Year-end report January–December 2022
Fourth quarter
- Revenue amounted to €397.7m (€376.3m), an increase of 5.7% with an organic reduction of 2.5%.
- Operating profit (EBIT) was €8.7m (€41.6m), representing an operating margin of 2.2% (11.1%).
- Net profit amounted to €2.2m (€28.4m), which represents a margin of 0.5% (7.6%).
- EBITDA was €53.0m (€75.1m), a decrease by 29.6%. EBITDA margin was 13.3% (20.0%).
- EBITDAaL amounted to €29.9m (€56.9m), corresponding to an EBITDAaL margin of 7.5% (15.1%).
- Net cash flow from operating activities was €41.2m (€53.9m).
- Basic/diluted earnings per share were €0.013 (€0.186).
Full year - Revenue amounted to €1,510.2m (€1,377.4m), an increase of 9.6% with an organic growth of 1.9%.
- Operating profit (EBIT) was €55.5m (€159.4m), representing an operating margin of 3.7% (11.6%).
- Net profit amounted to €14.0m (€106.6m), which represents a margin of 0.9% (7.7%).
- EBITDA was €217.4m (€270.4m), a decrease by 19.6%. EBITDA margin was 14.4% (19.6%).
- EBITDAaL amounted to €131.2m (€210.8m), corresponding to an EBITDAaL margin of 8.7% (15.3%).
- Net cash flow from operating activities was €170.2m (€216.7m).
- Basic/diluted earnings per share were €0.081 (€0.686).
- The board of directors proposes a dividend for 2022 of €0.12 (€0.12) per share.
REVENUE AND EARNINGS
| € millions (€m) | Q4 2022 |
Q4 2021 |
Variance | FY 2022 |
FY 2021 |
Variance |
| Revenue | 397.7 | 376.3 | 6% | 1,510.2 | 1,377.4 | 10% |
| Operating profit (EBIT) | 8.7 | 41.6 | -79% | 55.5 | 159.4 | -65% |
| Operating profit margin | 2.2% | 11.1% | 3.7% | 11.6% | ||
| Net profit | 2.2 | 28.4 | -92% | 14.0 | 106.6 | -87% |
| Net profit margin | 0.5% | 7.6% | 0.9% | 7.7% | ||
| Basic/diluted earnings per share, € | 0.013 | 0.186 | -93% | 0.081 | 0.686 | -88% |
| EBITDA | 53.0 | 75.1 | -30% | 217.4 | 270.4 | -20% |
| EBITDA margin | 13.3% | 20.0% | 14.4% | 19.6% | ||
| Adjusted EBITDA | 57.7 | 78.8 | -27% | 234.2 | 280.5 | -17% |
| Adjusted EBITDA margin | 14.5% | 20.9% | 15.5% | 20.4% | ||
| EBITDAaL | 29.9 | 56.9 | -48% | 131.2 | 210.8 | -38% |
| EBITDAaL margin | 7.5% | 15.1% | 8.7% | 15.3% | ||
| Adjusted EBITDAaL | 34.6 | 60.6 | -43% | 148.0 | 220.9 | -33% |
| Adjusted EBITDAaL margin | 8.7% | 16.1% | 9.8% | 16.0% | ||
| EBITA | 15.2 | 45.9 | -67% | 81.2 | 171.2 | -53% |
| EBITA margin | 3.8% | 12.2% | 5.4% | 12.4% |
Definition and reconciliation of alternative performance measures are available at www.medicover.com/financial-information.
CEO Statement
We can conclude that 2022 has been a most turbulent and challenging year with several external factors impacting the business – war, cost inflation, swing of Covid-19 services and at the same time as executing a strong organic and inorganic investment programme.
I am proud of the way we have managed to handle and navigate through these challenges in 2022. We have managed pricing in our biggest business line and reported record member growth, our Ukraine staff continue to provide services despite war. Over 2022, we have invested at record levels across the Group driving future growth. 2022 has demonstrated again the resilience of our business model and with solid revenue growth of 9.6% for the year replacing and more the reduction in Covid-19 revenue.
I am also proud that we have met and exceeded our 3-year financial targets during difficult trading conditions, and we are also launching new, even more ambitious growth targets for the three years ahead. For 2020-2022 we have significantly exceeded the organic revenue growth target with compound annual organic growth of 14.6% (target 9-12%). Absolute organic revenue growth for the period was €428m, which is 5/6 the revenue of the entire group in 2016, the year before our listing. On top of this our inorganic activity has added a further €238m of revenue from 40 transactions over that period. Compound annual growth of adjusted EBITDA was 23.3% for the period and a margin of 15.5% for 2022, up from 14.8% in 2019.
Revenue for the final quarter grew by 5.7% to €397.7m (€376.3m), despite the reduction in Covid-19 revenue of €49.9m, with a negative organic growth of 2.5%. Revenue for the year grew 9.6% to €1,510.2m (€1,377.4m) with an organic growth of 1.9%, even with the negative swing of €126.7m in Covid-19 revenue.
Fee-For-Service and other services (FFS) increased by 1.1% during the quarter, now representing 59% of total revenue. Full year FFS revenue growth was 6.3%, representing 59% of total revenue.
EBITDA for the quarter amounted to €53.0m (€75.1m), a margin of 13.3% (20.0%). EBITDA for the full year amounted to €217.4m (€270.4m), a margin of 14.4% (19.6%). The record pace of organic expansion has weighed on margins over the second half of the year, and margins are still pressured in some markets where prices have not yet adapted.
Healthcare Services quarterly revenue grew by 35.0% to €259.0m (€191.9m), with an organic growth of 19.0%. Revenue growth for the year was 28.9%, with an organic growth of 15.8%, reaching €917.1m (€711.6m).
At the end of the year the division had 1.7 million members, growing with 24 thousand members in the quarter and with 177 thousand members for the year. FFS grew 39.2% in the quarter and represented 55% of divisional revenue, full year FFS revenue growth was 33.4%.
Healthcare Services EBITDA grew by 34.8% to €38.2m (€28.4m) in the quarter, an EBITDA margin of 14.8% (14.8%). EBITDA for the year grew by 13.8% to €125.9m (€110.7m) corresponding to a margin of 13.7% (15.6%).
Diagnostic Services quarterly revenue decreased by 24.1% to €143.9m (€189.7m), with a negative organic growth of 24.2%, with the swing in Covid-19 revenue reducing €42.5m impacting the most, followed by the war in Ukraine. Revenue for the year decreased by 10.8%, with a negative organic growth of 12.7%, reaching €612.5m (€686.8m), reflecting the negative swing of Covid-19 of €73.1m and war.
The number of laboratory tests for the quarter amounted to 29.3 million (35.9 million), a decrease of 18.2%. The number of tests for the full year reached 119.3 million (133.4 million). At the end of the year, the number of blood-drawing points (BDPs) amounted to 876 (852). FFS decreased by 28.1% for the quarter and represented 67% of divisional revenue, full year FFS revenue growth was -15.5%.
Diagnostic Services EBITDA amounted to €23.0m (€53.3m) in the quarter, an EBITDA margin of 15.9% (28.1%). EBITDA for the year was €118.7m (€179.7m), an EBITDA margin of 19.4% (26.2%). The swing in contribution from Covid-19 services and the war in Ukraine weighing on the results.
Organic growth is expected to continue at a high rate in 2023, however the year will have its set of challenges, a high inflation backdrop with continuing energy sourcing and price issues for European markets, while interest rates are expected to remain at higher levels. Offsetting this will be a relatively strong employment market and demand being resilient. The war in Ukraine shows no signs of abating. Covid-19 is a problem that seems to have largely passed from a pandemic viewpoint and is lived with as a permanent feature.
The high level of organic and inorganic investment will normalise in 2023 from the high 2022 levels and the investments made in 2022 will continue to mature in 2023 as capacity is filled. The dilutive effect of these openings and new capacity will be visible in the first half of 2023, with additional openings still scheduled for the first half of 2023.
As expressed in our new 3-year financial targets, organic revenue is expected to exceed €2.2 billion in 2025, a CAGR of 13.4%. Inorganic activity will in addition continue, more weighted in the second half of the 3-year period and will boost further the expected outcome.
The fundamental shortfall in infrastructure and health provision in our higher growth markets ensures a continuing opportunity to deploy capital and grow Medicover’s capacity and business.
We expect to see a 2025 adjusted organic EBITDA in excess of €350 million, further enhanced by additional inorganic investments. This is despite a very significant facility expansion, adding over 200,000 m2 of medical space over the last year, and the short-term dilution of these new facilities.
I would like to pass on my thanks to our employees for their tremendous efforts over 2022, caring for our patients’ health. This went to extraordinary levels in particular in Ukraine, where we have continued to provide essential services through the conflict over most of unoccupied Ukraine, and thanks to our colleagues and families in the surrounding countries who have been so supportive.
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 (CET) on 17 February 2023.
Financial calendar
Capital Markets Day 17 February 2023
Annual report week 13 2023
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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
