Interim report January–March 2023
- Revenue amounted to €419.3m (€381.7m), an increase of 9.9% with an organic growth of 4.6%.
- Operating profit (EBIT) was €10.7m (€22.2m), representing an operating margin of 2.6% (5.8%).
- Net profit amounted to €2.1m (€12.0m), which represents a margin of 0.5% (3.1%).
- EBITDA was €54.3m (€62.3m), a decrease by 12.8%. EBITDA margin was 12.9% (16.3%).
- EBITDAaL amounted to €30.6m (€42.6m), corresponding to an EBITDAaL margin of 7.3% (11.1%).
- Net cash flow from operating activities was €61.4m (€45.8m).
- Basic/diluted earnings per share were €0.010 (€0.080).
REVENUE AND EARNINGS
| € millions (€m) | Q1 2023 | Q1 20221) | Variance | LTM2) | FY 20221) |
| Revenue | 419.3 | 381.7 | 10% | 1,547.8 | 1,510.2 |
| Operating profit (EBIT) | 10.7 | 22.2 | -52% | 43.7 | 55.2 |
| Operating profit margin | 2.6% | 5.8% | 2.8% | 3.7% | |
| Net profit | 2.1 | 12.0 | -82% | 3.8 | 13.7 |
| Net profit margin | 0.5% | 3.1% | 0.3% | 0.9% | |
| Basic/diluted earnings per share, € | 0.010 | 0.080 | -88% | 0.010 | 0.079 |
| EBITDA | 54.3 | 62.3 | -13% | 209.1 | 217.1 |
| EBITDA margin | 12.9% | 16.3% | 13.5% | 14.4% | |
| Adjusted EBITDA | 57.4 | 67.2 | -15% | 224.1 | 233.9 |
| Adjusted EBITDA margin | 13.7% | 17.6% | 14.5% | 15.5% | |
| EBITDAaL | 30.6 | 42.6 | -28% | 118.9 | 130.9 |
| EBITDAaL margin | 7.3% | 11.1% | 7.7% | 8.7% | |
| Adjusted EBITDAaL | 33.7 | 47.5 | -29% | 133.9 | 147.7 |
| Adjusted EBITDAaL margin | 8.0% | 12.4% | 8.7% | 9.8% | |
| EBITA | 16.0 | 31.7 | -50% | 65.2 | 80.9 |
| EBITA margin | 3.8% | 8.3% | 4.2% | 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 April 2022-31 March 2023)
CEO Statement
Covid-19 is no longer a factor for our trading, allowing the great underlying strength and growth to be more apparent in both revenue and margin. Covid-19 was only around one per cent of revenue this quarter and has largely become part of the normal testing portfolio.
What clearly stands out is the strength of the underlying business (excluding Covid-19). To illustrate over the 4 years since Q1 2019 (the last undisturbed first quarter before Covid-19), we have more than doubled the size of the underlying business from just under €200m to now over €400m for the quarter, a CAGR of 20% revenue growth. This is despite all the negative impacts on the underlying business from Covid-19 restrictions and the war in Ukraine. Furthermore, organic growth in the underlying business this quarter versus the prior year quarter was an outstanding 24.6%, again illustrating the strength of our business model and markets.
Clearly we manage cost inflation with the price increases already implemented and continue to actively mitigate inflation. Underlying EBITDA margin for the Group and both divisions (excluding Covid-19) expanded robustly versus the prior year quarter. The Group’s underlying EBITDA margin expanded 129 bps versus the prior year quarter. This is despite a significant drag from immature units, in particular Medicover Hospitals in India and Hospital Services in Romania. As commented throughout the second half of 2022, the impact from price increases would be visible from early 2023.
Our commitment to continuing our growth pace is clear with the investments made over the last year in new facilities with medical service space up 34.2% versus the start of the prior year and with units starting to mature supporting margin growth. We are very encouraged with the progress we make to fill the new capacity, with for example the two new recently opened large hospitals in Maharashtra India, in Navi Mumbai and Pune, expected to break even at an EBITDAaL level into the third quarter. This would then be achieved within less than 12 months of starting those greenfield operations, an excellent outcome. In India in the next 9 months we will be opening a greenfield women & child hospital, a greenfield general hospital, a repurposed unit changed to a cancer center of excellence and possibly taking over 2 existing hospitals, potentially adding 5 new hospitals by year end. The new large hospital in Bucharest will commence operations during the second quarter.
Revenue for the quarter grew by 9.9% to €419.3m (€381.7m), with an organic growth of 4.6%. EBITDA was €54.3m (€62.3m), decreased by 12.8%, representing an EBITDA margin of 12.9% (16.3%). EBITDA excluding Covid-19 was €53.0m (€36.3m) a margin of 12.8% (11.5%).
Healthcare Services revenue grew by 32.7% to €276.1m (€208.1m), with an organic growth of 20.7%. Organic revenue growth excluding Covid-19 was an even more impressive 27.7%, with price representing approximately 12.1 percentage points of this growth. Members grew to 1.7 million with 36 thousand new members over the quarter. EBITDA grew by 34.5% to €34.2m (€25.4m), an EBITDA margin of 12.4% (12.2%). It is very positive to see margin expansion despite the dilution of new units with lower occupancy, pre-opening costs and cost inflation. Healthcare Services EBITDA for the underlying business expanded a healthy 53 bps to 12.4% (11.8%).
Diagnostic Services revenue amounted to €149.1m (€178.5m) a decrease by 16.5%, with a negative organic growth of 13.7%. Underlying organic revenue growth excluding Covid-19 revenue was strong and amounted to 19.5% with good performance across all large units and almost all smaller units. Underlying test volume (excluding Covid-19) was up 5.4% at 31.2 million (29.6 million). Covid-19 testing has largely receded, now being more in line with a normal testing service. EBITDA amounted to €26.5m (€44.2m), a decrease of 40.1%, an EBITDA margin of 17.7% (24.7%). Underlying EBITDA was €25.2m (€20.3m) and a margin of 17.4% (16.3%) an increase of 109 bps compared to prior year quarter.
Despite the ongoing war in Ukraine, our colleagues continue their extraordinary commitment and ability to gradually rebuild our activities in the country.
The strength of Medicover’s model and markets is showing in this quarter and will continue as we move through 2023.
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. The information was submitted for publication through the agency of the contact person set out below at 7.45 (CEST) on 27 April 2023. This interim report and other information about Medicover is available at medicover.com.
Financial calendar
Annual general meeting 27 April 2023
Interim report April-June 26 July 2023
Interim report July-September 3 November 2023
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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
