Interim report January-September 2017: A quarter focusing strongly on improvements
- Extensive cost-cutting program implemented in the Swedish clinics
- Sales growth picked up, with organic growth of 6 percent
- Natural for specialist health care business to have lower activity in the third quarter
- Investments in Vårdsamverkan result in a third segment for GHP
- Operative phase in the UAE continued positive trend but payments are not yet on a par with last year
Third quarter 2017
- Sales revenues increased to SEK 191.9 million (189.1)
- Organic growth amounted to 6.1 percent (15.3)
- EBITDA amounted to SEK -0.2 million (7.4)
- EBITDA margin amounted to -0.1 percent (3.9)
- Result after tax (EAT) amounted to SEK -2.8 million (0.8)
- Result per share amounted to SEK -0.05 (0.01)
First three quarters 2017
- Sales revenues increased to SEK 702.3 million (682.6)
- Organic growth amounted to 3.9 percent (14.3)
- Adjusted EBITDA amounted to SEK 27.5 million
- EBITDA amounted to SEK 11.2 million (57.3)
- EBITDA margin amounted to 1.6 percent (8.4)
- Result after tax (EAT) amounted to SEK -8.5 million (30.3)
- Result per share amounted to SEK -0.14 (0.39)
During the third quarter this year we took a big step in the right direction compared with the start of the year. The Nordic Region is moving in the right direction and International is developing according to plan. However, we now need to shift to a higher gear in the improvement work, amongst other things through a focused cost-cutting program.
The Nordic Region progressed in the quarter due to a better focus on planning and cost control. We are at present carrying out considerable cost-cutting program at the head office and at the clinics with the greatest challenges regarding profitability. We anticipate that we will save a total of at least SEK 20 million on an annual basis. These savings will gradually start to have an impact in the coming six months and we do not anticipate any major restructuring costs. At the same time we are carrying out a number of efficiency projects, with increased daily activity using our existing resources. There is great demand for our services, which facilitates these processes. Examples of measures taken are shorter care times, more operations per theatre and a greater number of appointments.
In International our hospitals developed according to plan and we took several steps forward this quarter regarding the key ratios controlling our remuneration. Compared with the previous year, the difference is that we are evaluated this year on the basis of the hospitals’ actual results while last year it was our preparatory work. It takes a little time to return to the same profitability as during the preparatory work, but we anticipate that we will get there. We now see how we are improving each month. In addition to this difference, we have also set up a local development office which is working on a number of different projects in the Middle East, such as a hospital for the potential neurorehabilitation that we announced previously. We see a great potential in the region and it is only in the past six months that we have seriously begun to work on local business development.
Vårdsamverkan is our start-up business where, together with the insurance companies, we work on developing entire care chains. Normally the purchase of care from both the public sector and insurance companies is based on price per individual measure, and very little consideration is given to the total costs for care or to qualitative results. The room for improvements in efficiency regarding cost per measure taken is limited. This in turn means that both our and our customers’ profitability is put under pressure when the need for care increases. On the other hand, we can do a great deal to reduce the total costs. We can do this by developing entire care chains, working with preventative care and through digital solutions. This is most effectively done through population responsibility and after two years of collaboration with Skandia we have now proved that it works. We can raise both efficiency and the level of service a considerable amount. In order to make clearer what we are doing in this area, we are now making Vårdsamverkan a segment of its own.
During the quarter we started up the planning of care for Trygg Hansa’s health care insurance customers. This means that we coordinate all care for these patients. This leads to some start-up losses, but gives considerable future value as we build up a large bank of knowledge about how insurance patients make use of health care. As the focus in the field is largely on individual measures, this knowledge is scarce, but it is necessary in order to be able to develop new collaboration and more efficient care chains.
As I see it, the Nordic Region is our base, where we continue to have great opportunities for growth in a stable environment and where we are now carrying out considerable cost-cutting measures. In International we benefit from our Nordic knowledge and our soon 10 years of experience in the Middle East, where there are, with our new business development office, great opportunities for extremely profitable growth. Finally, Vårdsamverkan is our developmental segment, where we work on new collaborative solutions and take advantage of modern digital solutions and the opportunities that entire care chains provide for greater efficiency.
26 October 2017
GHP Specialty Care AB (publ)
The Board and CEO
Queries should be addressed to:
Daniel Öhman, CEO, Tel: +46 708 55 37 07
Philip Delborn, CFO, Tel: +46 702 12 52 64
GHP is an internationally active health care provider that operates specialist clinics in a select number of diagnostic areas through the application of a business model that is unique in the health care industry, where leading doctors become partners and shareholders. Each clinic specialises in a particular patient group, and this leads to increased efficiency and higher quality. This is the cornerstone of GHP’s business philosophy – “Quality through specialisation”. GHP shares are traded on the Small Cap list of Nasdaq Stockholm under the ticker symbol “GHP”.
GHP Specialty Care AB (publ) | Corp. ID No. 556757-1103
Södra Hamngatan 45 | SE-411 06 Gothenburg | Sweden
Tel +46-31 712 53 00 | Fax +46-31 313 13 21 | www.ghp.se
GHP Specialty Care AB (publ) is required to publish the information herein pursuant to the Swedish Securities Market Act. This information was published, through the agency of the contact persons set out above, on 26 October 2017 at 08:00 am CET.
This is a translation of the Swedish version of the press release. When in doubt, the Swedish wording prevails.