Capio AB (publ) Interim report January – March 2016
January – March 2016
- Net sales was MSEK 3,603 (3,478). Organic sales growth was 3.7% (2.9) and total sales growth was 3.6% (3.2)
- Operating result (EBITDA) was MSEK 296 (291) with an operating margin of 8.2% (8.4). EBITDA increased by 1.7%
- Operating result (EBITA) was MSEK 195 (191) with an operating margin of 5.4% (5.5). EBITA increased by 2.1%
- Earnings per share was SEK 0.86 (0.59) and adjusted earnings per share was SEK 0.97 (0.75)
- The timing of Easter holidays impacted the development in the quarter negatively with an estimated result impact of MSEK -20
- Net capex RTM was MSEK 432, which corresponded to 3.2% of net sales
- Net debt as of March 31, 2016 was MSEK 3,009, which corresponded to a financial leverage of 3.0x
“Our efforts to implement Modern Medicine and Modern Management are giving results.”
- Continued AVLOS reduction in all segments
- Good patient growth in the French segment
- Productivity improvements in Proximity Care in Sweden according to plan
- Strong focus on price compensation in France
- Increased acute care capacity at Capio S:t Göran’s Hospital in Sweden
Solid operational development
Our strong focus on medical development in the Group continued to deliver improvements in the first quarter 2016. Better treatment methods have reduced the average length of stay (AVLOS) by -5% compared to the first quarter last year. This is more notable in France and Germany where treatment times in general are long and less in the Nordics with already short treatment times. Shorter stays in hospital not only means a quicker recovery for the patients, but also less exposure to the hospital environment with less infections as a result.
Our Rapid Recovery approach has in France resulted in good growth in patient volumes, even when considering the impact last year from the limited doctor strike against the French government. The number of outpatients has grown by about 11% and the number of inpatients has grown by almost 6% in France during the first quarter 2016. Inpatient growth in the Nordics was also strong with a 4% growth overall which included a 7% inpatient growth in Capio S:t Göran.
Our ambition to increase productivity in Proximity Care in Sweden is following the plan made during autumn 2015, reducing the number of employees with a full year number of -90 FTE in 2016. As the Stockholm County Council is changing from per visit payment to a higher degree of fixed capitation payment, as most other county councils already have done, the number of doctor visits has also decreased according to plan.
Sound financial development
The operational development in the segments is positively impacting the financial development. The Group’s organic sales growth is up close to one percentage point from 2.9% to 3.7% despite the negative Easter effect in the first quarter, which is primarily seen in the Nordics and Germany (Easter holidays occurred in March this year but in April 2015).
The operating result (EBITA) was up 2.1% despite the Easter effect with an estimated impact of MSEK -20.
In France, last year’s price decrease of -2.5% has been fully compensated for during the quarter. The 2016 price decrease effective March 1 has so far been partly compensated for, resulting in stable results. While reinforced productivity measures deployed in 2015 are delivering according to plan, additional activities are introduced to compensate for the 2016 price decrease. We strongly believe in our strategic focus on Rapid Recovery and the ongoing shift from in- to outpatient care, which is well in line with national ambitions to improve French healthcare.
Our main focus for the rest of 2016
Following the challenging pricing environment in France our most important target is to fully compensate this year’s price decrease. The ongoing AVLOS reduction has not yet been fully reflected in the personnel costs. Thus we are intensively working with this potential and have also increased our focus on procurement activities.
In the Nordics, our most important target is to complete the ongoing productivity project and implement the employee reduction program in Proximity Care. This is well on way and when completed we will accelerate the work to implement digitalized consultation pathways for patients.
Capio S:t Göran has during April 2016 opened the new accident and emergency department (A&E) with capacity to receive more than 100,000 patients per year. During the start-up phase of the new A&E patient volumes will gradually build up and we estimate a 40% volume growth over the coming 5 years. To accommodate this growth the hospital will be enlarged with approximately 60 new beds (333 beds today), during the same period of time, which together with a continued shortening of AVLOS will facilitate this growth.
Our strategy of Modern Medicine and Modern Management works, both to handle challenging market conditions and to drive new business opportunities in our current platform and through acquisitions.
President and CEO
 Refer to page 23 for definitions of EBITDA and EBITA.
 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.
Presentation of the interim report
Investors, analysts and media are invited to participate in a telephone conference on May 11, 2016 at 13.30 (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 9807
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).
For further information
Thomas Berglund, President and CEO
Telephone: +46 733 88 86 00
Olof Bengtsson, CFO
Telephone: +46 761 18 74 69
Kristina Ekeblad, Investor Relations Manager
Telephone: +46 708 31 19 40
Henrik Brehmer, SVP Group Communication and Public Affairs
Telephone: +46 761 11 34 14
For further information regarding Capio’s IR activities, refer to www.capio.com
Capio AB (publ) discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for publication at 12.30 (CET) on May 11, 2016.