Interim report January March 2017 Telephone conference May 3, 2017 - - PowerPoint PPT Presentation

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Interim report January March 2017 Telephone conference May 3, 2017 - - PowerPoint PPT Presentation

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Interim report January March 2017 Telephone conference May 3, 2017 Thomas Berglund, CEO Olof Bengtsson, CFO A solid start to the year Highlights January March 2017 Solid development: 3.3% organic sales growth 19.0% EBITA

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SLIDE 1

Interim report January – March 2017

Telephone conference May 3, 2017

Thomas Berglund, CEO Olof Bengtsson, CFO

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SLIDE 2

Capio AB (publ) 2

A solid start to the year

Highlights January – March 2017

  • Solid development:
  • 3.3% organic sales growth
  • 19.0% EBITA growth
  • 24.6% Net profit growth
  • 2.9x financial leverage. Net debt at MSEK 3,255
  • Continued and further strengthened positive development in

Nordic and Germany driven by organic sales growth, productivity improvements and leverage from acquisitions

  • In France volume growth and productivity improvements

compensated for the price reduction in monetary terms. The aim is to reach a flat EBITA margin for the full year

  • Recent acquisitions are adding yearly sales of MSEK 900 with

a margin above Group average. Increased acquisition activity expected to continue

Increased acquisition activity

2017-05-03

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SLIDE 3

Capio Group

JAN - MAR FULL YEAR 2017 2016

∆, %

RTM 2016

Net sales 3,914 3,603 8.6 14,380 14,069 Organic sales growth, % 3.3 3.7 3.2 3.3 Operating result (EBITDA) 342 296 15.5 1,107 1,061 Margin, % 8.7 8.2 7.7 7.5 Operating result (EBITA) 232 195 19.0 681 644 Margin, % 5.9 5.4 4.7 4.6 Profit for the period 152 122 24.6 434 404 EPS after dilution, SEK 1.10 0.86 3.10 2.86 Net capital expenditure

  • 67
  • 96
  • 429
  • 458

In % of net sales 1.7 2.7 3.0 3.3 Net debt 3,255 3,009 3,255 2,872 Financial leverage 2.9 3.0 2.9 2.7

  • Organic sales growth from volume growth and a higher case mix as overall price

increases were limited. Recent acquisitions impact total sales growth positively

  • Continued result and margin improvement in Nordic and Germany driven by

productivity improvements and leverage from recent acquisitions. France compensated for the price reduction in monetary terms

  • Profit for the period improved from the higher operating result
  • RTM March 2017 net capex back at the target level of 3.0%
  • Net debt and leverage impacted by the recent acquisitions

Capio AB (publ) 3

Group financial development

2017-05-03

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SLIDE 4
  • AVLOS (Average Length Of Stay) reduction in the Group

was -1.1% and -1.8% excluding geriatrics. The geriatric business is growing in all segments

  • AVLOS development was impacted by a higher case mix in

all segments but Nordic

  • Considering case mix changes AVLOS reduction was well in

line with the historical trend

Capio AB (publ) 4

Implementation of the Modern Medicine strategy – resulting in improved AVLOS

2017-05-03

Continued AVLOS reduction in 2017

JAN - MAR FULL YEAR AVLOS by segment, Days 2017 % 2016 RTM 2016 % 2015 % 2014 % 2013 Capio Nordic 3.95

  • 4.1

4.12 3.96 4.01

  • 2.7

4.12

  • 1.0

4.16

  • 1.2

4.21 Capio Nordic excl. geriatrics 2.84

  • 3.7

2.95 2.81 2.83

  • 3.4

2.93

  • 2.7

3.01

  • 3.2

3.11 Capio France 4.41

  • 0.9

4.45 4.45 4.47

  • 3.0

4.61

  • 2.9

4.75

  • 3.7

4.93 Capio France excl. geriatrics 4.33

  • 2.0

4.42 4.41 4.43

  • 3.7

4.60

  • 3.2

4.75

  • 3.7

4.93 Capio Germany 4.40 2.1 4.31 4.57 4.54

  • 1.5

4.61

  • 4.4

4.82 0.0 4.82 Capio Germany excl. geriatrics 3.89 1.3 3.84 4.06 4.04

  • 3.1

4.17

  • 6.1

4.44

  • 0.7

4.47 Capio Group 4.30

  • 1.1

4.35 4.35 4.37

  • 2.7

4.49

  • 3.0

4.63

  • 2.5

4.75 Capio Group excl. geriatrics 3.93

  • 1.8

4.00 3.99 4.01

  • 3.4

4.15

  • 4.2

4.33

  • 3.1

4.47

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SLIDE 5

Capio AB (publ) 5

France – Modern Medicine and Rapid Recovery reducing AVLOS

  • Capio France’s growth of hip and

knee replacements well above market growth also in 2017

  • Continued significant AVLOS

reduction for hip and knee replacements also in 2017. 9% more patients discharged within four days in RTM March 2017 compared with RTM March 2016

  • Total AVLOS reduction from 2011 to

March 2017 was -48% for Capio France

  • Steady growth in the number of

procedures performed in day care

Source: French market data; Scansanté (ATIH), Swedish market data; Socialstyrelsen

AVLOS development hip and knee replacements 2011-2016

Rapid Recovery strategy continues to deliver

Capio France – hip and knee prosthesis surgery 2017-05-03

Days

2011 2014 2015 2016

11-14, % 11-15, % 11-16, %

Capio France 8.2 5.6 5.0 4.5

  • 32
  • 39
  • 45

The French market 10.2 9.0 8.4

  • 12
  • 18
  • Capio Sweden

3.9 3.3 2.7 2.6

  • 15
  • 31
  • 33

The Swedish market

  • 4.7

4.4

  • Capio France Jan-Mar 2017 AVLOS at 4.3

days

Provided in daycare:

Number

1 8 26 160 450 534 541

55 54 44 33 19 11 7 2 10 20 30 40 50 60 70

8,000

7,000 6,000 5,000 4,000 3,000 2,000 1,000 5,529 2012 5,296 2011 4,911 2010 7,177 2016 6,939 2015 6,305 2014 5,949 2013 4,066 2017 RTM Number of procedures Discharged, % <= 4 days

Number of in- and outpatients %

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SLIDE 6

DIGITAL WHEN POSSIBLE, PHYSICAL WHEN NEEDED

Capio AB (publ) 6

eHealth is a growing part of the future

2017-05-03

Same place Same time

I need help!

Patient medical story Triage Different time Different place Different place Same time Self care

Acute hospital/ Specialist

Digital documentation of medical story. Supported by questions/algorithms

Digital consultations on track for roll-out from H2 2017 in primary care in Sweden

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SLIDE 7

Capio Nordic

JAN - MAR FULL YEAR 2017 2016

∆, %

RTM 2016

Net sales 2,153 1,904 13.1 7,833 7,584 Organic sales growth, % 4.9 3.0 4.3 3.8 Operating result (EBITDA) 152 112 35.7 562 522 Margin, % 1.7 5.9 7.2 6.9 Operating result (EBITA) 109 77 41.6 403 371 Margin, % 5.1 4.0 5.1 4.9 Net capital expenditure

  • 37
  • 44
  • 161
  • 168

In % of net sales 1.7 2.3 2.1 2.2

  • Strong organic sales growth in S:t Göran, the geriatric business

in Stockholm and in Norway. Recent acquisitions impact total sales growth positively

  • Organic sales growth, productivity improvements and leverage

from acquisitions behind the result growth. The timing of Easter between 2017 and 2016 also impacts results positively

  • Continued focus on Modern Management to drive patient time

and productivity

  • Digital consultations in primary care will start during the spring

and summer with a full roll-out from H2 2017

Capio AB (publ) 7

Segment – Capio Nordic

Solid net sales and result growth

2017-05-03

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SLIDE 8

Capio France

JAN - MAR FULL YEAR 2017 2016

∆, %

RTM 2016

Net sales 1,434 1,387 3.4 5,360 5,313 Organic sales growth, % 0.7 5.1 1.3 2.4 Operating result (EBITDA) 170 170 0.0 518 518 Margin, % 11.9 12.2 9.7 9.7 Operating result (EBITA) 111 111 0.0 283 283 Margin, % 7.7 8.0 5.3 5.3 Net capital expenditure

  • 24
  • 41
  • 227
  • 244

In % of net sales 1.7 3.0 4.2 4.6

  • Volume increase driven by all seven regions with a total

patient growth of 5.6% in 2017. The introduction of geriatrics in

  • ur hospitals continue to impact inpatient growth positively
  • Organic sales growth and result was impacted by a price effect
  • f MSEK -21 in 2017, which was compensated for in monetary
  • terms. The aim is to reach a flat margin for the full year
  • Actions related to FTE reorganizations (productivity), business

development combined with efficient procurement continue

  • Net capex impacted by divestments in 2017

Capio AB (publ) 8

Segment – Capio France

Continuing development of Modern medicine and Rapid Recovery

2017-05-03

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SLIDE 9

Capio Germany

JAN - MAR FULL YEAR 2017 2016

∆, %

RTM 2016

Net sales 327 312 4.8 1,187 1,172 Organic sales growth, % 4.6 1.7 4.8 4.0 Operating result (EBITDA) 45 38 18.4 115 108 Margin, % 13.8 12.1 9.7 9.2 Operating result (EBITA) 39 32 21.9 90 83 Margin, % 11.9 10.2 7.6 7.1 Net capital expenditure

  • 4
  • 10
  • 29
  • 35

In % of net sales 1.2 3.2 2.4 3.0

  • Outpatient growth, driven by the introduction of new medical

specialties and authorizations in 2017

  • Total sales growth impacted by the divestment in Q1 2017
  • Result driven by volume growth and productivity

improvements in the general hospitals. The timing of Easter

between 2017 and 2016 also impacts results positively

  • Entry into a new specialty through the acquisition of an eye

specialist clinic in Bremen

Capio AB (publ) 9

Segment – Capio Germany

Increased focus on Modern Medicine drives AVLOS reduction

2017-05-03

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SLIDE 10

JAN - MAR FULL YEAR Capio Group 2017 2016 RTM 2016 Net debt opening

  • 2,872
  • 2,936
  • 3,009
  • 2,936

Operating result (EBITA) 232 195 681 644 Capital expenditure

  • 78
  • 97
  • 445
  • 464

Divestments of fixed assets 11 1 16 6 Net capital expenditure

  • 67
  • 96
  • 429
  • 458

In % of net sales 1.7 2.7 3.0 3.3

Add-back depreciation 110 101 426 417 Net investments 43 5

  • 3
  • 41

Change in working capital

  • 130
  • 181
  • 75
  • 126

Operating cash flow 145 19 603 477

Cash conversion, % 62.5 9.7 88.5 74.1

Free cash flow after financial items and tax 114

  • 11

466 341

Cash conversion, % 49.1

  • 5.6

68.4 53.0

Capio AB (publ) 10

Cash flow

  • RTM March 2017 net capex back at the target level of 3.0%. Divestments planned

for 2016 realized in 2017

  • Working capital impacted by an improved DSO following some payments from 2016

received in 2017 and higher customer advances in France. In 2016 cash flow was negatively impacted by a change in timing of payments of social security charges in France

  • Income tax payments and financial items overall stable compared to last year

RTM net capex back at target level

2017-05-03

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SLIDE 11

Capio AB (publ) 11

Capital employed & financing

  • Operating capital employed above year-end 2016, mainly due

to the consolidation of the recent acquisitions (CFR and Backa)

  • The consolidation of the recent acquisitions impact other

capital employed

  • ROCE improving to last year considering the full year impact of

the result from recent acquisitions

  • Financial leverage at 2.9x impacted by the net cash flow

(including acquisition/divestment outflows of MSEK 498) and the improved EBITDA

Solid financial position – ready for more acquisitions

2017-05-03 2017 2016 Capio Group 31 Mar 31 Dec 31 Mar Operating capital employed 1,594 1,554 1,566 In % of net sales 11.1 11.0 11.5 Other capital employed 7,285 6,790 6,603

Capital employed 8,879 8,344 8,169

Return on capital employed, % 7.7 7.7 7.3 Net debt 3,255 2,872 3,009 Financial leverage 2.9 2.7 3.0 Equity 5.624 5,472 5,160

Financing 8,879 8,344 8,169

Net debt and financial leverage 2.0 2.5 3.0 3.5 4.0 2,000 2,500 3,000 3,500 4,000 Q1 Q2 Q3 Q4 Q1 2016 2017 Net debt Financial leverage MSEK x

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SLIDE 12

Ophthalmology, complex treatments of the eye incl. cataracts (MSEK 91) Ophthalmology, complex treatments of the eye incl. cataracts (MSEK 75) Specialist care, e.g. ortho- pedics, spine and gastro surgery (MSEK 366)

Increased acquisition activity

Capio AB (publ)

CFR Hospitaler A/S: Strengthening the Nordic home base and the Capio model Backa Läkarhus: Growing the primary care

  • ffering and strengthening the

basis for digitalization

Primary care including rehabilitation (MSEK 370)

Eye specialist clinic in Stockholm (Globen): Strengthening specialization Eye specialist clinic in Bremen: New specialty in Germany

Acquisitions (net sales of MSEK 900) will contribute positively to Group margin development 2017. Continued focus on acquisition activity

12 2017-05-03

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SLIDE 13

Capio AB (publ) 13

Financial targets

2017-05-03

Quarterly development 20151-2017 (RTM) Target and development The target is to grow organically at least in line with the market and add acquisition growth at least at a similar rate over time  Total sales growth 8.6% and organic sales growth 3.3% (Jan-Mar 2017)  Organic sales growth in line with estimated market growth in all markets  Announced acquisitions are increasing the pace of total sales growth

2 4 6 8 10 10,000 11,000 12,000 13,000 14,000 15,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2015 2016 2017 Net sales Organic sales growth, % Total sales growth, % MSEK %

Quarterly development 20151-2017 (RTM) Target and development The target is to grow operating result at a higher rate than sales growth through increased productivity and operational leverage  Operating result (EBITDA) increased by 15.5% (Jan-Mar 2017)  Productivity improvements, volume growth, and acquisitions impacted the result development positively  Contribution from the acquired businesses was in line with expectations

4 5 6 7 8 9 700 800 900 1,000 1,100 1,200 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2015 2016 2017 Operating result (EBITDA) Operating margin (EBITDA), % MSEK %

Quarterly development 2015-2017 (RTM) Target and development The target with present business mix is to keep net capex around 3% of net sales per year including Modern Medicine and expansion related capex  Net capital expenditures in % of net sales was 3.0% (RTM)  Net capital expenditures were in line with the target

1 2 3 4 5 100 200 300 400 500 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2015 2016 2017 Net capital expenditure In % of sales MSEK %

  • Organic sales growth in line with market growth in

all markets

  • Completed acquisitions are increasing the pace of

total sales growth

  • Productivity improvements, volume growth, and

acquisitions impacted the result development positively

  • Contribution from the acquired businesses was in

line with expectations

  • RTM net capital expenditures back on the target

level (3.0% of net sales)

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SLIDE 14

Capio AB (publ) 14

Financial calendar

  • Annual General Meeting 2017 on May 3, 2017 at

16:00 CET (Chalmers Kårhus, Gothenburg, Sweden)

  • Next financial report:

Interim report January – June 2017 due July 21, 2017

2017-05-03

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SLIDE 15

Capio AB (publ) 15

Questions and Answers

2017-05-03

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SLIDE 16

www.capio.com