Capio AB (publ) Interim report January – March 2018

January - March 2018

• Net sales MSEK 4,156 (3,914). Organic sales growth 1.1% (3.3) and total sales growth 6.2% (8.6)
• EBITDA[1] MSEK 331 (342) and margin 8.0% (8.7). EBITDA decreased by 3.2%
• EBITA[1] MSEK 211 (232) and margin 5.1% (5.9). EBITA decreased by 9.1%  
• Operating result (EBIT) MSEK 176 (209) and margin 4.2% (5.3). EBIT decreased by 15.8%
• Profit for the period[2] MSEK 124 (152). Earnings per share after dilution[2] SEK 0.87 (1.10)
• Timing of Easter impacts comparability of Q1 2018 numbers vs. Q1 2017 as the period 2018 comprised fewer working days than last year; -2 days in Nordic and Germany and -1 day and 4 extra days of school holidays in France

[1] Refer to page 32 in Interim report January–March 2018 for definitions of EBITDA and EBITA.
[2] Profit for the period refers to profit attributable to parent company shareholders. Refer to note 2 in Interim report January–March 2018 for calculation of earnings per share (before and after dilution).
  

CEO comment:

“Solid start considering calendar effects and a temporary severe flu impact in Germany.”
  
A continued solid performance in Nordic and France confirm our medical strategy with focus on productivity and patient growth.
 
Despite the calendar effects, both Nordic and France increased sales and result. This balanced the German shortfall coming mainly from the flu impact.
  
Online consultations in Capio Go are increasing rapidly and will now start to be reimbursed.

Most important in Q1 was the continued positive result development in Capio France. During the quarter, Capio France has despite one working day less treated 3.2% more patients with 2.3% less FTEs vs. year-end 2017 – in line with the program from last year.
  
The price decrease that was announced by the French government in February (from March 1, 2018) is impacting price levels negatively by 1.2%, which was slightly better than expected and less than last year’s price reduction of 2.1%. The French government will retrospectively reimburse an additional part of the volume component of the 2017 price reduction. Also adjusted for this, the positive development continued. The impression of a continued ease of the price pressure was supported by the French president Macron, who recently stated in a TV interview that there will be no more savings on hospitals in the coming four years.
  
The step-by-step change from a geographical to a specialized organization in France is continuing. This has already improved performance of the big five hospitals. Also a number of smaller hospitals are performing better than planned. The specialization is further supported by the relocation of operations in Toulouse and Lyon into two new, purpose built hospitals during Q4 2018. The new hospitals are state of the art facilities, which will support implementation and development of Modern Medicine and Rapid Recovery. To improve volumes and productivity, patient pathways are separated for in- vs. outpatients and the outpatient pathway is split into a fast track for light cases and a track for more heavy cases. We believe that these new hospitals will improve our competitiveness and we have already signed agreements with new doctors. The completion of the projects will lead to capital expenditures (around MSEK 200, to be funded by divestment proceeds from vacated properties) and restructuring costs (around MSEK 55) in 2018 as described on page 6.
  
Capio Nordic continued the strong development from 2017. Organic sales growth reached 2.4% despite the negative calendar effects and also EBITA exceeded last year’s Q1. Capio S:t Göran’s hospital continues to take over emergency patients from the Karolinska hospital and the number of emergency patients is expected to exceed 100,000 in 2018.
  
Capio Proximity Care now has 93 primary care centers after the recent acquisition of the Nova centers in the south of Sweden. The primary care centers in Stockholm have turned into a positive listing trend and are improving financial results.
  
The implementation of the digital concept Capio Go in Sweden is continuing and was as per end April available to around 650,000 of Capio’s 800,000 listed patients. The number of digital consultations is growing rapidly and has now reached an annualized speed of 40,000 visits compared to 30,000 visits three months ago. Starting in May, Capio Go will be reimbursed with net SEK 570 per visit as described on page 5.
  
A very severe flu season in Germany impacted sales and result negatively in the quarter. Capio Germany’s short-term sick-leave peaked in February/March at 15% in some care units, three times the normal level. During April the situation has come back to normal. Focus is now on implementing the earlier planned activities for shorter AVLOS and productivity improvements.
   
We continue to work hard to maintain and improve the good trends in France, Nordic and Capio Go. The digital offering in primary care has started well and we are now preparing to include other medical specialties. Better tools for doctors and nurses will improve quality outcomes and productivity. Acquisitions will also continue to contribute to the total growth of the Group.
  

Thomas Berglund
President and CEO
  

Presentation of the interim report
Investors, analysts and media are invited to participate in a telephone conference on May 3, 2018 at 13.00 (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 93
UK: +44 20 3008 9804
US: +1 855 753 2237
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, 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 is information that Capio AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person Henrik Brehmer set out above, at 12.30 (CET) on May 3, 2018.
  

About Capio
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. Capio operates in five countries; Sweden, Norway, Denmark, France and Germany. In 2017, Capio’s 13,314 employees (average full-time equivalents) provided healthcare services during 5.1 million patient visits across the Group’s facilities, generating net sales of MSEK 15,327. Capio operates across three geographic segments: Nordic (57% of Group net sales 2017), France (35% of Group net sales 2017) and Germany (8% of Group net sales 2017). For more information about Capio, please see www.capio.com.

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