Capio AB (publ) Interim report January – June 2016

April – June 2016

  • Net sales MSEK 3,573 (3,441). Organic sales growth 4.0% (3.5) and total sales growth 3.8% (2.5)
  • Operating result (EBITDA) [1] MSEK 276 (237) and operating margin 7.7% (6.9). EBITDA increased by 16.5%
  • Operating result (EBITA) [1] MSEK 172 (136) and operating margin 4.8% (4.0). EBITA increased by 26.5%  
  • Operating result (EBIT) MSEK 157 (66) and operating margin 4.4% (1.9). EBIT increased by 137.9%
  • Profit for the period [1] MSEK 113 (-31) and adjusted profit for the period [1] MSEK 123 (60).
  • Earnings per share [2] SEK 0.80 (-0.25) and adjusted earnings per share [2] SEK 0.87 (0.47)

January – June 2016

  • Net sales MSEK 7,176 (6,919). Organic sales growth 3.8% (3.2) and total sales growth 3.7% (2.8)
  • Operating result (EBITDA) [1] MSEK 572 (528) and operating margin 8.0% (7.6). EBITDA increased by 8.3%
  • Operating result (EBITA) [1] MSEK 367 (327) and operating margin 5.1% (4.7). EBITA increased by 12.2%  
  • Operating result (EBIT) MSEK 333 (228) and operating margin 4.6% (3.3). EBIT increased by 46.1%
  • Profit for the period [1] MSEK 235 (42) and adjusted profit for the period [1] MSEK 260 (154).
  • Earnings per share [2] SEK 1.67 (0.33) and adjusted earnings per share [2] SEK 1.84 (1.22)

[1] Refer to page 28 for definitions of EBITDA and EBITA. Profit and adjusted profit refer to profit attributable to parent company shareholders.
[2] Earnings per share and adjusted earnings per share before and after dilution were the same. Refer to note 2 for calculations of earnings per share .

 
CEO comments:

“Strong development in all segments – France on track for full price decrease compensation in full year 2016.”  

  • Organic sales growth of 4% and EBITA growth of 27% in the second quarter 2016
  • Continued strong development in Nordic and Germany
  • France improving pace during the second quarter and is on the right track to reach a flat margin development for the full year 2016

 
We are now in a trend of strong positive development in all segments and we are in line with our plans going forward.

Nordic showed good net sales and result develop­ment. Organic sales growth in the quarter was close to 5% and for the first six months it was just below 4%. Operating margin (EBITA) improved more than one percentage point in the quarter and close to a percentage point in the first six months, compared to the same periods 2015.

The productivity increase in Proximity care in Sweden is conti­n­uing on plan. Capio S:t Göran’s hospital in Stockholm is enjoy­ing double digit sales growth as a consequence of the transfer of patient volumes in connection with the preparation of the opening of the down-sized New Karolinska Hospital. The new and larger accident and emergency department (A&E) at Capio S:t Göran opened in late April and will contribute to continued good growth. Specialist care has also good develop­ment and is preparing to strengthen and streamline the offer in the free healthcare choice market. Norway has successfully integrated last year’s acquisitions and is improving results.

France has over the first six months almost fully compensated for the Government’s price cut in March of over 2%. In the first quarter the negative margin gap was 0.4 percentage point compared to the same quarter last year. In the second quarter the gap decreased to 0.1 percentage point. Ongoing actions are aiming at closing the gap during the rest of the year. These actions contain reorganization of employees, more efficient procure­ment, continuous impr­ovements in a few remaining lagging units and business development in medical specialties. When compensating the remaining margin gap during the second half of the year, this will create a good starting point for next year’s work to continue improve margins, as France will then end the year with a higher run rate than the average margin for 2016.

It is encouraging to see that the growth in patient volumes was very strong in France in the quarter – 6.3%. This reflects the attractiveness of our focus on Modern Medicine and the continuous shift from in- to out-patient treatments. It can be noted that doctors in Capio Clinique du Tonkin Heart Clinic in Lyon performed the first ever daycare TAVI operation (cardiac valve insertion) in France on an 86 year old patient. The patient arrived early in the morning and left in good health and spirit just after 6 pm on the same day.

As expected, Germany had a strong second quarter and is for the first six months on plan and positioned for continued impr­ovements. The improvements in the general hospitals continued with both strong organic sales growth and increased producti­vity giving improved margins.

In total 731 employees signed up for the convertible debenture loan with a total amount of MSEK 155, whereof all members of Group management (MSEK 23) and 12 out of 14 business area and regional managers (MSEK 16) participated.

The focus going forward is of course on securing the ongoing strong trends in the current businesses. We are also increasing the preparations for digitalization in all areas from easier access for patients over workflow improvements to standardizing adm­inistration and medical records. There are a number of ongoing pilot projects and these will be scaled up when proven efficient.

We are also actively searching for interesting acquisitions.

Thomas Berglund

President and CEO

  
Presentation of the interim report

Investors, analysts and media are invited to participate in a telephone conference on July 22, 2016 at 09.30 am (CET). President and CEO Thomas Berglund and CFO Olof Bengtsson will present the report and answer questions. The telephone conference will be audio casted live on www.capio.com . To participate in the telephone conference, please register at www.capio.com and dial in five minutes prior to the start of the conference call.

Sweden: +46 8 566 426 90
UK: +44 203 008 98 07
US: +1 855 753 22 35
Finland: +35 898 171 04 93
France: +33 170 75 07 12

Prior to the start of the telephone conference, presentation slides will be available at www.capio.com .

A recorded version of the audio cast will be available at www.capio.com during the afternoon (CET).

 
Financial calendar

November 3, 2016, Interim report January – September 2016

February 10, 2017, Full year report January – December 2016

 
For further information

Thomas Berglund, President and CEO
Telephone: +46 733 88 86 00, E-mail: thomas.berglund@capio.com

Olof Bengtsson, CFO
Telephone: +46 761 18 74 69, E-mail: olof.bengtsson@capio.com

Kristina Ekeblad, Investor Relations Manager
Telephone: +46 708 31 19 40, E-mail: kristina.ekeblad@capio.com

Henrik Brehmer, SVP Group Communication and Public Affairs
Telephone: +46 761 11 34 14, E-mail: henrik.brehmer@capio.com

For further information regarding Capio’s IR activities, refer to www.capio.com

This information is information that Capio AB (publ) 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 Henrik Brehmer set out above, at 08.00 (CET) on July 22, 2016.

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About Us

Capio AB (publ) is a leading, pan-European healthcare provider offering a broad range of high quality medical, surgical and psychiatric healthcare services through its hospitals, specialist clinics and primary care units. Since the Danish operation was acquired at the beginning of 2017, Capio operates in five countries; Sweden, Norway, Denmark, France and Germany. In 2015, Capio’s 12,360 employees provided healthcare services during 4.6 million patient visits across the Group’s facilities, generating net sales of MSEK 13,486. Capio operates across three geographic segments: Nordic (54 percent of Group net sales 2015), France (38 percent of Group net sales 2015) and Germany (8 percent of Group net sales 2015). For more information about Capio, please see www.capio.com.