Business Description:
Sonic Healthcare Limited (SHL) is an international medical diagnostics company, offering laboratory medicine/pathology and radiology services to the medical community. The company is structured as a decentralised federation of medically-led diagnostic practices, with the head office in Sydney, Australia. Services are offered in Australia, New Zealand, the United Kingdom, Germany, Switzerland, Belgium, Ireland and the USA.

Strategy Analysis:
The domestic strategy is to retain cost leadership through the reinvestment of capital into new technology. The building of new facilities delivers cost savings through leveraging new technology. The international strategy is to add bolt on acquisitions to the growing hub and spoke network within Europe and the US. These international facilities have surplus capacity so any acquisitions will enable rationalisation of processing and leverage administration cost over a larger operation. SHL is also focused on more specialist diagnostic services and is developing centres of excellence for diagnosing complex medical conditions. SHL´s use of different brands means it can address niche specialist services as well as mass processing to leverage its skill set and reduce costs. Sonic Healthcare reported NPAT up 0.4% to $294.54m for the year ended 30 June 2011. Revenues from ordinary activities were $3.1bn, up 3.4% from last year. The Company's laboratory operations in the USA and Europe have expanded further, with positive revenue and earnings growth. The performance of the Company's Australian pathology division in the second half of the year reported revenue growth of 6% with significant margin improvement. Diluted EPS was 75.5 cents compared to 75.0 cents last year. Net operating cash flow was $409.02m compared to $429.5m last year. The final dividend declared was 35 cents, taking the full year dividend to 59 cents in line with 59 cents last year. The Company reported a positive outlook with EBITDA expected to grow by 10-15% in 2012, excluding additional acquisitions (assuming 2011 currency exchange rates).