Asklepios Group: Stable development continues in H1 2022

Asklepios Kliniken GmbH & Co. KGaA has closed the first half of 2022 with a stable development of consolidated revenue and consolidated net operating income (EAT). Following the challenges resulting from the pandemic, the healthcare market is now facing new risks, in particularly from high inflation and rising energy costs.

From January to June 2022, Asklepios Kliniken treated a total of 1,749,734 patients (6M 2021: 1,447,999) in its healthcare facilities. This represents an increase in utilisation year-on-year, primarily due to an increase in outpatient treatments and the resumption of elective procedures. The number of cost weights in the first half of 2022 was 298,202 (6M 2021: 300,185). “After more than two years of the coronavirus pandemic, we are very pleased that more than 1.7 million patients placed their trust in us in the first half of 2022. This is also reflected in our stable revenue growth,” says Kai Hankeln, CEO of Asklepios Kliniken.

Asklepios Kliniken generated revenue of EUR 2,608.9 million in the first six months of 2022 (6M 2021: EUR 2,526.4 million). With a stable EBITDA margin of 9.2% (6M 2021: 9.2%), EBITDA increased to EUR 240.7 million (6M 2021: EUR 231.2 million). In the same period, Asklepios generated EBIT of EUR 81.0 million, corresponding to a margin of 3.1% (6M 2021: EUR 79.1 million or 3.1%). Consolidated net income (EAT) amounted to EUR 55.1 million and was thus above the previous year’s figure (6M 2021: EUR 43.0 million). This corresponds to an EAT margin of 2.1% (6M 2021: 1.7%).

The absolute cost of materials rose disproportionately to revenue by EUR 24.7 million, from EUR 608.8 million to EUR 633.5 million due to price increases for energy, fuels and medical supplies. As a result, the cost of materials ratio increased slightly to 24.3% (6M 2021: 24.1%) and was higher than the previous year’s high figure due to the pandemic. Absolute staff costs climbed by EUR 48.6 million or 2.9% to EUR 1,734.7 million, while the staff costs ratio fell slightly from 66.7% to 66.5%. Overall, the rise in absolute staff costs resulted from the 2.4% increase in the number of employees by full-time equivalents to 49,788 (6M 2021: 48,621) as well as from general wage increases. “In view of the acute inflation, it is urgently necessary to support hospitals that have been impacted by the pandemic in order to continue providing high-quality care in the future,” says Kai Hankeln, CEO of the Asklepios Group. “To ensure this, we need far-reaching structural reforms in addition to inflation compensation, which is necessary in the short term. Otherwise, we run the risk of catapulting Germany’s hospitals into a dangerous economic downward spiral.”

The Asklepios Group’s financial position was stable at the end of the first half of 2022. As at 30 June 2022, the Group’s net debt amounted to EUR 1,771.7 million (31 December 2021: EUR 1,794.9 million). Cash and cash equivalents amounted to EUR 614.9 million (31 December 2021: EUR 647.2 million). The ratio of net debt to EBITDA excluding the effects of the application of IFRS 16 Leases remains unchanged at 3.1x EBITDA for the past 12 months (31 December 2021: 3.1x).

Asklepios is consistently pursuing its investment strategy and continues to invest in its healthcare facilities and strategically important projects.  In the first half of 2022, Asklepios invested a total of EUR 118.9 million including subsidies (6M 2021: EUR 146.9 million). The share of own funds amounted to EUR 81.9 million (6M 2021: EUR 110.6 million) and thus around 68.9% (6M 2021: 75.6%) of total investments. Net cash flow from operating activities decreased to EUR 124.4 million in the first six months of 2022 (6M 2021: EUR 261.7 million). In view of the current challenges, the central warehouse in Bad Oldesloe, which will be completed in the first half of 2022, is of great importance. It will ensures supply security, features a high level of digitalisation and automation, and will lead to positive economies of scale in purchasing through access to international suppliers and central procurement.

The successful placement of a Schuldschein loan agreement marked an important step in recent months. “As a company with a long-term focus, we hedge against financial market risks at an early stage and ensure an optimal distribution of our maturities in order to further strengthen our financing profile. The Schuldschein loan agreement successfully placed at the beginning of July is an important milestone in this regard, enabling us to refinance ourselves at an early stage against the backdrop of geopolitical uncertainties and volatile capital markets,” explains Hafid Rifi, CFO of Asklepios Kliniken. “Our strong internal financing power today is the basis for tomorrow’s investments. In the future, we will continue to ensure that Asklepios remains a pioneer in the areas of digitalisation and outpatient treatment.”

In the further course of the financial year, Asklepios sees a possible adverse impact on business development from persistently high inflation and the uncertain energy supply situation. However, in addition to cost increases, regulatory decisions such as the structural reform of the hospital market will also have a significant impact. In view of the major economic challenges facing the entire healthcare system, Asklepios is urging rapid, unbureaucratic decisions to ease the burden on German hospitals.