Capio interim report jan - march 2001

CAPIO INTERIM REPORT JAN - MARCH 2001 Stable development continues ·Net sales increased by 16 per cent to SEK 985 (847 M). Organic growth amounted to 12 per cent. ·EBITA excluding items affecting comparability amounted to SEK 54 M (48), corresponding to an operating margin of 5.5 per cent (5.6). ·Earnings after financial items amounted to SEK 47 M. ·Bromma Närsjukhus, a local hospital in Stockholm-Bromma, is scheduled to open on January 1, 2003. ·New X-ray unit started at Globen in Stockholm. Developments since March 31, 2001: ·Lundby Hospital, a local hospital, has renewed its care- services contract, corresponding to annual revenues of approximately SEK 100 M. The contract is for a period of five years commencing on September 1, 2001. Capio has advanced negotiations that may or may not lead to make a recommended cash offer for Community Hospitals PLC in the UK. Capio January-March 2001 The Group is continuing to show a favourable rate of growth. The first quarter was characterised by preparations for the establishment of new operations. The Group had an organic growth of 12 per cent. Consolidated earnings also increased and amounted to SEK 54 M, excluding goodwill amortisation and items affecting comparability. Consolidated net sales increased by 16 per cent and amounted to SEK 985 M (847). Consolidated earnings before goodwill amortisation, EBITA, and excluding affecting comparability, totalled SEK 53.8 M (47.6). The operating margin was 5.5 per cent (5.6). Earnings after financial items amounted to SEK 47 M (43). During the three-month period, an X-ray unit was installed at Globen in Stockholm and a new mammography facility was started up in Skaraborg. Within the psychiatric area of operations, a new day-care department was opened at Nordiska Klinikerna AB in Upplands Väsby and an equivalent facility is currently being established in Malmö. Nova Medical has signed a co-operation agreement with America's ACM regarding global clinical studies for the pharmaceuticals industry. In co-operation with primary healthcare, St. Göran's Hospital opened a specialist department in Kista, outside Stockholm. The decision has also been made to start operations at Bromma Närsjukhus at the beginning of 2003. This local hospital will become a medical centre for the western suburbs of Stockholm. During the period, Capio's Board of Directors decided to establish the Capio Research Foundation. A provision of SEK 10 M was made for the Foundation in the year-end accounts for 2000. The UK occupational health company, Marsh Health Ltd., which was acquired in December 2000, has been integrated within the Capio Group. The company has been renamed Previa UK. Following the end of the report period: Lundby Hospital has renewed its contract with Västra Götaland region.The contract, which is for a five-year period, corresponds to annual revenues of approximately SEK 100 M. Nova Medical has extended its contract to conduct laboratory medicine operations at Västra Frölunda Hospital in Gothenburg. Areas of operation Capio is active in three main business sectors: · Healthcare Services. · Diagnostic Services. · Elderly Care Services. In total the Group has some 40 units, which conduct operations in Sweden, Norway, Denmark, the United Kingdom, Switzerland and Poland. Healthcare Services The operations of this business area continued to grow during the period. Net sales rose by 13 per cent to SEK 732 M (624). The business area's organic growth amounted to 12 per cent during the first quarter. The trend of earnings was also positive and EBITA totalled SEK 47 M (36). Efficiency and quality improvement measures are conducted on an ongoing basis. The underlying demand remained strong and resulted in a number of small supplementary contracts with public sector principals. Hospital operations commenced the period with a production level that was lower than planned, but this was offset by a high level of production towards the end of the period. St Göran's Hospital signed an agreement with the Sörmland County Council regarding specialised orthopaedic care and a new light-emergency unit is being started. Lundby Hospital extended its care-services contract for an additional five years. Outpatient Healthcare operations in Sweden noted a high occupancy rate during the quarter. Stability is good and increased resources are being reserved for quality, service and IT investments. Occupational healthcare activities are experiencing an expansive phase. Operations in Norway are also developing favourably. The forthcoming "Fastlege" reform for general practitioners, which comes into force at mid-year 2001, could have an adverse affect on the inflow of patients to Capio's clinics in Norway. A favourable level of patients was also noted in the area of Psychiatriy operations. The newly established operations in London and Liverpool developed well during the period. Development work to document "best practice" for eating disorder care was started in a number of countries. Diagnostic Services Net sales for this business area amounted to SEK 224 M (172). EBITA totalled SEK 17 M (20). Organic growth was 17 per cent. Radiology operations showed very favourable volume growth and market shares continued to increase, especially for more advanced services, such as magnetic imaging and computed tomography. Low compensation levels in Norway are still depressing margins, however. Globen Röntgen (X-ray) in Stockholm is a new full-service facility. Capio's Laboratory Medicine operations continued to develop well and structural benefits in the areas of purchasing, methodology and quality development plus a common IT system made a positive contribution. Elderly Care Services Elderly care operations noted sales during the period of SEK 64 M (61), with organic growth accounting for the entire 6 per cent rise in sales. EBITA amounted to SEK 4 M (4). The level of patients served was good. Construction of a new Trygghetsboende service unit in Halmstad was started during the period. Parent Company's sales and earnings The Group Parent Company, Capio AB, reported sales during the period of SEK 6 (4) and EBITA excluding items affecting comparability of SEK -16.3 M (-14.6). The Parent Company´s investments amounted to SEK 0.0 M (0.1) during the period. Financial position The Capio Group has a strong financial position, with a net working capital amounting to SEK -264 M. The Group's equity to assets ratio amounted to 38 per cent. At the end of the first quarter the Group had net cash position of SEK 5 M and liquid funds of SEK 237 M. Personnel During the period, the average number of employees was 4,754. Per Båtelson President and Chief Executive Officer Gothenburg, April 24, 2001 Capio AB (Publ) Capio, SEK M Net sales EBITA Operating margin, % Jan- Jan- Full- Jan- Jan- Full- Jan- Jan- Full- Mar Mar year Mar Mar year Mar Mar year 2001 2000 2000 2001 2000 2000 2000 2000 2000 Healthcare 732 624 2 493 46,6 36,2 139,8 5,4 5,8 5,6 Services Diagnostic 224 172 658 17,0 20,3 52,9 6,4 11,8 8,0 Services Elderly Care 64 61 249 4,0 4,2 26,2 6,2 6,9 10,5 Services Other -35 -10 -43 - -13,0 -48,5 - - 13,8 Sub total 985 847 3 357 53,8 47,7 170,4 5,5 5,6 5,1 Items 2,1 - 152,5 affecting comparability Capio 985 847 3 357 55,9 47,7 322,9 5,7 5,6 9,6 Consolidated Income Statement, SEK M Jan- Jan- Full- Mar Mar year 2001 2000 2000 Net sales 985 847 3 357 Operating expenses -898 -771 -3 069 Depreciation -33 -28 -118 Items affecting comparability 2 0 152 EBITA 56 48 323 Goodwill amortisation -9 -3 -20 EBIT 47 44 303 Financial income 9 4 27 Financial expenses -9 -5 -21 Earnings after financial items 47 43 310 Minority interest 0 -4 -42 Taxes1) -16 -12 -52 Earnings after tax 31 27 215 1) The reporting of taxes in accordance with recommendation RR9 of the Swedish Financial Accounting Standards Council. Tax costs for year 2000 have been adjusted accordingly. Consolidated Balance Sheet, SEK M Jan- Full- Mar year 2001 2000 Goodwill 258 257 Other intangible fixed assets 22 21 Land and buildings 349 342 Machinery and medical equipment 456 414 Financial fixed assets, interest-bearing 108 103 Financial fixed assets, noninterest-bearing 14 14 Accounts receivable 447 418 Other current assets 239 212 Current interest-bearing receivables 31 72 Liquid funds 237 186 Total assets 2 161 2 039 Equity 826 785 Minority interest 4 5 Accounts payable 164 167 Advances from customers 220 163 Other interest-free items 567 538 Interest-bearing liabilities 380 381 Total equity and liabilities 2 161 2 039 Consolidated Cash Flow Analysis, SEK M Jan- Jan- Full- Mar Mar year 2001 20002 2000 ) 2) EBITA 56 48 323 Depreciation 33 28 118 Adjustment for non-cash flow affecting items -2 -5 -30 Change in working capital 19 34 66 Capital expenditure -65 -26 -194 Operating cash flow1) 41 79 283 Financial items -1 2 4 Paid tax -16 -5 -7 Free cash flow1) 24 76 281 Reversal of capital expenditure 65 26 194 Cash flow from current operations1) 89 102 475 Investments including acquisition -71 -27 -301 Cash flow from financing activities -36 -5 -185 Exchange gain/loss -4 1 -2 Change in liquid funds 51 71 -14 Change in interest-bearing items -36 21 212 Change in net debt 15 92 198 1) of which, items affecting comparability amounted to SEK 2 M in 2001 and SEK 160 M in 2000. 2) To illustrate Capio's development, the comparative figures for 2000 shown in the Cash Flow Analysis are pro forma, since Capio was formerly a business area within Bure Equity AB. Capio, SEK M Net EBIT sale A s Q 1 Q 4 Q 3 Q 2 Q 1 Q 1 Q 4 Q 3 Q 2 Q 1 2001 2000 200 2000 200 2001 2000 2000 2000 2000 0 0 Healthcare 732 689 538 642 624 46,6 50,0 14,7 38,9 36,2 Services Diagnostic 224 180 143 164 172 17,0 14,9 7,7 10,0 20,3 Services Elderly Care 64 63 63 62 61 4,0 8,7 9,0 4,3 4,2 Services Eliminations -35 -14 -9 -10 -10 -13,8 -14,1 -10,9 -10,5 -13,0 /Other Sub total 985 918 735 858 847 53,8 59,5 20,5 42,7 47,7 Items 2,1 5,0 30,9 116,6 - affecting comparabilit y Capio 985 918 735 858 847 55,9 64,5 51,4 159,3 47,7 The Capio share, SEK per share After dilution 2) Total no. of shares 59 163 575 61 213 875 Average number of shares during the 59 163 575 61 213 875 period Earnings after tax1) 0,53 0,52 Earnings after tax1) excluding items 0,49 0,49 affecting comparability Earnings after standard tax excluding 0,54 0,54 items affecting comparability Earnings after standard tax excluding 0,65 0,64 goodwill amortisation and items affecting comparability Shareholders' equity 13,97 15,19 1) Tax refers to the period's share of the estimated tax expenses for the year. 2) Out of the 3 240 000 warrants issued for the ESOP program, 2 052 800 warrants are subscribed while 1 187 200 are kept unsubscribed within the Group. Key ratios Jan-mar 2001 Full-year 2000 Equity, % 38 39 Net debt, SEK M 5 20 Capital employed, SEK M 835 810 Operating capital employed, SEK M 577 553 Return on operating capital employed, 35 35 (12 months), % Average no. of employees on annual 4 754 4 480 basis ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/04/24/20010424BIT00060/bit0002.doc http://www.bit.se/bitonline/2001/04/24/20010424BIT00060/bit0002.pdf