Capio interim report jan-sep 2000

[ I N T E R I M R E P O R T ] JAN - SEP 2000 Capio listed on the O-list of OM Stockholm Exchange on October 16 * Net sales increased by 56 per cent and amounted to SEK 2,440M (1,563). Organic growth amounted to 10 per cent. * EBITA increased by 40 per cent to SEK 111M (79), excluding items affecting comparability, equivalent to an operating margin of 4.5 per cent (5.1). * Earnings after financial items amounted to SEK 245M including items affecting comparability amounting to SEK 147M. * 1,700 employees signed up for the warrant programme. * Previa and Volvat now wholly owned through non-cash issues. After the end of the reporting period: * An agreement has been made to acquire the remaining 50 per cent of the shares in Örebrohälsan Previa. * Actica Omsorg has made an agreement with the municipality of Bærum in Norway to take over operations of an elderly care facility in Sandvika outside Oslo. Capio January-September 2000 The Group's growth rate continues to be high. The operating margin is however lower than in the corresponding period last year, due to the fact that St. Göran's Hospital, like healthcare in general, has low production during the third quarter. The seasonal effect has increased due to the relative weight of St. Göran's Hospital within the Group. Consolidated net sales rose by 56 per cent and amounted to SEK 2,440M (1,563). Consolidated earnings before goodwill amortisation, EBITA, increased by 40 per cent to SEK 111M (79), excluding items affecting comparability. Items affecting comparability amounted to SEK 147M and include a refund of SPP funds, which amounted to SEK 155M net after provision for anticipated one-off costs for pensions and costs ahead of the listing of the Group amounting to SEK 8M. The operating margin amounted 4.5 per cent (5.1). Earnings after financial items amounted to SEK 245M. The decision of Rikstrygdeverket in Norway to reduce payment for certain types of X-ray examinations (MR) has meant a clear fall in earnings for Capio's radiology operations in Norway. The issue of equal conditions for private and public producers in Norway is suggested to be further investigated and the decision of equal remuneration condition will be put forward. In September, the remaining 30 per cent of the shares in AB Previa were acquired via a non-cash issue to Stiftelsen Statshälsan. The acquisition of the remaining 50 per cent in the Volvat Group was also completed via a non-cash issue to Foinco Invest. In August, Lundby Hospital in Gothenburg started a dialysis unit. Solna Röntgen, Capio's first radiology operations in Stockholm outside St. Göran's Hospital, was established in September. The expanded psychiatry operations in London and the new clinics in Liverpool and Lausanne are now in operation. The new units that are being established during the autumn have start up costs that will have an impact on the earnings for the year since they will not reach full occupancy levels until next year. These new units will contribute to a considerable extent to the organic growth 2001. 1,700 employees signed up for Capio's warrant programme. A total of 2,067,800 were applied for, i.e. 64 per cent of the total number of 3,240,000 warrants. Each warrant entitles the holder to acquire one Capio share at SEK 50 per share by May 31 2004 at the latest. After the end of the reporting period On 16 October, Capio was listed on the O-list of the OM Stockholm Exchange. The liquidity of the shares has been good. On 3 November, the closing price was SEK 62.00 per share, equivalent to a market cap of SEK 3,668M. The focusing on the core operations at St. Göran's Hospital has continued and the production kitchen was divested during October. The hospital's X- ray operations, whose annual turnover is SEK 110 million, have been incorporated and will be transferred to Diagnostic Services as of the turn of 2001. Previa made an agreement to acquire the remaining 50 per cent of the shares in Örebrohälsan. Örebrohälsan Previa, previously consolidated as an associated company, has an annual sales rate of SEK 28M. In October, Actica Omsorg signed an agreement with the municipality of Bærum in Norway to take over operations of an elderly care facility in Sandvika outside Oslo. It is a four-year contract and the annual sales rate amounts to approximately SEK 26M. The take-over is set for March 27, 2001. The Swedish Government has recently presented their earlier announced bill restricting the County Councils´ right to transfer the operation of emergency hospitals to for-profit organisations. The law shall not be valid for emergency hospitals already contracted by a County Council. Capio now evaluates the long-term consequences of the bill. Business Sectors Capio has three overall business sectors: - Healthcare Services - Diagnostic Services - Elderly Care Services In total, some 40 operating units are included in the Group with operations in Sweden, Norway, Denmark, Great Britain, Switzerland and Poland. Healthcare Services The strong growth of this business sector continues. Net sales rose by 90 per cent to SEK 1,804M (949). Key to this high growth has been the acquisition of St. Göran's Hospital. The earnings trend was positive and EBITA amounted to SEK 90M (40). Increased sales, combined with continuous efficiency and quality improvements have gradually increased profitability. The Previa Group has continued its promising performance in terms both of growth and profitability. Adjustment towards services with higher care and therapy content has meant that certain wards within the psychiatry operations in London have been closed for reconstruction. The business sector's organic growth was 12 per cent for the period. Diagnostic Services Net sales of this business sector amounted to SEK 478M (449). EBITA amounted to SEK 38M (47). The volume development for the radiology operation is high and demand is strong. The decision of Rikstrygdeverket in Norway to seek substantially reduced payments for a certain type of X- ray examinations (MR) has caused a difficult price situation and has affected net sales negatively by approximately SEK 25M. Capio's laboratory operations report higher order inflows and the profit trend is favourable. Elderly Care Services Net sales of business sector Elderly Care Services amounted to SEK 186M (163) where the organic growth answered for the total increase in sales by 14 per cent. EBITA amounted to SEK 17M (16). The occupancy rate has increased since the beginning of the year and is now on a high level. Housing in accordance with the concept for integrated care and guaranteed long-term accommodation will be established in the city of Halmstad. Parent Company sales and earnings Sales in the Parent Company, Capio AB, amounted to SEK 9M (15) and earnings before goodwill amortisation and items affecting comparability to SEK -42 M (-29). The Parent Company's investments amounted to SEK 2M (2). Financial position The Capio Group has a strong financial position with a net working capital amounting to -214 MSEK. The equity to assets ratio amounted to 40 per cent. By the end of the third quarter, the Group net cash position amounted to SEK 29M and liquid funds amounted to SEK 281M. Personnel The average number of employees during the period was 4,464. The number of staff amounts to approximately 5,600. Per Båtelson President and CEO Gothenburg, 6 November 2000 Capio AB (publ) ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2000/11/06/20001106BIT00450/bit0001.doc The full report http://www.bit.se/bitonline/2000/11/06/20001106BIT00450/bit0002.pdf The full report