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Year-end report January–December 2023

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Fourth quarter

  • Revenue amounted to €461.9m (€397.7m), an increase of 16.1% with an organic growth of 13.5%.
  • Operating profit (EBIT) was €19.0m (€8.9m), an increase of 117.2%, representing an operating margin of 4.1% (2.2%).
  • Net profit amounted to €8.6m (€2.3m), which represents a margin of 1.9% (0.6%).
  • EBITDA was €66.4m (€53.2m), an increase of 25.3%. EBITDA margin was 14.4% (13.3%).
  • EBITDAaL amounted to €40.8m (€30.1m), an increase by 36.1%, corresponding to an EBITDAaL margin of 8.8% (7.5%).
  • Net cash flow from operating activities was €42.5m (€41.2m).
  • Basic/diluted earnings per share were €0.078 (€0.013).
     

Full year

  • Revenue amounted to €1,746.4m (€1,510.2m), an increase of 15.6% with an organic growth of 11.6%.
  • Operating profit (EBIT) was €61.4m (€55.2m), representing an operating margin of 3.5% (3.7%).
  • Net profit amounted to €18.4m (€13.7m), which represents a margin of 1.1% (0.9%).
  • EBITDA was €243.8m (€217.1m), an increase by 12.3%. EBITDA margin was 14.0% (14.4%).
  • EBITDAaL amounted to €144.9m (€130.9m), corresponding to an EBITDAaL margin of 8.3% (8.7%).
  • Net cash flow from operating activities was €205.0m (€170.2m).
  • Basic/diluted earnings per share were €0.118 (€0.079).
  • The board of directors proposes a dividend for 2023 of €0.12 (€0.12) per share.

REVENUE AND EARNINGS

€ millions (€m) Q4
2023		 Q4
20221)		 Variance FY
2023		 FY
20221)		 Variance
Revenue 461.9 397.7 16% 1,746.4 1,510.2 16%
Operating profit (EBIT) 19.0 8.9 117% 61.4 55.2 11%
Operating profit margin 4.1% 2.2% 3.5% 3.7%
Net profit 8.6 2.3 289% 18.4 13.7 35%
Net profit margin 1.9% 0.6% 1.1% 0.9%
Basic/diluted earnings per share, € 0.078 0.013 500% 0.118 0.079 49%
EBITDA 66.4 53.2 25% 243.8 217.1 12%
EBITDA margin 14.4% 13.3% 14.0% 14.4%
Adjusted EBITDA 68.3 57.9 18% 253.9 233.9 9%
Adjusted EBITDA margin 14.8% 14.5% 14.5% 15.5%
EBITDAaL 40.8 30.1 36% 144.9 130.9 11%
EBITDAaL margin 8.8% 7.5% 8.3% 8.7%
Adjusted EBITDAaL 42.7 34.8 23% 155.0 147.7 5%
Adjusted EBITDAaL margin 9.2% 8.7% 8.9% 9.8%
EBITA 23.3 15.4 53% 82.6 80.9 2%
EBITA margin 5.1% 3.8% 4.7% 5.4%

Definition and reconciliation of alternative performance measures are available at www.medicover.com/financial-information.
1) 2022 is restated for IFRS 17 Insurance contracts. For further information, refer to note 1.

CEO Statement

I am pleased to look back at another year of strong growth. In February 2023, we announced new, even more ambitious growth targets for the next three-year period, and so far, we have delivered on our plan to meet the new targets. This is a clear message in a still very challenging world.

If we look further back to 2019, the last undisturbed year, before Covid-19 and the war in Ukraine, we have more than doubled revenue and EBITDA during these four years, while we also have invested more growth capital for future growth than ever before. A very strong achievement of which we are very proud. The last four years have arguably been the most challenging times in Europe for many decades. This performance is a strong testament to the diversification of our business model and the essential services offered, as well as the underlying growth of our markets.

After a couple of years of significant investments, last year we have worked on consolidating acquired businesses, improved operational efficiency, and increased capacity utilisation. We have continued our organic growth capital investments in line with historic levels, while we have significantly slowed down acquisition growth, as communicated beginning of last year. During the last two quarters of the year, we have seen an increase in our main profit measures compared to the same quarters in previous year. However, margins in Diagnostic Services remain under pressure as we have not yet seen an increase of the reimbursement levels in Germany. In Healthcare Services we are negatively impacted by new hospital start-ups in India and Romania. Despite this, EBITDA in the quarter increased by over 25% for the Group.

Unfortunately, the war in Ukraine shows no signs of abating. Our colleagues there are doing a phenomenal job. Ukraine represents 4 per cent of total business and we are back around pre-war volume levels, a testament to the resilience and adaptability of our operations in the face of challenging circumstances.

Revenue for the quarter continued to grow strongly and was up 16.1% to €461.9m (€397.7m), with an organic growth of 13.5%. Revenue for the year grew 15.6% to €1,746.4m (€1,510.2m) with an organic growth of 11.6%.

EBITDA in the quarter was €66.4m (€53.2m), an increase by 25.3%, representing an EBITDA margin of 14.4% (13.3%). EBITDA for the full year amounted to €243.8m (€217.1m), a margin of 14.0% (14.4%).

Fee-For-Service and other services (FFS) increased by 11.9% in the quarter, now representing 57% of total revenue. Full year FFS revenue growth was 13.8%, representing 58% of total revenue.

Healthcare Services quarterly revenue grew by 25.2% to €324.4m (€259.0m), with an organic growth of 19.1%. Revenue growth in the year was 30.6%, with an organic growth of 21.0%, reaching €1,197.7m (€917.1m).

At the end of the year the division had 1.8 million members, growing with 34 thousand members over the quarter and with 103 thousand members for the year. We continue to see very robust trading in our corporate paid business, particularly in Poland in both Health and Sport, but also in Romania.

FFS increased by 19.7% in the quarter and represented 53% of divisional revenue, full year FFS revenue growth was 28.5%.

EBITDA grew by 20.8% in the quarter to €46.2m (€38.4m), an EBITDA margin of 14.3% (14.8%). EBITDA for the year grew by 36.8% to €171.8m (€125.6m), an EBITDA margin of 14.3% (13.7%).

Diagnostic Services revenue amounted to €143.1m (€143.9m), a decrease by 0.6%, with an organic growth of 3.2%. Excluding Covid revenue in the comparative quarter, organic growth was a healthy 11.5%, illustrating the positive underlying volume development. Revenue growth for the year was -6.7%, with an organic reduction of 2.5%, amounting to €571.2m (€612.5m).

29.3 million tests were performed in the quarter (29.3 million) and 119.2 million tests in the full year (119.3 million). FFS increased by 0.2% in the quarter, now representing 68% of divisional revenue, full year FFS revenue decrease was 4.4%.

EBITDA amounted to €20.4m (€23.0m), a decrease of 10.7%, an EBITDA margin of 14.3% (15.9%). EBITDA in the full year amounted to €88.1m (€118.7m), a decrease of 25.7% and mainly related to no contribution from Covid-19, an EBITDA margin of 15.4% (19.4%).

As we navigate the landscape of 2024, we find ourselves in a robust position, with investments from previous years that will continue to mature supported by continued growth investments. As the year progresses, we are also likely to be more active with our acquisition agenda. 

We remain confident on the trading outlook for 2024, with continued good organic growth and continued profit improvement, this puts us on a good path to be able to achieve the medium-term financial targets for the period 2023-2025.

Financial targets by year-end 2025:

  • organic revenue should exceed €2.2bn
  • An adjusted organic EBITDA in excess of €350m
  • Loans payable net of cash and liquid short-term investments/adjusted EBITDAaL ≤3.5x

I would like to express a sincere gratitude to all our staff across our markets for their dedication, hard-work, and professionalism – thank you.

Fredrik Rågmark
CEO

This report has not been subject to review by the Company’s auditor.
For full report, see attached pdf.

This is information that Medicover AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication through the agency of the contact person set out below at 7.45 (CET) on 9 February 2024. This year-end report and other information about Medicover is available at medicover.com.

Financial calendar
Annual report                                                                                               week 13 2024
Interim report January-March                                                                      26 April 2024, 7.45 CEST
Annual general meeting                                                                               26 April 2024
Interim report April-June                                                                              25 July 2024, 7.45 CEST
Interim report July-September                                                                    30 October 2024, 7.45 CET

For further information, please contact:
Hanna Bjellquist, Head of Investor Relations
Phone: +46 70 303 32 72
E-mail: hanna.bjellquist@medicover.com

Conference call: A conference call for analysts and investors will be held today at 09.30 CET. To listen in please register here. To ask questions please register here.

Medicover is a leading international healthcare and diagnostic services company and was founded in 1995. Medicover operates a large number of ambulatory clinics, hospitals, specialty-care facilities, laboratories and blood-drawing points and the largest markets are Poland, Germany, Romania and India. In 2023, Medicover had revenue of €1,746 million and more than 45,000 employees. For more information, go to www.medicover.com

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