RHÖN-KLINIKUM AG Roadshow Presentation

Transcription

1 RHÖN-KLINIKUM AG Roadshow Presentation November 2016 Jens-Peter Neumann, CFO Dr. Kai G. Klinger Contact phone ,

2 Disclaimer This document has been prepared by RHÖN-KLINIKUM AG ( RHÖN-KLINIKUM or the Company ) for information purposes only, solely for use during this presentation. It must be treated confidentially by attendees at such presentation and must not be distributed, passed on or otherwise disclosed. This presentation contains forward-looking statements that reflect the management s current views with respect to certain future events and financial performance. A number of factors could cause actual results to differ materially from those projected or implied in such statements. The Company or its advisers or representatives accept no obligation to update any forward-looking statements set forth herein or to adjust them to future events or developments. Further, this presentation contains market, price and performance data which have been obtained from Company and public sources. The Company believes that such information is accurate as of the date of this presentation. The information contained in this document has not been independently verified, and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Neither the Company nor any of its respective affiliates, advisors and representatives shall have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising from any use of this document, or its contents, or otherwise arising in connection with this document. Nothing in this presentation is intended as, or constitutes, an offer or invitation to purchase or sell any RHÖN-KLINIKUM securities, and neither it nor part of it shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. This presentation is not an offer of securities for sale or any solicitation to buy or sell RHÖN-KLINIKUM securities in the United States of America. Securities may not be offered or sold in the United States of America absent registration or an exemption from registration under the US Securities Act of 1933, as amended. This presentation is intended for distribution in the United Kingdom only to: (i) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, or the Order; (ii) persons falling within Article 49(2)(a) to (d) of the Order or to those persons to whom it can otherwise be lawfully distributed, or all such persons together being referred to as relevant persons. This presentation is directed only toward relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. The information in this presentation is given in confidence, and the recipients of this presentation should not base any behaviors in relation to qualifying investments or relevant products, as defined in the Financial Services Markets Act 2000, or FSMA, and the Code of Market Conduct, made pursuant to the FSMA, which would amount to market abuse for the purposes of the FSMA on the information in this presentation until after the information has been made generally available. Nor should the recipient use the information in this presentation in any way that would constitute market abuse. This document is given in conjunction with an oral presentation and should not be taken out of context. For computational reasons, rounding differences of ± one unit (, %, etc.) may occur in the tables. Glossary: = Euro; $ = (US)Dollar; (F)Y = (financial) year(s); M = month(s); % = percentage; a = actual; acc. = according; approx. = approximately; e = expected; k = thousand(s); m = million(s); RHÖN-KLINIKUM AG 2

3 GUIDANCE FY 2016 RHÖN-KLINIKUM at a Glance Germany s first listed hospital operator The only publicly listed pure-play on the German acute-care hospital sector Focus on specialized and high-end medicine 5 locations with 5,400 beds >15,000 employees German hospital market Total hospital expenditure ~ 86bn 10Y CAGR +3.7% p.a. Ownership in German hospital market Total number of beds in the market: 499,351 2) ~ 1.5% of the total German hospital market 1) ~ 9% of the German private hospital sector 1) Group revenues 1.17bn to 1.20bn investor owned taxexempt charity 18% 34% 48% public EBITDA 155m to 165m 1) Based on number of beds of RHÖN-KLINIKUM/total beds and ø-cmi of ~1,5 per bed 2) Latest available total number of beds in the market as of 2015 (Source: Federal Bureau of Statistics Germany Grunddaten d. Krankenhäuser, Oct. 2016) RHÖN-KLINIKUM AG Highlights of the Business Model 3

4 Our Portfolio of 5 Locations in Detail Bad Berka Bad Neustadt (Saale) Frankfurt (Oder) UKGM Giessen-Marburg Revenue > 170m * Beds ~ 650 ~ 43,000 patients Revenue > 216m * Beds ~ 1,600 ~ 51,000 patients Revenue > 130m * Beds ~ 830 ~ 79,000 patients Revenue > 591m * 2 locations in Giessen and Marburg with ~ 2,290 beds ~ 480,000 patients 3 rd largest university clinic in Germany with ~ 80 divisions/institutes More than 2/3 of revenue line from growth segments: cardiovascular, oncology, pneumology, neurology, special orthopedics and psychiatrics * Revenues based on FY 2015 figures RHÖN-KLINIKUM AG Highlights of the Business Model 4

5 billion in % of GDP (2015 ) A Robust Macro Backdrop Healthcare expenditure in Europe in % of GDP Acute care healthcare expenditure in Germany Source: OECD health statistics, current expenditure on health care (Nov. 2016) Healthcare expenditure in Germany in % of GDP 11.7% 11,7% 12% 11% 10% 9% 8% 7% 11.5% 11.1% 11.1% 11.0% 10.8% 10.4% 9.8% 9.4% Current expenditure on healthcare in Germany (% of GDP) 9.1% 9.0% CAGR +3.7% 86 CAGR +3.6% Hospital revenues (core market segment for RHÖN-KLINIKUM) Outpatient accute care (additional growth opportunities) Source: Federal Bureau of Statistics Germany, Gesundheitsausgabenrechnung (2016) 11.2% 11,2% 10.7% 10,7% 10.2% 10,2% 9.7% 9,7% trend increase Source: OECD health statistics, current expenditure on health care (Nov. 2016) Germany is among the top healthcare spenders in Europe The healthcare sector on average grows faster than GDP Patient and payment structure in German hospitals: - patients insured in the statutory health insurance: ~90% - privately insured patients ~10% Resilient growth market with average rate ~3.7% p.a. RHÖN-KLINIKUM AG Highlights of the Business Model 5

6 Attractive Case Development Driven by Two Megatrends I. Changing Demographic Patterns Age structure in Germany Rising life expectancy Increase in proportion of elderly and multimorbid people - Today, 28% of the total population is older than 60 years - This share will increase to 32% in 2022 and to 37% in 2032 Increase in lifestyle diseases and chronically ill people Structural rise in demand Men Women II. Progress of Medical Technology and IT Driven Efficiency Gains New products and wider range of indications - Access to new patient groups who were regarded untreatable in the past (e.g. replacing heart valves at 80 year old patients) Innovative, more patient-friendly treatment approaches - Demand for minimal-invasive procedures or personalized medicine Network medicine and big data intelligence for next evolutionary level of diagnosis and treatment Higher severity mix, additional patient groups, increasing efficiency Source: Federal Bureau of Statistics Germany (2016) RHÖN-KLINIKUM AG Highlights of the Business Model 6

7 LONG-TERM Mid- and Long-Term Growth Prospects Strategic growth and business development ORGANIC INORGANIC NEW BUSINESS AREAS GENERAL GROWTH STRATEGY Gain additional market share with clear business profile +3% to +4% p.a. I Opportunistic and accretive acquisitions fitting our portfolio II Network medicine, medical research and technology driven innovations III Set-up of New Venture Structure for ehealth and Network Medicine Minority stakes in young start-up companies from Europe and the U.S. Partnership with experienced venture investors Scalable platform established to test products within clinics in Germany Strategic alliances with principal technology partner (IBM Watson) RHÖN-KLINIKUM AG Highlights of the Business Model 7

8 Key events of the third quarter of 2016 A slight change in the strategic investor landscape Eugen Münch increased his shareholding to 10.04% by end-august and has the option to acquire another 4.38% by August 2017 and further achievements on key projects Venture capital vehicle RHOEN-Innovations made an initial investment in Israeli start-up company Inovytec Comprehensive pilot project with cognitive computing system IBM Watson at Marburg s Center for Undiagnosed and Rare Diseases Notable milestones achieved on construction works at Bad Neustadt Campus Continued strong organic volume growth: +1.6% more DRG case-mix-points and +4.6% more inpatient and outpatient cases in first 9 months Total number of treated patients grew by +8.0% to 615,629 (incl. Kreisklinik Bad Neustadt) RHÖN-KLINIKUM AG First Nine Months Results of as of November 4,

9 Key P&L figures 9M 2016 Performance * in millions 9M 2016 vs. 9M 2015 Revenue % +6.4% Personnel exp % +7.3% Cost of materials % +4.6% EBITDA % +12.1% D & A % -1.4% EBIT % +20.5% Interest result % -89.6% Net profit % +24.9% Decent 9M performance with extraordinary impacts on EBITDA and low tax rate Organic revenue growth +3.5% Mainly from integration of Kreisklinik and renewed labor contracts with doctors and admin staff Includes 41.4m mandatory provision releases from lapsed SPA warranties Escalation of review activities by statutory health system leads to significant higher provisions and adjustments on receivables in Q3 Low tax ratio of 5.2% supportive for net profit and EPS of 1.20 * detailed and comprehensive P&L in 9M 2016 report RHÖN-KLINIKUM AG First Nine Months Results of as of November 4,

10 Update on UKGM and reimbursement UKGM with stable operating performance in 9M * Revenue growth +4.2% yoy EBITDA margin 7.8% Typical seasonality of Q3 with smaller rise in fixed costs Stronger headwinds from statutory healthcare system Intensified inspections by medical service (MDK) Focus of reviews on high and complex CMI cases Increasing need for documentation and admin * based on local GAAP (HGB), not audited or reviewed, adjusted on annualized accounting correction to previous year RHÖN-KLINIKUM AG First Nine Months Results of as of November 4,

11 Core balance sheet figures as of September 30, ,493m 1,493m 60.9% 910m Non-current assets 1,137m Equity Equity ratio 76.2% 10m cash 39.1% 326m cash 583m Current assets 28m Non-current liabilities 327m Current liabilities 1.9% 10m financial debt 21.9% Assets Equity & liabilities Net cash position 326m Equity ratio of >76% RHÖN-KLINIKUM AG First Nine Months Results of as of November 4,

12 GUIDANCE FY 2016 Outlook 2016 and main regulatory changes First impetus from 2017 pricing % as initial DRG inflator for 2017 Actual state base rates to be negotiated in Q1 In Q2-Q3 usual volume negotiations with discounts on additional volumes for each hospital General wage sum increase (initial DRG inflator) 3.0% 3,0% 2.0% 2,0% 1.0% 1,0% 0.0% 0,0% 2.8% 2.95% 2.5% 2.5% 2.0% 2.0% 1.4% 1.5% 1.2% 0.6% and update on regulation for 2017 Three-year fixed-cost discount replaces discounts on additional volumes (published latest in Q1 with base rates) Extra charge for nursing based on staff statistics ( 500m) substitutes extra charge for maintenance DRG catalogue of 2017 with negative price adjustments on material cost of intensive services (cardio or special orthopedics) Impact on portfolio still open, maybe with higher growth discount broadly neutral slightly negative Group revenues EBITDA 1.17bn to 1.20bn 155m to 165m FULLY CONFIRMED RHÖN-KLINIKUM AG First Nine Months Results of as of November 4,

13 Appendix Breakdown of Main Extraordinary Effects on FY 2016 EBITDA published in February m to 165m 2016 will still be influenced by compensatory one-off items A B C D E > -8m -3m to -5m > +35m -5m to -7m -6m to -8m lapse of contractual risk from Fresenius/Helios SPA and mandatory release of underlying reserves cost burden due to deferred settlement of UKGM s separate accounting with state of Hesse extra budget for selected innovation, research and ehealth projects First-time consolidation and integration cost of Kreisklinik Bad Neustadt Initialization of high-end outpatient and diagnostic center in Marburg financial figures in million (m) RHÖN-KLINIKUM AG Appendix 13

14 Appendix Price Regulation at a Glance Federal Level Layer 1 State Level Layer 2 Hospital Level Layer 3 Total hospital system budget Wage sum increase as main reference number for DRG inflation in 2016: +2.95% (2015: +2.53%) For 2017 wage sum inflater will be at +2.5% Sector-specific cost index +1.57% Base rates and case-mix volume for each state Negotiations between hospital association and statutory health insurance funds Effective price hike depends on regional distribution 2016 base rate for RHÖN portfolio +2.6% (weak increase in state of Bavaria only at +1.74%) Individual hospital volumes and reimbursement Negotiation of volume budgets between clinic and health insurance funds about additional volumes Volumes outside the budget reimbursed at only 35%; additional volumes inside the budget reimbursed at 75% for 3 years (e.g. ø-growth assumption of +1.5% p.a. leads over 3Y to a discount in current year of approx. -1.1%) Average base rate increase in states with RHÖN hospitals (weighted by RHÖN case mix) 3,0% 3.0% 2,0% 2.0% 1,0% 1.0% 0.0% 0,0% DRG points RHÖN effective base rate 0.6% 0.4% 1.4% Reimbursement in % of base rate 35% 75% 100% 3.4% Preceding year volume 1.5% 1.0% 0.9% 35% 75% 100% FY 2013 FY % 2.0% 0.3% 2.4% 1.3% 2.8% 35% 75% 3.4% 100% 100% FY % 1.6% Agreed additional volume Benchmark (wage sum) Extra charge for maintenance on top of base rates 2.95% 2.5% 2.6% % 35% 75% FY 2016e Excess volume RHÖN-KLINIKUM AG Appendix 14

15 Appendix Shareholder Base Shareholder Structure as of 30 September 2016, according to the most recent notifications of voting rights at that time 20.0% B. Braun 43.8% 1) 47.0% Free Float 53.0% Strategic Investors 17.6% Asklepios 3.2% Landeskrankenhilfe 10.0% 2) Eugen Münch/HCM SE 5.4% Ingeborg Münch 1) Shareholders with less than 3% of total voting rights 2) According to the notification of August 25, 2016 HCM SE has in addition the option to acquire another 4.38% of the voting rights (2,930,000 voting rights) under a forward purchase agreement within the next twelve months RHÖN-KLINIKUM AG Appendix 15

16 Appendix Financial Calendar 2017 February 24, 2017 Preliminary results for financial year 2016 April 7, 2017 Press conference: publication of annual financial report 2016 May 5, 2017 Publication of interim report for the quarter ending March 31, 2017 June 7, 2017 Annual General Meeting (Jahrhunderthalle Frankfurt) August 3, 2017 Publication of the half-year financial report as of June 30, 2017 November 10, 2017 Publication of interim report for the quarter ending Sept 30, 2017 All dates could be subject to modification Contact Dr. Kai Gregor Klinger, SVP, Investor Relations, Corporate Finance, M&A phone , RHÖN-KLINIKUM AG Appendix 16