Highlights - Oresa Ventures focuses exclusively on healthcare and changes its name to Medicover.
Highlights · Oresa Ventures focuses exclusively on healthcare and changes its name to Medicover. · Continued strong development by Medicover. Sales rose by 77 percent, with a positive results trend. · Profit for the year amounted to E6.3 million before goodwill amortization, or E0.54 (0.12) per share, and a loss of E11.8 million after goodwill amortization, or E-1.0 (0.12) per share. · Successful divestment of our holding in Romania's Brewery Holdings. More than a 100 percent IRR return. I am writing this just a few weeks after we made a preliminary announcement that the Board will recommend to the shareholders that Oresa Ventures focus on healthcare and become an operating healthcare company. Our current holdings of unlisted investments will gradually be divested. As a result of our new focus, Oresa Ventures will change its name to Medicover. Financial results Profit for the year amounted to E6.3 million before goodwill amortization, or <0.54 per share (0.12). Total goodwill arising out of the consolidation of Medicover amounted to E18.2 million, which was written off in its entirety against the year's result, leading to a net loss of E11.8 million, or -1.0 per share (0.12). The company's equity after fully eliminating goodwill amounts to E44.6 million. Market development There was further positive macroeconomic development in the countries we focus on, primarily Poland and other Central European countries but also Romania, where preparations for EU membership continued to be a major political and economic factor influencing many aspects of society. We saw a continued strengthening of democratic institutions in the region. The region continues to experience above average growth. Poland grew by approximately 5 percent. Romania's economy also reported good growth in 2000. Investments During the year Oresa Ventures made two new investments and two follow-up investments. The first new investment was in Medinsite AB, where Oresa Ventures together with IT Provider, a leading Swedish investment firm, invested E1.6 million for an equity stake of 33 percent. During the last quarter Oresa Ventures also committed up to E3.2 million for an investment in i-Start. The final capitalization has not been concluded, but Oresa Ventures expects to hold around 40 percent of the equity. During the year Oresa Ventures made a follow-up investment of E0.8 million in Churchill Media, a Romanian outdoor media company in which it now holds 30 percent of the equity. We also made a follow-up investment of E0.7 million in Intersource, a temporary staffing and recruitment agency in Poland. Intersource developed strongly during the past year. Exits As previously announced, we completed an extremely successful exit from our investment in Brewery Holdings Ltd, the largest brewery group in Romania. The investment generated an IRR return of more than 100 percent. We are proud to have played an active part in making Brewery Holdings the successful company it is today. Medicover In 2000 Medicover continued to develop very strongly. Compared with the previous year, sales rose by 77 percent to E19.9 million. The pro forma operating loss, i.e. including other expenses in Oresa Ventures, fell by E2.8 million to a loss of E2.4 million in 2000. At year-end Medicover's subscription base consisted of around 70,000 clients. Medical costs have been kept under control. Administrative and selling costs rose at a significantly slower rate than sales, which explains the improvements in results. Russian bonds The value of the remaining portfolio of Russian bonds increased during the year from U0 to U2.4 m. As liquidity increases, we expect to gradually liquidate this portfolio. Liquidity At year-end we had available financial resources of around e14.6 m, including committed credit facilities. Change of strategy Oresa Ventures invested in Medicover in 1995, when it was in a start-up phase. We have since devoted considerable financial and management resources to build the business and develop its management resources. We have gradually increased our ownership position and in 1999 issued Oresa Ventures shares in exchange for practically all the outstanding Medicover shares. We currently hold 95 percent of the capital. Medicover is the market leader among healthcare providers to businesses in Poland as well as Romania, Hungary and Estonia. Altogether, we operate more than 30 clinics and have a subscription base of over 70,000 clients. Healthcare is still underdeveloped and under-funded in all the countries in which Medicover operates, and there is a strong political consensus that the future development of the sector must be structured through partnerships between public and private initiatives. The private healthcare market in Poland and the rest of the region is expected to grow strongly for many years to come. To build and manage a multinational healthcare business is a complex and challenging task and requires total focus and dedication. The Board therefore took the decision to change the strategic orientation of Oresa Ventures to become a dedicated healthcare company listed in Stockholm and with the name Medicover to fully reflect our new orientation. We are convinced that this is a business opportunity with great potential and that the change will benefit our shareholders. Existing portfolio of unlisted shares The new Medicover will not make any further investments in unlisted shares. Our existing portfolio will be managed to natural exits during the next three years in order to maximize the value of the holdings. The value of the portfolio excluding Medicover is E39 million, and we expect these investments to be realized in the years ahead. The proceeds of these divestments will be used in Medicover and as dividends to shareholders. Management No changes will be made in the legal structure of the company. Fredrik Rågmark will continue to serve as Managing Director and Joe Ryan will remain as Financial Director. Dr. Paul Lenz, currently responsible for the operations of Medicover N.V., will continue to hold the position of Business Development and Medical Director. I will continue as Chairman of the company. Outlook Medicover will continue to focus on expanding the business in Poland and gradually improve and broaden its product offerings. Operations in other countries that are currently small in comparison to Poland will show rapid growth, and in years to come we will seek out opportunities in neighboring countries where we can utilize our management resources and know-how in the healthcare industry. We therefore feel that Medicover, as the leader in a growing market, has an opportunity to grow on a sustainable basis by at least 25 percent per annum and achieve an operating margin before depreciation of 20 percent. Jonas af Jochnick Chairman of the Board Basis of preparation The accounting policies used in this report are the same as those used in the annual audited financial statements of Oresa Ventures Holding S.A. except for the early adoption of IAS 39, "Financial Instruments: Recognition and Measurements". The above figures are audited, without qualification. Medicover Holdings N.V. and subsidiaries have been consolidated into the above figures for the first time in 2000. Reporting Dates · Annual General Meeting 8 May · 3-month interim report 16 May · 6-month interim report 17 August · 9-month interim report 14 November · Preliminary report 26 February 2002 For further information contact Managing Director Fredrik Rågmark +32 475 75 19 64 Oresa Ventures Holding S.A. PHONE: +32-2-357 55 77, Fax: +32-2-357 55 05. www.oresaventures.com ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/02/26/20010226BIT00330/bit0002.doc The full Year- end report http://www.bit.se/bitonline/2001/02/26/20010226BIT00330/bit0001.pdf The full Year- end report