DGAP-News: Asklepios Kliniken / Key word(s): Interim Report
Asklepios Kliniken posts sound development in operating business in first half of 2020 despite coronavirus
Hamburg, 27 August 2020. In the first half of 2020, Asklepios Kliniken GmbH & Co. KGaA felt the effects of the COVID-19 pandemic, but to a lesser extent than many other companies in the healthcare sector. Consolidated revenue increased year-on-year, whereas consolidated net income (EAT) declined under the influence of the pandemic. Despite the challenging circumstances, capital expenditure was kept at a consistently high level.
The Asklepios Group generated revenue of EUR 1,809.6 million in the first six months of 2020 (6M 2019: EUR 1,755.4 million), thus achieving revenue growth of 3.1%. This revenue growth was predominantly organic. It should also be emphasised that year-on-year growth of around EUR 5.0 million was generated with the new services in the Employee Assistance Programmes business segment. This resulted firstly from the initial consolidation of Fürstenberg Institut GmbH and Pulso Europe BV, and secondly from demand for psychological counselling for personal and professional problems, which we believe was driven by the coronavirus. The decline in EBITDA to EUR 172.6 million in the first six months of 2020 (6M 2019: EUR 174.8 million) is chiefly due to high staff costs. Despite the extraordinary challenges of the coronavirus pandemic, we have pressed ahead with increasing our full-time equivalents so as to ensure our contribution to supporting the healthcare system - including with regard to the still unforeseeable further development of the coronavirus. Overall, the EBITDA margin fell to 9.5% (6M 2019: 10.0%). The cost of materials ratio fell to 20.1% (6M 2019: 21.1%), whereas the staff costs ratio climbed to 67.1% (6M 2019: 66.5%). This was due to an increase in the average number of full-time equivalents by 604 to 36,533 (6M 2019: 35,929) as well as to higher average staff costs per full-time equivalent.
Consolidated net income (EAT) for the period from January to June amounted to EUR 21.8 million, considerably below the previous year's level (6M 2019: EUR 41.9 million). This corresponds to an EAT margin of 1.2% (6M 2019: 2.4%). EAT was significantly impacted by high staff costs, an increase in depreciation and amortisation, particularly due to digitalisation projects, and a decline in net investment income due to the coronavirus.
"The COVID-19 pandemic had a tight grip over hospitals in Germany from mid-March onwards. In this exceptional situation, Asklepios has made an important contribution to dealing with the health effects of the virus. As expected, the pandemic also had an impact on our earnings. However, so far Asklepios has got through the current financial year better than most other healthcare companies. This shows the effectiveness of modern privately owned hospital associations and hospitals, which particularly benefit from their synergies and efficiency advantages in exceptional situations like this," says Kai Hankeln, CEO of the Asklepios Group.
Despite the coronavirus, Asklepios is keeping to its important investment strategy and making consistently high investments in its healthcare facilities and strategically important projects, such as the new central warehouse in Bad Oldesloe. In the first half of 2020, the company's total investment including subsidies came to EUR 138.2 million (6M 2019: EUR 126.0 million). The share of own funds was EUR 103.6 million, equating to around 75.0% of the total investment (6M 2019: 73.9%). In the first six months of 2020, net cash flow from operating activities came to EUR 289.5 million (6M 2019: EUR 62.1 million).
The Asklepios Group's financial position was stable at the end of the first half of 2020, with its financial liabilities alone amounting to EUR 1,150.3 million as at 30 June 2020 (31 December 2019: EUR 1,119.1 million). Cash and cash equivalents increased to EUR 411.6 million (31 December 2019: EUR 265.0 million). The ratio of net debt to EBITDA for the past 12 months was accordingly 2.9x (31 December 2019: 2.8x).
"We are also focusing on stable internal financing. Cash flow has increased due to the shortening of the statutory health insurance funds' payment term and particularly due to an improvement in receivables management," explains Hafid Rifi, CFO of the Asklepios Group. "In the second half of the financial year, we will still keep track of the effects of the COVID-19 pandemic on our financing. But regardless of this, we will continue along our chosen path, vigorously drive forward the partnership with RHÖN-KLINIKUM AG and jointly implement strategic focus areas such as the digitalisation of healthcare."
Shortly after the end of the first half of 2020, the extended acceptance period for the voluntary public takeover offer to the shareholders of RHÖN-KLINIKUM AG came to an end. By 6 July 2020, Asklepios' takeover offer at a price of EUR 18.00 in cash per RHÖN share had been accepted for a total of 28,464,866 shares. This meant that Asklepios now held around 84.66% of the voting rights in total. The company contributed these shares to the joint venture with RHÖN founder Eugen Münch. Münch himself has contributed another roughly 7.61% of the RHÖN shares to the joint venture via HCM SE, which he controls. Following the completion of the transaction, the joint venture holds 92.27% of the voting rights. Clearance for the voluntary public takeover offer and the planned bundling of the shares had already been granted by the German Federal Cartel Office at the end of May without any additional requirements or conditions. After this transaction, another 0.79% of the shares in RHÖN-KLINIKUM AG were acquired off-market, causing the share of voting rights held by Asklepios Kliniken GmbH & Co. KGaA together with its holding company to rise to 93.38%.
Asklepios Kliniken is one of the leading private operators of hospitals and healthcare facilities in Germany. The hospital group stands for highly qualified care for its patients, with a clear commitment to medical quality, innovation and social responsibility. On this basis, Asklepios has grown dynamically since it was founded almost 35 years ago. The Group currently has around 160 healthcare facilities throughout Germany, including acute care hospitals for all levels of care, specialist clinics, psychiatric and forensic facilities, rehabilitation clinics, nursing homes and medical service centres. In the 2019 financial year, 2.5 million patients were treated at the Asklepios Group's facilities. The company has more than 49,000 employees.