Near-term Negative Jaws - Blood in the Water

Research evidence excerpt

Near-term Negative Jaws - Blood in the Water

two reasons. 1) The 2024-25 PREV 0.02 0.00

Australian Federal Budget stated that over 3 years from start FY26E the government would

a) save A$356.3m through amending reimbursement for urine examinations and Vitamin B12

testing; partly offset by b) provision of A$174.1m to introduce indexation for some pathology Figure 1 - Australia: GP Bulk Billing rate, by

volume (%)

tests. This leads to a net annual funding decrease of cA$90m. Indeed, to end 3QFY26E, 95%

we estimate industry benefits declined A$70.2m from these measures. And 2) Ongoing low 90%85% 80.0%

growth/declines in patients seeing GPs, which impacts downstream clinical lab ordering. 80%75%

70%

1QFY10 3QFY10 1QFY10 3QFY11 1QFY12 3QFY12 1QFY13 3QFY13 1QFY14 3QFY14 1QFY15 3QFY15 1QFY16 3QFY16 1QFY17 3QFY17 1QFY18 3QFY18 1QFY19 3QFY19 1QFY20 3QFY20 1QFY21 3QFY21 1QFY22 3QFY22 1QFY23 3QFY23 1QFY24 3QFY24 1QFY25 3QFY25 1QFY26HLS's elevated cost base in pathology is being addressed. HLS is targeting growth in both .

Source: Aust. Govt. DoHA

genomic pathology and B2B markets as well as aiming to increase productivity.

Figure 2 - Australian Medicare Benefits -

FWC decision on gender-based undervaluation - negative impact of A$1.8m in FY26E. In its benefits paid for Urine/B12, by month

Gender-based Undervaluation Review, the Fair Work Commission determined that pathology 100 (A$m) (FY26YTD decline of cA$70m seen on pcp)

collectors have been subject to pay undervaluation based on gender. We understand that final 50

negotiations regarding the size of pay rises is progressing for FY27E. We assume a A$(10)m 0

annual EBIT impact for HLS from all reviews/pay rises in FY27E+. Urine - Item No. 69333 Vit.B12 - Item No. 66838

. Vit.B12 - Item No. 66839 Vit.B12 - Item No. 66842