Asklepios: An eventful 2017 financial year with sustained development

In the 2017 financial year, Asklepios Kliniken continued the sustained development achieved in previous years. In addition to completing Group restructuring under corporate law, the financial year was defined by the placement of the schuldschein loan agreement in November 2017 with a volume of EUR 780 million. The Asklepios Group’s health care facilities treated a total of 2,282,421 patients in 2017 (2016: 2,279,477).

The Group’s revenues amounted to EUR 3,261.9 million in the 2017 financial year (2016: EUR 3,211.2 million). This growth was predominantly organic. EBITDA was sustainably increased to EUR 396.4 million and was up on the previous year (2016: EUR 390.4 million). At 12.2%, the EBITDA margin was at the level of the previous year (2016: 12.2%). In the reporting period, consolidated net profit increased from EUR 192.1 million to EUR 194.1 million. At 6.0% the return on sales in the 2017 financial year was at the same level as the previous year. The number of full-time equivalents increased by 0.6% to 35,097 in the financial year (2016: 34,887 full-time equivalents). At the same time, Asklepios increased its healthcare facilities in the past year to EUR 275.7 million in total (2016: EUR 273.5 million) – including around EUR 195.6 million from own funds (2016: EUR 174.0 million). Thus, its share increased to 70.9% (2016: 63.6%).

“In 2017, we continued the sustained development of our company while at the same time taking a big step forward structurally,” said Kai Hankeln, CEO. “The new structure allows more efficient management at Group level and better financing terms for our healthcare and hospital activities. In the medium and long term, we intend to better address our claim of excellent healthcare.”

Stable financial structure as a key part of our Group strategy

By way of the Group’s restructuring,  since 1 January 2017 Broermann Holding GmbH (formerly: Asklepios Kliniken GmbH) no longer acts as the Group management company of the Asklepios Group. Rather this role has been assumed by its wholly owned subsidiary Asklepios Kliniken GmbH & Co. KGaA.

This step also standardised and consolidated the financial structure at Asklepios Kliniken. The central measure was the debt pushdown of the schuldschein loan agreements from 2013 and 2015 and the syndicated loan from 2015. Asklepios Kliniken placed a schuldschein loan agreement of EUR 780 million in November 2017. The schuldschein loan agreement is part of the Asklepios Group’s long-term financial strategy geared in particular towards the sustainable financing of hospital operations and a continuous improvement of financing conditions.

“In the past year, we succeeded in making our financial structure even more sustainable, thus making the best possible use of the attractive interest rate environment for our long-term planning horizon. Our good equity ratio allows for high investments from own funds – in our healthcare facilities and in our future-orientated and sustainable buy and hold strategy,” said CFO Hafid Rifi.

As a conservative company in terms of finance, the Group’s financing structure remains long-term in nature. Equity amounted to EUR 1,416.6 million as at 31 December 2017 (previous year:EUR 1,273.4 million). Thus, Asklepios has an equity share of 34.4% (2016: 36.8%). Total assets increased from EUR 3,460.8 million in the previous year to EUR 4,113.0 million as a result of the schuldschein. The debt ratio came to 2.2 times EBITDA (2016: 1.3 times). Net debt as at the end of the reporting period amounted to EUR 874.6 million (2016: EUR 524.3 million).

Outlook

“An outstanding future is not based on economic success alone. To fulfil our orientation on a lasting basis, we need to focus on the key future issues of our healthcare system. These include identifying and using the opportunities of digitisation, actively tackling the challenges such as the shortage of specialist nursing staff, and developing solutions. We aim to be proactive in addressing and shaping the changes in healthcare,” said CEO Dr Thomas Wolfram.

Asklepios is anticipating a stable year-on-year development in the number of patients for the 2018 financial year. Organic revenue growth will be between 1.5% and 2.0%. The company also expects a slight but sustained increase in both EBITDA and the equity ratio year-on-year.