Medibank Private : Chairman and CEO presentations (PDF - 281 KB)

18 November 2021

Chairman and Chief Executive Officer AGM presentations

In accordance with the ASX Listing Rules, Medibank releases to the market the addresses to security holders to be delivered by the Chairman, Mike Wilkins AO and the Chief Executive Officer, David Koczkar, at Medibank's 2021 Annual General Meeting to be held at 10.30am today, along with an update to its FY22 outlook.

This document has been authorised for release by Mei Ramsay, Company Secretary.

For further information please contact:

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Medibank Private Limited ABN 47 080 890 259 GPO Box 9999 Telephone 132 331 medibank.com.au

18 November 2021

CHAIRMAN

Good morning and thank you for joining me today for Medibank's 2021 Annual General Meeting.

My name is Mike Wilkins and on behalf of the Board I welcome you from the many First Nations lands we're connecting from this morning. I join you from the land of the Gadigal people of the Eora Nation and I respectfully acknowledge their continuing connection to the land and waters, and thank them for protecting this coastline and its ecosystems since time immemorial. I pay respects to Elders past, present and emerging, and extend that respect to all Aboriginal and Torres Strait Islander peoples joining us today.

I now formally declare the meeting open.

Joining me on video link from Melbourne is David Koczkar, who was appointed as our CEO in May this year. On the phone we have your Board of Directors: Tracey Batten, Anna Bligh, David Fagan, Peter Hodgett, Linda Nicholls, Christine O'Reilly and Gerard Dalbosco, who is standing for election today. Also joining us via audio is our company secretary Mei Ramsay and the full Executive Leadership Team.

We're meeting virtually for a second year due to COVID, just one of the many changes we've all had to make in our lives over the past 20 months. At our AGM last year, Australia had a total of 27,000 cases. Fast forward to this week and we're now looking at an almost seven-fold increase to more than 190,000 cases.

One point of difference to last year is the availability and growing uptake of COVID vaccines. Myself, my fellow directors and every member of the leadership team are among the millions of Australians who have chosen to be fully vaccinated for themselves and for others. It's an issue that Medibank has put its full weight behind, which David will talk to in more detail shortly.

I will now make some comments on our FY21 performance and then hand over to David for his comments, including an update to our FY22 outlook.

COVID has continued to put health at the top of mind in the community and influenced many of the ways we worked in the 2021 financial year.

We provided more health support to more people, with our investments and partnerships with healthcare providers enabling us to continue to respond to our customers' needs in the current environment. Importantly, these investments and partnerships also underpin our transformation to a health company and set us up to meet the broader needs of our customers into the future.

We've continued to support our customers, with Medibank's financial support so far in excess of $300 million. This figure not only reflects the extent of our response to COVID, but also demonstrates our commitment to not profit from the pandemic.

Against the backdrop of COVID, we were pleased to deliver a solid financial performance in FY21 alongside strong policyholder growth, an increase in market share and record customer advocacy. We also maintained our ongoing cost discipline.

Health Insurance operating profit was up 14.4%, while Medibank Health segment profit rose 12.9%. These contributed to an overall Group net profit after tax of $441.2 million. This increase of 39.8% on FY20 also includes the impact of investment income being $117 million above last year when markets were negatively impacted by COVID.

Medibank Private Limited ABN 47 080 890 259 GPO Box 9999 Telephone 132 331 medibank.com.au

18 November 2021

The result enabled us to pay shareholders a full year ordinary dividend of 12.7 cents per share fully franked, some 5.8% above last year. This represents a payout ratio of 87.7% of underlying NPAT, which is marginally above the top end of our target payout ratio range of between 75% and 85%. Importantly, our capital position remains strong with the Board continuing to adopt a prudent approach to capital management.

At Medibank, we believe our obligations extend beyond simply the financial, with environmental, social and governance considerations firmly embedded across every aspect of our business.

On this front, we continue to make progress in a number of key areas, including those aligned to the United Nations Sustainable Development Goals. The COVID pandemic has exacerbated some of these global issues, including gender equality and labour exploitation.

On gender equality, we've continued to deliver against our strong gender targets, including having a 0% pay gap in FY21. At Medibank today, women make up 51% of Group and senior executives. We're very proud of both of these achievements.

Our leadership in this area is part of our broader diversity and inclusion focus on building a team that reflects the community we're part of and a culture that supports everyone to be at their best. Removing barriers for people from diverse backgrounds, including people with a disability, also continues to be a focus for us.

Amongst many other things, COVID has also tightened supply chains, which in turn has increased the risk of modern slavery in some jurisdictions around the world. We set out the nature of our operations and supply chain in our first modern slavery statement last year. Later this year we will report on how we continue to address the risk of modern slavery including our work to further assess and engage with our suppliers.

Another area of ongoing focus for Medibank is our commitment to reconciliation and greater health equity for Australia's First Peoples. This has been at the heart of our first 4 Reconciliation Action Plans, just as it will be for the 5th plan which we will release early next year.

During the year we rolled out training to our people in order to build a greater understanding of the culture, history and perspectives of Traditional Owners. Additionally, we are partnering with the Australian Indigenous Doctors' Association to support better health access, experiences and outcomes for Aboriginal and Torres Strait Islander people.

COVID has further highlighted the health gap that persists in Australia, with Medibank providing support to one Indigenous community for the purchase of personal protective equipment, hand sanitiser, bed linen and medications. But COVID has also demonstrated the incredible strength and resilience of First Australians. On the cover of our sustainability report is Captain Sanitiser from one of our partners, Thamarrurr Youth Indigenous Corporation. This community leader turned super hero set off from Bright in June on a 6,000km motor bike ride to spread messages of COVID safety and empowerment to young people along the way.

We've also continued to progress our environmental agenda in our capacity as a corporate leader and health company that recognises the health impacts of climate change. This includes a commitment to Net Zero by 2050 and aligning our reporting to the recommendations of the Task Force for Climate-related Financial Disclosures. As part of this we completed a climate scenario analysis to look at the risks and opportunities of climate change on our business.

Medibank Private Limited ABN 47 080 890 259 GPO Box 9999 Telephone 132 331 medibank.com.au

18 November 2021

We expect to be fully aligned to the TCFD framework later this financial year when we set science-based short, medium and long-term targets. Our ongoing energy reduction efforts and progressive switch to renewables will likely see us achieve Net Zero for Scope 1 and 2 by 2025. While the timeframe for Scope 3 will be longer given the complexity of reducing emissions in our broader value chain, we will be actively seeking opportunities to expedite the process and bring forward our Net Zero goal.

FY21 was another challenging year for all Australians. However, Medibank has come through that year in good shape and is well positioned for the future.

This is in no small measure due to the efforts of our people who remain focused and committed. Medibank's purpose of Better Health for Better Lives runs deep in our organisation and on behalf of the Board and you our shareholders I want to thank everyone across the Company for showing this to be the case every day.

I also want to thank our CEO David Koczkar and the Executive Team for their leadership during a challenging year.

It would be remiss of me not to also mention Craig Drummond who retired as CEO in May and whose contribution to the Company during his tenure was very significant.

I also acknowledge and thank my Board colleagues for their continuing focus, wise counsel and support. In this regard I particularly want to mention Christine O'Reilly and Peter Hodgett who will both be retiring from the Board at the conclusion of this meeting.

Christine has shared her significant financial and operational experience with the Board over the past 7 years and Medibank has benefitted greatly from her contribution and insights throughout this time.

Peter has had a significant influence on Medibank's capital framework as well as being central to the Company's adoption of more sustainable investment practices, including oversight of our Responsible Investment Policy.

Thank you both for your contribution to Medibank from government ownership through to ASX listing and up to today.

Our search to replace Christine and Peter is well underway.

And finally, I want to thank you, our shareholders. Your continued support has allowed us to look after the health and wellbeing of millions of Australians, and we look forward to helping many more in the years ahead.

I'll now ask David to update us on the Company's strategy, direction and current performance.

Medibank Private Limited ABN 47 080 890 259 GPO Box 9999 Telephone 132 331 medibank.com.au

18 November 2021

CHIEF EXECUTIVE OFFICER

Thank you Mike and good morning everyone.

I'd like to acknowledge the Traditional Owners and Custodians of the land on which I join you from today, home of the Wurundjeri people. I pay my respects to Elders past, present and emerging and I extend my respect to all Elders on the lands on which we work and live.

This year, as COVID continued to impact our lives and place even more pressure on our health system, more and more people chose to prioritise their health and wellbeing and find greater value in private health insurance.

And we were there for them. We were able to step up and provide broader support to our customers and community during this period, because of the investments we have made over the last few years.

We brought healthcare to people in their homes and communities - through our virtual care, telehealth and in-home care programs.

We made it simpler and easier for our customers to manage their health and wellbeing and navigate the healthcare system in an informed way, personalising their experiences to make health more accessible.

We intensified our focus on preventative health, developing new support programs, inspiring people to eat, move and feel better and rewarding them for taking healthy actions through our Live Better activities and rewards program.

We collaborated with doctors and hospitals to develop new models of care built around the needs of patients, and supported the expansion of the short-stay, no gap joint replacement model to hospitals across the country.

We helped our customers through COVID with the biggest support package in our 45 year history. Our financial support sits at around $300 million, including $103 million in claims savings we recently returned to customers through premium relief, with customers receiving up to $52 for extras only policies and up to $175 for hospital and extras policies. We've also provided financial hardship support to more than 60,000 customers.

We remain committed to returning any permanent net claims savings due to COVID to our customers, and we will continue to assess the financial implications of the extended lockdowns in NSW, Victoria and the ACT.

We adapted the way we worked, prioritising the health and wellbeing of our people and empowering them to deliver better customer experiences. All the while, managing our own costs.

As a result, we saw our strongest growth in more than 10 years, with market share up 37 basis points. We increased policyholders by almost 83,000, with more customers choosing to hold onto their health insurance or take out cover for the first time.

We achieved our highest ever customer advocacy levels for both Medibank and ahm, and saw customers engage with our health programs in record numbers, and grew our Medibank Health segment profit by 12.9%.

This demonstrates that focusing on our customers' needs and being disciplined in how we run our business has allowed us to deliver strong results for you - our shareholders.

Medibank Private Limited ABN 47 080 890 259 GPO Box 9999 Telephone 132 331 medibank.com.au