Q2 2024 Medicover AB Earnings Call Transcript
Key Points
- Medicover AB (FRA:5M0B) reported a strong 20% top-line growth, with 16% being organic, showcasing robust performance across both divisions.
- The company achieved a 23% increase in cash generation, highlighting effective cash conversion and financial health.
- Operating profit increased by more than 60%, with a full percentage point of margin expansion, indicating strong operational leverage.
- Healthcare Services division saw over 20% growth, with a significant portion being organic, demonstrating successful strategic execution.
- Diagnostic Services reported an 18% revenue increase, with 16% organic growth, marking the strongest organic volume growth since before the pandemic.
- The company experienced a drag on margins due to new unit start-ups, particularly in the Bucharest hospital, contributing negatively to EBITDA.
- In India, revenue growth was softer at 6%, impacted by the sale and closure of smaller hospital units and IVF facilities.
- The German diagnostics sector faced challenges with no price adjustments, and the proposed price reform is expected to have a negligible impact.
- Integration costs from a recent acquisition in Berlin are currently dilutive, affecting the profitability of the diagnostics division.
- Inflationary pressures, particularly wage growth in Poland, continue to impact costs, necessitating ongoing price adjustments in private pay services.
So good morning, everyone. Welcome to our second-quarter 2024 report, and welcome to you all. Our summary slide and our headline continued strong organic growth and cash generation. I think this is a very good quarter. We had a good first-quarter in the year and we follow up with an equally strong and solid second-quarter.
You are used to us growing, but nevertheless, 20% top-line growth or which share it had over 16% organic is significant considering the size of the company and our base. Importantly, this is solid across both divisions and within the divisions across our different businesses, there's nothing individual that stands out. Poland has been strong for a long time. Poland remains strong, and we expect that continue going forward.
We had continued good member intake in our corporate business, and we equally had very strong laboratory test growth were actually back on pre pandemic organic volume growth levels in diagnostics, which I think is a surprise to some of you. And it's a very good sign again, that's
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