Global Health Partner Q3 2012 presentation

1. GLOBAL HEALTH PARTNER
Q3 REPORT
2 NOVEMBER, 2012
Marianne Dicander Alexandersson, CEO
Tobias Linebäck, CFO

2. Agenda
Q3 performance
Market trends and opportunities
Focus going forward
Actions taken so far
Figures and graphs
Financial summary
2

3. Disappointing performance in Q3
• Disappointing growth and profitability
• 7 percent growth
• EBIT -13 MSEK (-12) (accumulated EBITDA 12,3 MSEK)
• Effects from lost contracts with county councils
• Continued tough market situation in Sweden and Denmark
with intense competition and depressed prices
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4. Market trends and opportunities in Sweden
• Strong political focus on profits
POLITICS/MEDIA
• Quality, openness and long-term perspective
• Increasing patient power
PATIENT TRENDS
• Patient free choice and insurance companies
• High focus on price
PUBLIC TENDERS/
• NKI, New Karolinska, opportunities for
FREE CHOICE SYSTEM
elective care
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5. Continued price pressure and consolidation in Denmark
• Prolonged care guarantee will increase
POLITICS/MEDIA
waiting times
• Consolidation and squeeze out of smaller
MARKET TRENDS providers
• Price pressure from insurance companies
• Accreditation requirement increases barriers
QUALITY TRENDS
of entrance
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6. Revenues from insurance companies growing Private
Insurance companies
in importance County councils
Revenue distribution
100%
90% 20 17 18 16
21
80%
16 17 20 21
70% 31
60%
50%
40%
30% 63 63 63 61
53
20%
10%
0%
2009 2010 2011 2011 Jan-Sept 2012 Jan-Sept
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7. Greater focus will increase profitability
FROM… …TO
Focus on
• Growth in selected • Growth in Nordic region
markets
• Core business
Process
More
Improve-
patients
ment
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8. Actions taken so far
Focus only on core business, where we can add value
• Closure of Bariatric Center Copenhagen (Q2)
• Sale of Bodylift center (Q3)
• Sale of Nacka property (Q3)
Focus on growth in the Nordic region
• Acquisition of Odenplan (Q4)
• Sale of Cairo (Q4)
• Opening of Orthocenter Skåne in Malmö (Q4)
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9. Continued challenging market Q3
SEK millions
Revenue
• 7 percent growth - revenue increased from 129 to 138
• 6 percent accumulated growth – revenue increased from
488 to 518
• 11 percent growth in Q3 from Danish acquisition
• Also growth from areas where there is high patient power 129 138
• Negative organic growth due to
• Lost VGR contracts
• Continued high competition and price pressure
• Increasingly strong positions with insurance companies, 2011 2012
provides a solid base for future positioning in the market
place
Revenue rolling 12 months 800 689 704
700 666
559 624
600 675 696
• Rolling 12 months continue to increase and now amounts 500 646
544 586
to SEK 704 million 400
300
• The acquisition of Gildhöj constituted the growth 200
100
for the third quarter 0
Kv2 Kv3 Kv4 Kv1 Kv2 Kv3 Kv4 Kv1 Kv 2 Kv 3
2010 2010 2010 2011 2011 2011 2011 2012 2012 2012
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10. Weak performance – Q3 Q3
SEK millions
EBITA EBITA
• Weak performance where especially SL Ortho/Spine is
underperforming
• One-off items of net +2,9 MSEK has affected the EBITA -12 -13
• Good performance in the Bariatric Service Line
• Cost savings and volumes from VGR are paying off
• Gastro is performing well overall
• Adverse effects from continued hard price competition in tenders
and effects from lost contract with VGR 2011 2012
• Average prices per procedure have in many cases decreased EBITDA
with 20–30% during the last 5 years 57 56
60 49 50
• Actual price decrease 42
50 38
• Changed patient mix 40
• Efficiency has increased but not enough to 30 24 23
30 31
meet the significant price drops 20
• Continued measures are taken to adjust capacity 10
and costs and efficiency 0
• EBITDA for Q3 amounted to -4,9 which reduced the rolling 12 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
EBITDA to 23. 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012
10

11. Service Line Ortho/Spine
• Very strong provider of orthopaedic and spine treatments in Sweden
• Organic growth only in clinic in Stockholm subject to free choice
• Lost VGR contracts affect profitability
• Challenge is to fully meet the heavy price reductions through increased efficiency
• Price reductions in Denmark following tenders by insurance companies
• Results below are affected by allocated segment costs amounting to -2.1 million in Q3
Full-
Q3 Q3 Change 9 months 9 months Change year
SEK millions 2012 2011 % 2012 2011 % 2011
Revenue 81.0 73.1 11 319.0 265.9 20 379.6
Operating profit* -9.4 0.3 6.1 28.5 35.3
Operating margin, % -12 0 2.0 11.0 9
* Excluding goodwill write-down of 7 MSEK in OPA in Q3 2012
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12. Service Line Dental
• Maintained revenue despite continued decline in market for dental implants. Market
is believed to have stabilized
• Reduced profitability due to less good patient mix
• Also changed dynamics between referral dentists and specialists
• Results below are effected by allocated segment costs amounting to 0 million in Q3
Q3 Q3 Change 9 months 9 months Change Full-year
SEK millions 2012 2011 % 2012 2011 % 2011
Revenue 14.5 14.7 -1.0 66.6 64.5 3.0 92.3
Operating profit* -1.1 -0.4 5.0 4.6 6.5
Operating margin, % -8.0 -3.0 8.0 7.0 7.0
* Excluding profit from sale of property in Q3 and write down of goodwill in full year 2011 and Q3 2012
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13. Service Line Bariatrics
• Heavy cost cuts and volumes from VGR are starting to pay off
• Gastro clinic in Stockholm is growing and performing well
• Market is still very tough and is characterized by high price pressure
• During Q2 and Q3, efforts to focus business around core areas have begun
• Bariatrics clinic in Copenhagen was closed during Q2
• Reconstructive plastic surgery clinic was sold during Q3
• Bariatrics clinic in Cairo was sold during Q4
• Results below are affected by allocated segment costs amounting to -2.9 million in Q3
Q3 Q3 Change 9 months 9 months Change Full-year
SEK millions 2012 2011 % 2012 2011 % 2011
Revenue 36.0 35.5 1 110.5 136.7 -19 174.7
Operating profit* -3.0 -5.2 -10.9 -2.0 -0.2
Operating margin, % -8 -15 -10 -1.0 0
* Including one-off costs of 1,3 MSEK in Q3 and -4.6 in 9 months
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14. Service Line Arrhythmia
• Solid growth and profitability
• Relatively stable future patient flow is expected
• Results below are effected by allocated segment costs amounting to -0.4 million in Q3
Q3 Q3 Change 9 months 9 months Change Full-year
SEK millions 2012 2011 % 2012 2011 % 2011
Revenue 6.3 5.8 9 21.4 21.3 0 28.6
Operating profit 0.1 0.2 1.9 2.9 2.8
Operating margin, % 2 3 9 14 10
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15. Q3 2011
Positive cash flow due to sale of property – Q3 Q3 2012
SEK millions
Comments
• Weak operating cash flow in the third
20
quarter due to weak performance
and some one-off costs 10
0
• Cash flow from investing activities -10
mainly consists of investments in health
-20
care equipment and sale of property
-30
in Nacka
-40
• Cash flow from financing activities Operations Investments Financing Total cash
flow
include new loans as well as some
loan repayments
• Total cash flow is positive in Q3 due to
sale of property.
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16. Financial summary
• Company working hard to change trend with falling EBITDA
• Falling EBITDA has resulted in a break of one of the bank covenants. However, the bank
has issued a waiver
• Net debt under control, SEK 86 million in relation to e.g., turnover of SEK 704 million
• Sale of property has released funds of 29 MSEK for use in GHPs core business
• Weaker performance and increased focus on core business have caused one-off costs
• Goodwill write-down of Nacka and OPA due to sale and lease back of real estate
and volume drop, however not effecting cash
• Other write-downs and reserves amounting to -4.5 MSEK
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17. APPENDIX
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18. Performance per geographic area – Q3
SEK millions
Q3 Q2 9 months 9 months
2012 2011 2012 2011
Revenue from business activities 103.4 101.8 408.6 420.4
SWEDEN
Operating result from business activities -9.2 -5.5 -2.0 19.9
Revenue from business activities 30.5 19.5 95.8 43.2
NORDIC
REGION
Operating result from business activities -3.7 -6.6 -15.7 -8.1
Revenue from business activities 3.9 7.8 13.1 24.8
OTHER
COUNTRIES
Operating result from business activities -0.1 0.4 4.2 -0.1
Reported operating result* -13.0 -11.7 -13.5 11.7
Comments
• All business development costs are included in the Swedish segment
* All numbers excl. goodwill write downs
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19. Reduced margins in mature business – Q3
SEK millions
Q3 Q3 9 months 9 months
2012 2011 2012 2011
Revenue 131.2 119.2 492.7 449.9
MATURE BUSINESS
Operating result 1.1 2.3 28.6 46.8
NEWLY OPENED Revenue 6.6 9.9 24.8 38.5
AND DEVELOPMENT
Operating result -14.1 -14.0 -42.1 -35.1
Reported revenue 137.8 129.1 517.5 488.4
Reported operating result* -13.0 -11.7 -13.5 11.7
Comments
• Mature clinics are clinics that have been in operation for at least 24 months
• Central administration costs for the Group are included in the mature business
• Central expansion and project costs are included in the Newly opened and development business
* All numbers excluding goodwill write downs
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20. Financial key data – Q3
SEK millions
Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2
2012 2012 2012 2011 2011 2011 2011 2010 2010 2010 2010 2009 2009 2009
Total cash 88 83 75 98 95 121 139 137 133 145 152 163 155 190
Shareholders equity incl.
340 395 403 409 439 451 455 475 515 522 514 513 511 550
minority
Long term debt 234 230 247 236 252 262 263 253 131 134 129 136 115 119
Net cash position -86 -83 -102 -58 -66 -11 7 14 9 20 33 36 23 62
Equity ratio 47 50% 50 % 54% 54% 55% 54% 54% 68% 67% 69% 68% 67% 69%
Net debt / EBITDA rolling 12 3.4 3.43 2,7 1.4 1.3 0.19 n/a n/a n/a n/a n/a n/a n/a n/a
Int bearing debt / EBITDA
7.6 7.2 4,9 3.8 3.2 2.4 2.4 2.5 4.0 6.1 11.7 16.8 11.6 28.9
rolling 12
Int bearing debt / adjusted
7.3 7.2 4,9 3.8 3.2 2.4 2.4 2.5 2.9 3.9 5.5 6.7 9.9 10.9
EBITDA rolling 12
EPS -0.81 -0.12 -0.05 -0.46 -0.19 0.09 0.04 0.13 -0.07 0.09 -0.01 -0.19 -0.19 -0.01
Basic cash flow from
operating activities per -0.41 0.35 -0.12 0.17 -0.27 0.19 0.00 0.38 -0.07 0.08 0.03 0.32 -0.32 0.05
share
Shareholders equity per
5.09 5.96 6,08 6.18 6.65 6.83 6.84 6.81 7.41 7.53 7.44 7.45 7.55 7.8
share, SEK
Number of employees 382 382 355 372 364 360 367 324 306 302 297 288 281 282
Revenue per employee 0.36 0.49 0.54 0.50 0.35 0.50 0.49 0.55 0.36 0.52 0.47 0.52 0.33 0.47
Note: The equity ratio has been re-calculated from the period Q4 2010 and onwards as a result of the change in accounting for put options.
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21. www.globalhealthpartner.com
Twitter: @ghpartner
Contact:
Marianne Dicander Alexandersson, CEO, +46 (0)705-62 85 55 marianne.dicander@ghpartner.com
Tobias Linebäck, CFO and IR, +46 (0)708-55 37 19, tobias.lineback@ghpartner.com
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