Interim report April–June 2023
Second quarter
- Revenue amounted to €424.7m (€362.2m), an increase of 17.2% with an organic growth of 12.9%.
- Operating profit (EBIT) was €13.2m (€15.0m), representing an operating margin of 3.1% (4.2%).
- Net profit amounted to €7.2m (€2.8m), which represents a margin of 1.7% (0.8%).
- EBITDA was €58.3m (€52.8m), an increase by 10.2%. EBITDA margin was 13.7% (14.6%).
- EBITDAaL amounted to €33.9m (€31.3m), corresponding to an EBITDAaL margin of 8.0% (8.7%).
- Net cash flow from operating activities was €43.6m (€27.8m).
- Basic/diluted earnings per share were €0.037 (€0.010).
First half
- Revenue amounted to €844.0m (€743.9m), an increase of 13.5% with an organic growth of 8.7%.
- Operating profit (EBIT) was €23.9m (€37.2m), representing an operating margin of 2.8% (5.0%).
- Net profit amounted to €9.3m (€14.8m), which represents a margin of 1.1% (2.0%).
- EBITDA was €112.6m (€115.1m), a decrease by 2.3%. EBITDA margin was 13.3% (15.5%).
- EBITDAaL amounted to €64.5m (€73.9m), corresponding to an EBITDAaL margin of 7.6% (9.9%).
- Net cash flow from operating activities was €105.0m (€73.6m).
- Basic/diluted earnings per share were €0.047 (€0.090).
REVENUE AND EARNINGS
| € millions (€m) | Q2 2023 |
Q2 20221) |
Variance | 6M 2023 |
6M 20221) |
Variance | LTM2) | FY 20221) |
| Revenue | 424.7 | 362.2 | 17% | 844.0 | 743.9 | 13% | 1,610.3 | 1,510.2 |
| Operating profit (EBIT) | 13.2 | 15.0 | -13% | 23.9 | 37.2 | -36% | 41.9 | 55.2 |
| Operating profit margin | 3.1% | 4.2% | 2.8% | 5.0% | 2.6% | 3.7% | ||
| Net profit | 7.2 | 2.8 | 154% | 9.3 | 14.8 | -37% | 8.2 | 13.7 |
| Net profit margin | 1.7% | 0.8% | 1.1% | 2.0% | 0.5% | 0.9% | ||
| Basic/diluted earnings per share, € | 0.037 | 0.010 | 270% | 0.047 | 0.090 | -48% | 0.036 | 0.079 |
| EBITDA | 58.3 | 52.8 | 10% | 112.6 | 115.1 | -2% | 214.6 | 217.1 |
| EBITDA margin | 13.7% | 14.6% | 13.3% | 15.5% | 13.3% | 14.4% | ||
| Adjusted EBITDA | 61.1 | 56.0 | 9% | 118.5 | 123.2 | -4% | 229.2 | 233.9 |
| Adjusted EBITDA margin | 14.4% | 15.5% | 14.0% | 16.6% | 14.2% | 15.5% | ||
| EBITDAaL | 33.9 | 31.3 | 8% | 64.5 | 73.9 | -13% | 121.5 | 130.9 |
| EBITDAaL margin | 8.0% | 8.7% | 7.6% | 9.9% | 7.5% | 8.7% | ||
| Adjusted EBITDAaL | 36.7 | 34.5 | 6% | 70.4 | 82.0 | -14% | 136.1 | 147.7 |
| Adjusted EBITDAaL margin | 8.6% | 9.6% | 8.3% | 11.0% | 8.4% | 9.8% | ||
| EBITA | 18.6 | 19.6 | -6% | 34.6 | 51.3 | -33% | 64.2 | 80.9 |
| EBITA margin | 4.4% | 5.4% | 4.1% | 6.9% | 4.0% | 5.4% |
Definition and reconciliation of alternative performance measures are available at www.medicover.com/financial-information.
1) 2022 is restated for IFRS 17 Insurance contracts. For further information, refer to note 1.
2) LTM: last twelve months (1 July 2022-30 June 2023)
CEO Statement
We have delivered strong organic growth in the quarter despite high market uncertainty globally. Healthcare Services delivered robust organic growth and improved margins although still with many immature units in the portfolio and Diagnostic Services replaces most of the Covid-19 revenue, with healthy underlying growth rates.
In June we inaugurated a new 200 bed state-of-the-art hospital in Bucharest, the first new multispecialty hospital to open in decades in Bucharest.
As previously communicated, we have slowed down the investment pace moving in line with historic levels, although we have made a few minor acquisitions and opened a few greenfield locations in the dental field in Poland and Germany and plan to open three additional greenfield hospitals in India in the second half of the year, including a new 100-bed women and child hospital in Hyderabad.
Our colleagues in Ukraine continue to deliver impressive performance under extraordinary circumstances, with now the war in its 17th month.
Revenue for the quarter grew by 17.2% to €424.7m (€362.2m), with an organic growth of 12.9%. The comparative quarter last year had Covid-19 related revenue of €28m with less than €1m this quarter, so adjusting for Covid-19 related revenue, revenue growth was an impressive 26.8%. Organic growth excluding Covid-19 related revenue was 22.0%, with price representing approximately 9.8pp of this growth. Annualised, we have added €358m of new revenue over the past 12 months, mostly organic, illustrating our strong growth momentum even in difficult trading conditions.
EBITDA was €58.3m (€52.8m), an increase by 10.2%, representing an EBITDA margin of 13.7% (14.6%). Adjusted EBITDA was €61.1m (€56.0m), a margin of 14.4% (15.5%). Adjusting for the Covid-19 related revenue and earnings, EBITDA margin strengthened 120 basis points to 13.7%.
Fee-For-Service and other services (FFS) increased by 14.8% in the quarter, now representing 58% of total revenue.
Healthcare Services revenue grew by 33.3% to €292.5m (€219.5m), with a strong organic growth of 22.1%. Members grew to 1.7 million with 20 thousand new members over the quarter. FFS increased by 28.4% in the quarter, now representing 53% of divisional revenue. We have seen good performance and demand levels across the division.
EBITDA grew by 51.7% to €44.8m (€29.5m), an EBITDA margin of 15.3% (13.5%), illustrating impact from price growth, gradually maturing younger units and volume leverage.
Diagnostic Services revenue amounted to €138.1m (€147.4m), a decrease by 6.3%, with a negative organic growth of 0.4%. 29.1 million tests were performed in the quarter (29.0 million). FFS decreased by 1.3% in the quarter, now representing 70% of divisional revenue.
EBITDA amounted to €20.3m (€28.9m), a decrease of 29.8%, an EBITDA margin of 14.7% (19.6%). The margin is dampened by increased labour costs and inflationary costs. FFS prices outside Germany have been adjusted, however there is still no price adjustments on the horizon in Germany.
All in all, I’m very satisfied with the quarter and optimistic about the future despite a difficult macroeconomic environment. We expect to see continued improved performance through the second half of the year and into 2024.
Fredrik Rågmark
CEO
This report has not been subject to review by the Company’s auditor.
For full report, see attached pdf.
This is information that Medicover AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication through the agency of the contact person set out below at 7.45 (CEST) on 26 July 2023. This interim report and other information about Medicover is available at medicover.com.
Financial calendar
Interim report July-September 3 November 2023, 7.45 CET
Interim report Year-end 9 February 2024, 7.45 CET
Interim report January-March 26 April 2024, 7.45 CEST
Interim report April-June 25 July 2024, 7.45 CEST
Interim report July-September 30 October 2024, 7.45 CET
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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, Germany, Romania and India. In 2022, Medicover had revenue of €1,510 million and more than 44,000 employees. For more information, go to www.medicover.com