WEB CAST PRESENTATION

Transcription

1 WEB CAST PRESENTATION interim report Fredrik Rågmark, CEO & Joe Ryan, CFO Stockholm 27 July,

2 DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS This presentation may contain certain forward-looking statements and opinions. Forward-looking statements are statements that do not relate to historical facts and events and such statements and opinions pertaining to the future that, by example, contain wording such as believes, estimates, anticipates, expects, assumes, forecasts, intends, could, will, should, would, according to estimates, is of the opinion, may, plans, potential, predicts, projects, to the knowledge of or similar expressions, which are intended to identify a statement as forward-looking. This applies, in particular, to statements and opinions in this presentation concerning the future financial returns, plans and expectations with respect to the business and management of Medicover, future growth and profitability and general economic and regulatory environment and other matters affecting Medicover. Forward-looking statements are based on current estimates and assumptions made according to the best of Medicover s knowledge. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause the actual results, including Medicover s cash flow, financial condition and results of operations, to differ materially from the results, or fail to meet expectations expressly or implicitly assumed or described in those statements or to turn out to be less favourable than the results expressly or implicitly assumed or described in those statements. Accordingly, prospective investors and other third parties should not place undue reliance on the forward-looking statements herein. Medicover can give no assurance regarding the future accuracy of the opinions set forth herein or as to the actual occurrence of any predicted developments. In light of the risks, uncertainties and assumptions associated with forward-looking statements, it is possible that the future events mentioned in this presentation may not occur. Moreover, the forward-looking estimates and forecasts derived from third-party studies referred to in the presentation may prove to be inaccurate. Actual results, performance or events may differ materially from those in such statements due to, without limitation, changes in general economic conditions, in particular economic conditions in the markets on which Medicover operates, changes affecting interest rate levels, changes affecting currency exchange rates, changes in competition levels, changes in laws and regulations, and occurrence of accidents or environmental damages. The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice. 2

3 Strong top line growth in confirms Medicover s unique position Revenue up 13.8% to 161.1m and organic revenue growth amounted to 13.7% Adjusted EBITDA excl. greenfield India Fertility business grew by 7.2% A strong member growth continues to support a solid performance for Healthcare Services Diagnostic Services strong growth in major markets, in particular Ukraine and Romania Our mid-term EBITDA growth target remains intact. However, in EBITDA growth is estimated to be in the range of 8-12%, due to reimbursement changes in Germany 3

4 Strong top line growth for both divisions All major markets grew well driven by member growth and improved test volume. Organic growth was 13.7% Our Fee-For-Service offering gains track with growth over 20% vs prior year quarter Our public contracts for the hospital in Warsaw have been extended and tenders have been submitted. All in all, no significant impact FY Pressure on margins in Germany, which is being addressed, due to adjustments in the public reimbursement system Adjusted EBITDA grew by 2.2%% to 14.1m, a margin of 8.8% (9.7%) in Adjusted EBITDA excluding losses relating to fertility business in India grew by 7.2% to 14.8m, a margin of 9.2% (9.7%) in Quarterly revenue development, m 13.7% - - Q3 - Q3 Q4 - Q4 Adjusted EBITDA quarterly development, m 2.2% - - Q3 - Q3 Q4 - Q4 4

5 Healthcare Services strong member growth of 17% Revenue 81.2m, strong growth of 15.5% (organic 13.3%). Main driver is employer funded business and Fee-For-Service Members grew by 16.8% to a total of 1,126K members, generating predictable revenue and earnings streams EBITDA was 6.8m, implying an EBITDA margin of 8.4%. Adjusted for Medicover Fertility in India EBITDA margin was 9.3% We have under the period increased investments in facilities to manage the very strong growth and to ensure client satisfaction m Revenue and EBITDA margin development, m Excl. Medicover Fertility in India EBITDA margin was to 9.3% 14.0% 12.0% 10.0% 8.0% 6.0% The reimbursement changes in Poland have held back profitability because of uncertainties however we do not foresee any significant financial impact in FY or onwards % 2.0% Acquired OK System in June for a price of approx. 8.0m. The employee benefit sports/fitness card market is growing dynamically and complements our current business. Revenue for OK System was 9.0m in 0.0 Q3 Q4 Revenue Q3 Q4 EBITDA margin Q3 Q4 0.0% 5

6 Diagnostic Services all major markets grew well Revenue 82.6m, implying solid growth of 11.9% (organic 13.9%) Laboratory test volume increased 4.2% to 32.5m, held back with public reimbursement in Germany. Mix favourable to private pay supporting revenue EBITDA grew 2.0% to 10.3m with an EBITDA margin of 12.5% Revenue and EBITDA margin development 18.0% 16.0% 14.0% 12.0% A total of 24 new blood drawing points were opened in and we are currently running a total of 548 locations Reimbursement revisions in Germany in has had a negative impact on referrals of tests. This together with a price cut of 2.6% has impacted gross margin and volume in the quarter Around 15% of Diagnostic Services revenue subject to these revisions Q3 Q4 Revenue Q3 Q4 EBITDA margin Q3 Q4 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Medicover Clinics in Germany improved growth and profitability and new doctors have been added to the network of clinics 6

7 Medicover continues to expand in India Maxcure Medicover has further increased its position in and now holds an effective 45.1% ownership. MaxCure currently operates 10 hospitals in the Telangana and Andra Pradesh area MaxCure s revenue for was 14.0m, with underlying growth of 19.8% We see good market growth and continued potential to expand Fertility The fertility business in India reported as expected an operating loss of 0.8m in the quarter. Currently a total of 12 clinics are up and running of which 3 were added in Aim to have 20 clinics by year end. Expected loss for full year remains at 4m 7

8 Financial overview

9 Key financial data m Apr-Jun Apr-Jun Growth Jan-Jun Jan-Jun Growth FY Revenue % % Operating profit % % 28.8 Operating profit margin, % 4.0% 4.0% 4.5% 4.4% 5.0% Net profit % % 20.2 Net profit margin, % 4.3% 1.6% 5.1% 2.4% 3.5% Earnings per share, % % Diluted earnings per share, % % EBITDA % % 55.0 EBITDA margin, % 8.4% 8.6% 8.8% 9.0% 9.5% Adjusted EBITDA % % 57.7 Adjusted EBITDA margin, % 8.8% 9.7% 9.2% 9.7% 9.9% EBITA % % 31.4 EBITA margin, % 4.3% 4.4% 4.8% 4.8% 5.4% Healthcare Services, m Apr-Jun Apr-Jun Growth Jan-Jun Jan-Jun Growth FY Revenue % % Operating profit % % 13.2 Operating profit margin, % 3.6% 5.0% 2.7% 3.6% 4.6% EBITDA % % 26.9 EBITDA margin, % 8.4% 9.8% 7.4% 8.5% 9.4% Members (period end) (000's) 1, % 1, % 1,024 Diagnostic Services, m Apr-Jun Apr-Jun Growth Jan-Jun Jan-Jun Growth FY Revenue % % Operating profit % % 29.1 Operating profit margin, % 8.6% 9.6% 10.2% 10.4% 9.6% EBITDA % % 41.4 EBITDA margin, % 12.5% 13.7% 14.0% 14.5% 13.6% Lab tests (period volume) (m) % %

10 Financials Effective tax rate estimated around 29% for the year, excluding impact of other income related to options which is not taxable. Agreement signed to acquire 80% of the Romanian healthcare services provider Spitalul Pelican for a total of 23.0m. Waiting for anti-trust approval but expect to consolidate in September/October. OK System acquired in June. Additional small clinic acquisition in Romania just signed, expected to close September The Fertility business in the UK was sold with a loss of 1.8m. The entity has been loss making and in the loss amounted to 0.3m ( 0.1m) Other income/costs of 3.2m includes 1.5m gain on sale of development of surplus land in Warsaw & revaluation of options over Maxcure shares. As the underlying business does well the value of the options increases. Interest cost increases on release of discounting of financial liabilities, interest on bank debt around 0.5m Operating cash flow before working capital/tax strong at 15.8m ( 12.3m). Working capital increase, tax amounts paid higher on provisional amounts paid IFRS equity 313.2m ( 304.0m YE ), increase reflecting profit for the period Net debt amounts to 39.1m ( 11.8m YE ) 10

11 Investing for growth Since IPO closed seven transactions in Poland, Romania and Germany within dental, genetics, clinics and sports employee benefit business for total of 18.1m Two main investments in India. The investment in fertility totals 9.3m and MaxCure totals 29.1m cash paid, totalling for both 38.4m Investments in growth capex such as new clinics, new blood drawing points, pharmacies etc for H1 totals 11.8m, and since the IPO 26.0m 11

12 Solid organic growth in Growth Annual organic revenue growth of 9 12% 13.7% 6M 14.0% Profit Annual organic EBITDA growth of 18 20% 6.5% 1 6M 13.0% 1 Capital Structure Interest-bearing Net Debt/EBITDA does not exceed 3.5x 0.7x 1 Excl IVF India and IPO costs 12

13 Q&A