Interim report January March 2018

Transcription

1 Interim report January March 2018 Click Telephone to edit conference Master title style May 3, 2018 Thomas Berglund CEO Olof Bengtsson CFO

2 Solid start considering calendar effects and a temporary severe flu impact in Germany HIGHLIGHTS Capio France continued the positive result development Result improvement despite -1 working day and 4 extra days of school holidays H staff and cost reduction program generated expected results Performance of the big five hospitals improved Lower price reduction 2018 political signals of a continued ease of price pressure Capio Nordic continued the strong development from 2017 Result improvement despite Easter effect Strong growth of emergency volumes An overall positive listing trend in primary care, now also in the Stockholm centers Capio Go continued the fast expansion of consultations online Going rate from 30,000 to 40,000 visits/year in three months Reimbursement to start in May 2018, SEK 570/visit Capio Germany impacted by the severe flu season Productivity improvements delayed corrective actions now being implemented during Q

3 Group financial development Capio Group JAN - MAR FULL YEAR , % RTM 2017 Net sales 4,156 3, ,569 15,327 Organic sales growth, % EBITDA ,103 1,114 Margin, % EBITA Margin, % Profit for the period EPS after dilution, SEK Net capital expenditures In % of net sales Net debt 3,745 3,255 3,745 3,691 Financial leverage Comparability impacted by timing of Easter. Nordic and Germany -2 working days and France -1 day and 4 extra days of school holidays Profit for the period was in addition impacted by some restructuring costs related to the French property projects (MSEK -7)

4 Result improvement continued Capio France JAN - MAR FULL YEAR , % RTM 2017 Net sales 1,512 1, ,513 5,435 Organic sales growth, % EBITDA Margin, % EBITA Margin, % Net capital expenditures In % of net sales Despite -1 working day; a 3.2% increase of patient visits with 2.3% fewer FTEs than at year-end in line with the staff and cost reduction program from last year. Performance of the big five hospitals improved Price reduction of 1.2% (from March 1) better than expected, full impact from Q2. Retrospective reimbursement from the government ~MSEK +10 in Q1 related to Impression of a continued ease of the price pressure

5 New French organization increases speed of change Step-by-step transition from a geographical to a specialized organization to attract new doctors and patients driving top-line growth Five largest hospitals > 50% of French net sales in one organization, led by the country president. Performance improved during Q Smaller hospitals will focus on fewer specialties to drive quality, productivity and volume Construction of two new, purpose built hospitals to open in Q Supporting specialization and implementtation of Modern Medicine and Rapid Recovery

6 Effects from specialization in France Hip and knee prosthesis surgery in Capio France Number of in- and outpatients % 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, , , , , Discharged, % <= 4 days 5, , , Number of procedures 7, , RTM Specialization drives excellence and increases productivity AVLOS continued to decrease; 60% discharged < 4 days (vs. 55% in RTM March 2017) Significant growth in the number of procedures performed in day surgery; 9.4% of total procedures in 2018 RTM (vs. 7.5% in RTM March 2017) Provided in daycare: Number The Rapid Recovery strategy continues to deliver productivity and patient growth

7 Building for the future new hospitals will support growth Toulouse region Capio La Croix du Sud Lyon region Médipôle Lyon-Villeurbanne Merger of two Capio hospitals into one Relocation/transfer of activities in October 2018 Joint project with Mutualité Française Merger of two Capio hospitals into one Relocation/transfer of activities during Christmas/New Year period 2018 In 2010, Capio decided on an investment plan to accelerate the development and implementation of Modern Medicine Last two major projects completed in H Designed to support efficient patient flows and new working methods (Modern Medicine and Rapid Recovery) Focus on core specialties. Replacing old and inadequate facilities Increase capacity and specialization in Toulouse and Lyon Will attract more doctors and patients, supporting future sales and result growth

8 Building for the future new hospitals will support growth Operational and financial effects from the new hospitals Increasing specialization and day surgery activity. Higher attractiveness for doctors volume growth. More efficient use of resources Medical equipment and furniture capex estimated at ~MSEK Main part in Q3 and Q4 Divestment proceeds from vacated properties estimated at ~MSEK Expected in Q4 Restructuring costs estimated to MSEK 55, of which MSEK 7 in Q Main part in Q3 and Q4 Other financial items expected to be impacted by MSEK -36 termination of financial lease agreement and divestment of property based on the current valuation. Main part in Q4 The new hospitals are under operating lease agreements

9 Nordic continued the strong development Capio Nordic JAN - MAR FULL YEAR , % RTM 2017 Net sales 2,309 2, ,851 8,695 Organic sales growth, % EBITDA Margin, % EBITA Margin, % Net capital expenditures In % of net sales Organic sales growth mainly from the primary and emergency care operations in Stockholm. Total sales growth impacted by acquisitions Solid result improvement in several business areas

10 Fast digital expansion in Sweden Number of consultations online Consultations week Digital when possible, physical when needed. Going rate increased from 30,000 visits/year to 40,000 visits/year in three months Capio Go now to be reimbursed for digital visits on a national basis in line with SKL 1 recommendations SEK 570 fee per visit after deductions for administrative fees Currently 650,000 of Capio s 800,000 listed primary care patients have access 1 Swedish Association of Local Authorities and Regions Impact from start-up of Capio Go of MSEK -7 Now being reimbursed, increases capacity to further promote Capio s digital patient services Roll-out to remaining listed Capio patients to be completed in Q2 Introduction of Capio Go in Norway late

11 Tendered contracts in Sweden current and potential Capio Sweden s current contract portfolio has the following maturity structure (net sales, MSEK) 1 : , Rounded to even fifties and incl. extension options. 2 Incl. Capio Geriatrics Dalen and Capio Maria with combined net sales of MSEK Mainly Capio S:t Göran with final maturity in 2026 (incl. max. extension option). Capio s dependency on contracts has decreased over time in favor of free healthcare choice. In volume of MSEK 750 for retender The market potential for new contracts in Sweden over the next 5 years is estimated to MSEK 1,250 (Source: Capio market studies). Submitted bids/ongoing tenders: MSEK : MSEK 900 In addition Geriatric free healthcare choice in Stockholm. Current cost for the county ~MSEK 2,000 Limited Capio volumes up for retender in the next five years. MSEK 1,250 in new possible tender wins. In addition access to new free healthcare choice in geriatrics

12 Actions delayed due to severe flu season Capio Germany JAN - MAR FULL YEAR , % RTM 2017 Net sales ,205 1,197 Organic sales growth, % EBITDA Margin, % EBITA Margin, % Net capital expenditures In % of net sales Net sales impacted by seasonal effects (-2 working days) and lower price on vein surgery (MSEK -5). The flu season was severe this year and the estimated net sales impact was MSEK -20 (lower volumes due to temporary closure of care units and cancellations from patients sick with flu) The result impact of the flu is estimated to MSEK -15. Actions to correct the negative result development during H2 2017, including shorter AVLOS and productivity improvements, were delayed from Q1 to Q

13 Most widespread flu in Germany for ten years 2018 development of flu season w. 52 w. 4 w. 8 w. 12 Strong increase Clearly higher Moderately increased Slightly increased Normal Inpatient volumes impacted negatively as some emergency and ICU wards had to close down temporarily due to staff shortages. Specialist business impacted by late cancellations. Total net sales impact estimated to ~MSEK -20 High sick leave, paid overtime among existing staff and an increased use of rental staff impacted both productivity and staff costs. Staff cost impact estimated to ~MSEK -15 Back to normal levels in April. Corrective actions planned to be implemented during Q1 will now start during Q2 Source:

14 Modern Medicine strategy shortens AVLOS Q1 impacted by significantly higher case mix JAN - MAR FULL YEAR AVLOS by segment, Days 2018 % 2017 RTM 2017 % 2016 % 2015 % 2014 % Capio Nordic Capio Nordic excl. geriatrics Capio France Capio France excl. geriatrics Capio Germany Capio Germany excl. geriatrics Capio Group Capio Group excl. geriatrics The average length of stay (AVLOS) reduction for the Group was -0.7% and -1.3% excluding geriatrics. The geriatric operations are growing in all segments Considering case mix changes, the AVLOS development was close to the historical downward trend

15 Cash flow JAN - MAR FULL YEAR Capio Group RTM 2017 Net debt opening -3,691-2,872-3,255-2,872 EBITA Capital expenditure Divestments of fixed assets Net capital expenditure In % of net sales Add-back depreciation Net investments Change in working capital Operating cash flow Cash conversion, % Free cash flow after financial items and tax Cash conversion, % Net capex RTM impacted by timing of maintenance capex and some expansion projects in France and Germany supporting sales growth Working capital impacted by change of tariffs in France and timing effects Income tax payments mainly related to acquisitions made and Germany and France Cash flow impacted by timing effects

16 Capital employed and financing Capio Group 31 Mar 31 Dec 31 Mar Operating capital employed 1,996 1,779 1,594 In % of net sales Other capital employed 7,786 7,668 7,285 Capital employed 9,782 9,447 8,879 Return on capital employed, % Net debt 3,745 3,691 3,255 Financial leverage Equity 6,037 5,756 5,624 Financing 9,782 9,447 8,879 Net debt and financial leverage OCE increase vs. year-end mainly due to an increase of net customer receivables (higher activity and effects from tariff update in France, MSEK 80 of less advances vs. 2017) and changes in exchange rates Other capital employed mainly impacted by changes in exchange rates Financial leverage impacted by FX and acquisitions

17 Financial targets Net sales and sales growth (Quarterly development RTM) MSEK % 16, EBITDA and margin (Quarterly development RTM) MSEK % 1,200 9 Net capex and in % of sales (Quarterly development RTM) MSEK % , , , , , , ,000 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q Net sales Organic sales growth, % Total sales growth, % EBITDA Margin, % Net capital expenditure In % of sales Organic sales growth in line with market growth in Nordic and France Acquisitions contributing to total sales growth Negative operational leverage given calendar effects and the development in Germany Net capex RTM at 3.4% was slightly above target impacted by phasing of projects in France and Germany

18 Calendar effects going forward Q2 will be impacted by the timing of Easter; +2 working days in Nordic and Germany. France -3 working days, impacted by timing of national holidays Q3 +2 working days in France Q4-1 working day in Nordic and Germany. -2 days in France

19 Financial calendar APRIL 2018 Mon Tue Wed Thu Fri Sat Sun 1 MAY 2018 Mon Tue Wed Thu Fri Sat Sun JUNE 2018 Mon Tue Wed Thu Fri Sat Sun Annual General Meeting 2018 on May 3, 2018 at 15:00 CET (Chalmers Kårhus, Gothenburg, Sweden) Next financial report: July 20, 2018: Interim report January June

20 Q&A Gothenburg May 3,