Medicover Interim report July-September 2022
STOCKHOLM, Nov. 3, 2022 /PRNewswire/ --
- Revenue amounted to €368.6m (€335.0m), an increase of 10.0% with an organic growth of 2.9%.
- Operating profit (EBIT) was €9.1m (€30.0m), representing an operating margin of 2.5% (9.0%).
- Net profit/(loss) amounted to €-3.4m (€18.4m), which represents a margin of -0.9% (5.5%).
- EBITDA was €48.8m (€58.0m), a decrease by 15.8%. EBITDA margin was 13.3% (17.3%).
- EBITDAaL amounted to €26.9m (€42.8m), corresponding to an EBITDAaL margin of 7.3% (12.8%).
- Net cash flow from operating activities was €54.5m (€67.0m).
- Basic/diluted earnings/(loss) per share were €-0.024 (€0.123).
- Revenue amounted to €1,112.5m (€1,001.1m), an increase of 11.1% with an organic growth of 3.6%.
- Operating profit (EBIT) was €46.8m (€117.8m), representing an operating margin of 4.2% (11.8%).
- Net profit amounted to €11.8m (€78.2m), which represents a margin of 1.1% (7.8%).
- EBITDA was €164.4m (€195.3m), a decrease by 15.8%. EBITDA margin was 14.8% (19.5%).
- EBITDAaL amounted to €101.3m (€153.9m), corresponding to an EBITDAaL margin of 9.1% (15.4%).
- Net cash flow from operating activities was €128.1m (€162.8m).
- Basic/diluted earnings per share were €0.069 (€0.501).
REVENUE AND EARNINGS
€ millions (€m)
Operating profit (EBIT)
Operating profit margin
Net profit/(loss) margin
Basic/diluted earnings/(loss) per share, €
Adjusted EBITDA margin
Adjusted EBITDAaL margin
Definition and reconciliation of alternative performance measures are available at www.medicover.com/financial-information. * LTM: last twelve months (1 October 2021-30 September 2022)
Continued strong growth in business as usual despite multiple headwinds, as reported in the second quarter, which have continued into the third quarter. Furthermore, we experienced the highest inflation rates for many years in several of our core markets which impact profitability. Inflation in Poland reached 17% (highest in 26 years), Romania just short of 16% and Germany over 10% in September. Inflation is experienced in all economic sectors and is evident in strong wage growth.
Despite the headwinds we manage to deliver revenue growth of 10.0% and organic revenue growth in business as usual (excl. Covid-19 and Ukraine) was a strong 19.8%. As I expressed in the prior quarterly report, we remain confident in our ability to compensate inflationary cost pressure through price increases in our private pay markets. Price adjustments will be more challenging in Germany where the large majority of revenue is decided by public reimbursement..
Revenue for the quarter grew 10.0% to €368.6m (€335.0m), with an organic growth of 2.9%. Fee-For-Service and other services (FFS) represented 58% of total revenue.
EBITDA was €48.8m (€58.0m), decreased by 15.8%, representing an EBITDA margin of 13.3% (17.3%). Adjusted EBITDA amounted to €52.8m (€60.7m), with a margin of 14.4% (18.1%). Several headwind factors negatively impacted margins during the quarter. As commented on in more detail in the profit development sections, adjusting for the main headwind elements and considering the significant inflation pressure, it is encouraging to see the like for like margin evolution holding steady in Healthcare Services with the bulk of the price adjustment impact for Healthcare Services still to come over the coming quarter.
Healthcare Services revenue reached €230.5m (€176.7m), grew by 30.5%, with an organic growth of 18.3%. Organic growth in business as usual (excluding Covid-19) was an impressive 25.8%, of which price represented 7.7%. The number of members in the Integrated Healthcare Model increased by a healthy 12.6% to 1.6 million (1.5 million) members, with 41,000 new members during the quarter, illustrating the ongoing strong demand. FFS grew 33.3% in the quarter and represented 54% of divisional revenue.
Healthcare Services EBITDA was €32.3m (€26.4m), increased by 22.2%, representing an EBITDA margin of 14.0% (15.0%). New units, pre-opening costs, acquisitions and cost inflation impacted the profit level. Covid-19 services contributed to the margin in the comparative quarter.
Diagnostic Services revenue amounted to €142.7m (€162.9m), decreased by 12.5%, with a negative organic growth of 13.9%. Organic growth in business as usual (excluding Covid-19 and Ukraine) was 9.0%, where price represented 2.6%. The quarter was impacted by Ukraine and a sharp reduction in Covid-19 testing. The number of laboratory tests amounted to 29.0 million (32.4 million), a decrease of 10.6%. The number of blood-drawing points (BDPs) amounted to 919 (809). FFS decreased by 18.9% in the quarter and represented 67% of divisional revenue. We see a challenging market in Germany, as we don't expect price adjustment from the public reimbursement system to fully compensate for cost increases. We will continuously drive operational improvements to compensate for such increases.
Diagnostic Services EBITDA amounted to €22.6m (€35.7m), a decrease of 36.7%, an EBITDA margin of 15.9% (21.9%). Ukraine, a reduction in Covid-19 testing, increased labour costs and other inflationary costs continue to have a negative impact and reduce margins.
We will most likely continue to see high inflation in the coming quarters. We constantly work to increase operational efficiency combined with price adjustments to compensate for increased costs. In the integrated healthcare model a larger proportion of contracts will be price indexed as of October. We have continued to see market acceptance for price compensation in the quarter.
Expansion has continued, for example, one new hospital opened in India during the quarter, and dental services entered the German market with the acquisition of two dental chains in early October, alongside a continued ambitious organic growth expansion.
We remain confident that we will be within the financial adjusted EBITDA margin target of 15.5-16.5% for 2022, despite the headwinds from an unusual high number of uncertain factors faced this year. As mentioned, we are relentlessly working on the aspects within our control, as we increase pricing, operational efficiency and drive expansion to maturity, which constitutes a strong base for further growth in 2023.
Last but not least a big thank you to all employees that continue to care for everyone's health and provide the best high-quality and patient centric care for everyone's need.
For complete report, see attached pdf.
This is information that Medicover AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication through the agency of the contact person set out below at 7.45 (CET) on 3 November 2022. This interim report and other information about Medicover is available at medicover.com.
Year-end report January-December 2022 17 February 2023
Capital Markets Day 17 February 2023
Annual report week 13 2023
Interim report January-March 27 April 2023
Annual general meeting 27 April 2023
Interim report April-June 26 July 2023
Interim report July-September 3 November 2023
For further information, please contact:
Hanna Bjellquist, Head of Investor Relations
Phone: +46 70 303 32 72
Medicover is a leading international healthcare and diagnostic services company and was founded in 1995. Medicover operates a large number of ambulatory clinics, hospitals, specialty-care facilities,laboratories and blood-drawing points and the largest markets are Poland and Germany. In 2021, Medicover had revenue of EUR 1,377 million and more than 38,000 employees. For more information, go to www.medicover.com
The following files are available for download:
Interim report_Q3 2022_Final
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