Pihlajalinna Interim Report 1 January–31 March 2017 (3 months)

Pihlajalinna Plc           Interim Report             11 May 2017 at 8.00 a.m.

Pihlajalinna Interim Report 1 January–31 March 2017 (3 months)

Profitability improvement continued, Pihlajalinna prepares for the healthcare and social welfare reform

Brief look at January–March:

  • Revenue amounted to EUR 110.0 (100.1) million – an increase of 10 per cent
  • Operating profit (EBIT) amounted to EUR 5.4 (4.2) million
  • Adjusted operating profit (EBIT) amounted to EUR 5.7 (4.2) million – an increase of 37 per cent
  • EBITDA amounted to EUR 8.9 (7.0) million
  • Adjusted EBITDA amounted to EUR 9.1 (7.0) million – an increase of 30 per cent
  • Number of personnel at the end of the reporting period was 4,519 (4,228)
  • Earnings per share was EUR 0.15 (0.10)
KEY FIGURES AND RATIOS 1–3/2017      
3 mths
1–3/2016       
3 mths
2016       
12 mths
INCOME STATEMENT
Revenue, EUR million 110.0 100.1 399.1
Adjusted EBITDA, EUR million 9.1 7.0 28.9
Adjusted EBITDA, % 8.3 7.0 7.2
EBITDA, EUR million 8.9 7.0 27.9
EBITDA, % 8.1 7.0 7.0
Adjusted operating profit (EBIT), EUR million 5.7 4.2 16.6
Adjusted operating profit, % 5.2 4.2 4.2
Operating profit (EBIT), EUR million 5.4 4.2 15.1
Operating profit, % 4.9 4.2 3.8
Profit before tax (EBT), EUR million 5.0 3.8 13.7
SHARE RELATED INFORMATION
Earnings per share (EPS), EUR 0.15 0.10 0.39
Equity per share, EUR 4.89 4.56 4.74
OTHER INFORMATION
Return on capital employed (ROCE), % 10.3 4.8 10.8
Return on equity (ROE), % 11.7 3.5 11.1
Equity ratio, % 42.9 43.8 46.5
Gearing, % 27.2 21.5 21.9
Interest-bearing net debt, EUR million 28.2 20.7 22.1
Net debt/adjusted EBITDA, 12 mths 0.9 1.3 0.8
Gross investments, EUR million* 4.6 10.3 27.4
Cash flow from operating activities, EUR million        13.5 14.0 32.3
Cash flow after investments, EUR million 9.5 3.9 6.8
Average number of personnel (FTE)** 3,686 3,365 3,503
Personnel at the end of the period 4,519 4,228 4,407

* Finance leases are not included in Gross investments
** Pihlajalinna has on 1 January, 2017 transitioned to reporting the number of personnel on average as full-time equivalents (FTE) instead of the previous Average number of personnel indicator.
 

Pihlajalinna’s outlook for 2017 unchanged

Pihlajalinna’s revenue is expected to grow and adjusted EBITDA to improve compared to 2016. In the financial year 2016, revenue was EUR 399.1 million and the adjusted operating profit was EUR 16.6 million.

Aarne Aktan, CEO of Pihlajalinna:

"Pihlajalinna had a good first quarter of 2017. The organic growth of 5.2 per cent in revenue is reasonable, and we can be satisfied with the improvement in profitability.

The first quarter went according to plan in the Primary and Social Care (P & S) segment and its profitability improved as expected. We can be particularly happy with the Omapihlaja health centres included in the segment ranking at the top of the health centre comparison by the City of Tampere, in which quality and queuing time were among the criteria. Pihlajalinna is also taking part in the freedom of choice experiment in Tampere, in which the residents of certain areas can select the provider of their social and healthcare services.

The Private Clinics and Specialised Care segment’s (C & S) quarter was reasonable. The development of profitability was a slight disappointment. The profitability of Private Clinics and Dental Care fell slightly short of expectations. Within the segment, the profitability of Occupational Healthcare and Surgical Operations improved delightfully. From this quarter onwards, we will report the revenue and profitability of Public Specialised Care separately. This provides a better picture of the profitability of other business operations.

We will strongly develop our digital services this year. We launched a new remote doctor application during the first quarter. We will continue the investments to reach our objective of having the best digital services in the market by the end of the year.

The national expansion plan we announced in February has been detailed further. We will open new private clinics at least in Oulu, Turku and Tapiola in Espoo this year. In all, we will open approximately 15 new private clinics across Finland during 2017 and 2018. We estimate that the investments required for this will remain under EUR 40 million. At the same time, we will proceed towards a single brand, Pihlajalinna.

The government’s proposal on the legislation on the freedom of choice relating to the healthcare and social welfare reform was introduced on Tuesday, 9 May. The proposal lacks the liability of the primary care provider for the costs of specialised care, which we consider regrettable. Should the primary care provider be liable for the costs, the providers would have a strong incentive for prevention and swift effective treatment. Based on current knowledge, we expect the Act to pass in the fall.

There is strong political pressure on possible new municipal outsourcings. This has slowed down decision-making in many municipalities. In other respects, the company’s operating environment has remained stable."

Financial reporting in 2017

Half year financial report January–June: Thursday 17 August 2017
Interim report January–September: Thursday 9 November 2017

Briefing

Pihlajalinna Plc will hold a briefing for analysts and the media on Thursday 11 May 2017 at 9.30 a.m. in the Paavo Nurmi room at Hotel Kämp, Pohjoisesplanadi 29, 00100 Helsinki, Finland.

Helsinki, 10 May 2017

Pihlajalinna Plc’s Board of Directors

Further information
Aarne Aktan, CEO, +358 40 342 4440
Niclas Köhler, CFO, +358 40 342 4420
Siri Markula, Head of Communications and IR, +358 40 743 2177, siri.markula@pihlajalinna.fi

Distribution
Nasdaq Helsinki
Major media
investors.pihlajalinna.fi

Pihlajalinna in brief
Pihlajalinna is one of the leading private social and healthcare services providers in Finland. The Company provides social and healthcare services for households, companies, insurance companies and public sector entities in private clinics, health centres, dental clinics and hospitals around Finland. Pihlajalinna provides general practitioner and specialised care services, including emergency and on-call services, a wide range of surgical services, occupational healthcare and dental care services, in private clinics and hospitals operating under the Dextra brand. Under the Pihlajalinna brand the Company, in cooperation with the public sector, offers social and healthcare service provision models to public sector entities with the aim of providing high quality services for public pay healthcare customers.

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