Asklepios continues solid revenue growth

The Asklepios Group further increased its revenue in the first nine months of the 2018 financial year. Consolidated net income was down on the previous year owing to higher expenses in hospital operations. In light of this, Asklepios is increasingly focusing on establishing and developing new business areas along the value chain.

Asklepios increased its revenue by 4.6% to EUR 2,536.5 million in the first nine months of the financial year (9M 2017: EUR 2,425.7 million). The healthcare facilities of the Asklepios Group cared for 1,681,074 patients in total in the period from January to September 2018 (9M 2017: 1,684,196). Operating earnings before interest and taxes (EBIT) amounted to EUR 141.9 million (9M 2017: EUR 163.1 million) with a margin of 5.6% (9M 2017: 6.7%). Earnings before interest, taxes, depreciation and amortisation (EBITDA) were down on the previous year at EUR 252.9 million (9M 2017: EUR 270.9 million) with a margin of 10.0% (9M 2017: 11.2%). Earnings after taxes (EAT) amounted to EUR 98.8 million (9M 2017: EUR 123.5 million). As in the first half of the year, the development in earnings is due to a sustained increase in costs, in the area of staff in particular, and to the ongoing regulatory changes under the Krankenhausstrukturgesetz (KHSG – German Hospital Structure Act) and the fixed cost degression discount. In addition, cash flows were affected by changes in the MDK’s review process.

“Growth at Asklepios is both stable and sustainable. Our patients know that they can count on us for first-class medical care,” says Kai Hankeln, CEO of Asklepios. “At the same time, rising costs and regulatory intervention are weighing on revenue structures in hospital operations. We are therefore emphasising the development of new business areas with which we can better use our platform, offer our patients even more comprehensive services and generate additional revenue. We are striving for a sustainable earnings margin of 6.0% after taxes in the medium term.”

Asklepios is pursuing the expansion of a networked value chain with targeted investments. A key driver in this is digital offerings that cut costs and increase the variety of services available to patients. Asklepios is also planning to set up an open discharge management platform for more efficient cooperation with rehabilitation facilities, therapy and therapeutic appliance providers and health insurance companies in the medium term.

Asklepios increased its internally financed investment in hospitals and related business areas to EUR 125.9 million in the reporting period (9M 2017: EUR 110.4 million). The share of own funds in total investment was 66.3% in the third quarter of 2018 (9M 2017: 69.7%).

The financial position of the Asklepios Group remains stable. As at 30 September 2018, the Group had equity of EUR 1,415.2 million (31 December 2017: EUR 1,416.6 million), corresponding to an equity ratio of 34.9% (31 December 2017: 34.4%). Net liabilities amounted to EUR 912.9 million (31 December 2017: EUR 874.6 million). The ratio of net debt to EBITDA for the past 12 months therefore climbed to 2.4x (31 December 2017: 2.2x). Cash funds amounted to EUR 471.7 million (31 December 2017: EUR 612.3 million) and unused credit facilities to EUR 450.7 million as at the end of the reporting period (31 December 2017: EUR 461.1 million).

Hafid Rifi, CFO of Asklepios, said: “The financial situation at Asklepios is robust and dynamic. Thanks to our comfortable equity ratio and unutilised credit facilities, we are excellently equipped for further investment in growth – including strategic acquisitions along the entire value chain of our industry.”