 51% UK, Ireland & EMEA Operating Revenue $NZm 35 30 30 25 10 20 - Completed first stage of Smarter Hospitals Enterprise implementation for premiere private hospital customer in Turkey 20 15 10 5 5 16 9 6 5 FY2014 FY2015 0 Intelligent Integration - United Kingdom was standout performer with 60% revenue growth to $23.6m • Strong run of contracting activity in the U.K with National Health Service (NHS) Trusts and Clinical Commissioning Groups (CCGs) • Secured Smarter Hospitals contract for Sheffield NHS Trust, the fourth largest NHS Trust in the UK Smarter Hospitals Healthier Populations - Trend continues towards wellness, preventative care and care coordination for high-use cohorts - Growth strategy: • Target NHS Trusts, Health Boards, and CCGs in UK • Target large providers in Europe and Middle East to improve hospital efficiency • Target national and regional governments in Europe with regional interoperability and Population Health 2015 © Orion Health™ group of companies Orion Health FY15 Performance Annual Results Presentation FY2015 019 Highlights: Asia Pacific Increase in operating revenue of 19% Asia Pacific Operating Revenue NZ$m 38 40 35 32 30 7 - Reached commercial agreement with all five South Island District Health Boards for a single South Island-wide shared patient administration system 6 - Continued large scale deployment at ACT Health 25 20 28 15 24 10 5 0 1 3 FY2014 Intelligent Integration - Strong growth in New Zealand and South East Asia, delivering 23% and 32% Operating Revenue growth respectively FY2015 Smarter Hospitals - Successful go ‘live’ of first Smarter Hospitals Enterprise deployment in the Philippines - the first of several hospitals for The Medical City group of hospitals - Growth strategy: • Target all of system regional and national Population Health solutions, including private, insurance and non-governmental organisations in Australia and New Zealand • Target private hospital groups in South East Asia with next generation hospital solutions Healthier Populations 2015 © Orion Health™ group of companies Orion Health FY15 Performance Annual Results Presentation FY2015 020 Balance Sheet and Liquidity Strong balance sheet and well funded going into FY2016 Mar–15 NZ$m Mar–14 NZ$m Cash, cash equivalents and term deposits 95.1 12.7 Trade and other receivables 58.7 52.8 Accrued revenue 26.9 20.9 0.9 10.0 13.0 11.7 ASSETS Deferred tax asset Property, plant and equipment Other assets 6.6 1.2 201.3 109.2 - 13.6 Trade, other payables and employee benefits 31.0 22.9 Revenue in advance 53.3 40.6 4.2 3.0 88.5 80.0 112.8 29.2 TOTAL ASSETS - Well funded for continuing growth, with $95m in cash, cash equivalents and term deposits at 31 March 2015 - Net operating current assets and liabilities* have reduced from $9.5m to ($1.6m) with an increased focus on the cash conversion cycle - Revenue in advance (reflecting invoicing customers in advance of recognising revenue) increased 36% while Trade and other receivables increased 11% - Deferred tax reduction relates to a write off of the deferred tax balance in accordance with Group policy LIABILITIES Bank overdraft Other liabilities TOTAL LIABILITIES EQUITY *Note: Net operating current assets and liabilities comprises trade and other receivables, current accrued revenue, current trade and other payables, employee benefits and current revenue in advance. 2015 © Orion Health™ group of companies Orion Health 021 Annual Results Presentation FY2015 Our Evolving Business We continue to evolve our business structure to support the shift from perpetual licensing to a full subscription model. To support this shift we continue to: Expand R&D capacity Expand our service capacity Increase the rate at which we deliver interoperability We are well positioned to scale and execute on the opportunity ahead 2015 © Orion Health™ group of companies Orion Health Annual Results Presentation FY2015 022 Questions? 2015 © Orion Health™ group of companies