2015-11-16 07:30:00 CET
2015-11-16 07:30:37 CET
REGULATED INFORMATION
Pihlajalinna Oyj - Interim report (Q1 and Q3)
Pihlajalinna Oyj : INTERIM REPORT 1 JANUARY-30 SEPTEMBER 2015 (9 months)
PIHLAJALINNA INTERIM REPORT 16 November 2015 at 8:30
PIHLAJALINNA: INTERIM REPORT 1 JANUARY-30 SEPTEMBER 2015 (9 months)
STRONG REVENUE GROWTH CONTINUED, INVESTMENTS IN GROWTH AFFECTED THE RESULT
BRIEF LOOK AT JULY-SEPTEMBER (Q3/2014 FIGURES IN BRACKETS):
* Revenues amounted to EUR 50.9(32.6) million - an increase of 56 per cent
* EBITDA excluding non-recurring items amounted to EUR 2.9 (3.8) million
* Operating profit excluding non-recurring items amounted to EUR 0.9 (2.3)
million
* Operating profit (EBIT) amounted to EUR 1.0 (1.1) million
* Net cash flow from operating activities amounted to EUR 1.1 (0.1) million
* The provision of healthcare and social care services in Jämsä started on 1
September 2015
BRIEF LOOK AT JANUARY-SEPTEMBER:
* Revenues amounted to EUR 150.7(96.9) million - an increase of 56 per cent
* EBITDA excluding non-recurring items amounted to EUR 9.0 (10.5) million.
* Operating profit excluding non-recurring items amounted to EUR 3.2 (6.2)
million
* Net cash flow from operating activities amounted to EUR 10.6 (4.4) million
* Gross investments in the reporting period amounted to EUR 17.1 (21.8)
million
* Number of personnel at the end of the reporting period 2,905 (1,688)
* Earnings per share EUR -0.01 (0.05)
7-9/ 7-9/ 1-9/ 1-9/
KEY FIGURES AND RATIOS 2015 2014 change% 2015 2014 change% 2014
3 mths 3 mths 9 mths 9 mths 12 mths
INCOME STATEMENT
Revenue, EUR million 50.9 32.6 56 150.7 96.9 56 148.9
EBITDA excluding non-
recurring items, EUR million 2.9 3.8 -22 9.0 10.5 -14 14.0
EBITDA % excluding non-
recurring items 5.8 11.7 -50 6.0 10.8 -44 9.4
EBITDA, EUR million 3.1 2.6 17 8.2 8.8 -8 11.8
EBITDA % 6.0 8.0 -25 5.4 9.1 -41 7.9
Operating profit excluding
non-recurring items (EBIT),
EUR million 0.9 2.3 -63 3.2 6.2 -49 8.2
Operating profit % excluding
non-recurring items 1.7 7.1 -76 2.1 6.4 -67 5.5
Operating profit (EBIT), EUR
million 1.0 1.1 -14 2.3 4.6 -50 6.0
Operating profit % 1.9 3.4 -45 1.5 4.7 -68 4.0
Profit before tax (EBT), EUR
million 0.4 0.2 78 0.3 2.1 -86 2.9
SHARE RELATED INFORMATION
Earnings per share (EPS),
EUR 0.01 -0.03 -139 -0.01 0.05 -125 0.11
Equity per share, EUR 3.48 0.64 447 0.70
OTHER INFORMATION
Return on capital employed
(ROCE), % 3.1 7.3 7.1
Return on equity, % (ROE) 1.6 7.7 7.7
Equity ratio, % 43.0 8.3 8.0
Gearing, % 42.2 737.6 691.1
Net debt / adjusted EBITDA,
rolling 12 mths 2.3 5.4 5.1
Interest bearing net debt,
EUR million 28.6 72.8 -61 71.6
Gross investments, EUR
million 1.1 8.8 -87 17.1 21.8 -22 28.3
Cash flow from operating
activities 1.1 0.1 865 10.6 4.4 141 9.4
Cash flow after investments -2.2 -6.1 -64 -1.2 -10.0 -88 -8.1
Average number of personnel 2,363 1,574 50 1,619
Personnel at the end of the
period 2,905 1,688 72 1,714
Mikko Wirén, CEO of Pihlajalinna:
Pihlajalinna Group's strong growth continued during the third quarter. Our
revenue grew by 56 per cent reaching EUR 50.9 (32.6) million. The majority of
this was due to organic growth, such as the complete healthcare and social care
outsourcings in Parkano (since 1 January 2015), Kihniö (since 1 May 2015) and
Jämsä (since 1 September 2015). Investments in the strengthening of
administration and the support functions required by future growth affected
profitability. The transfer of the healthcare and social care services of the
Kuusiokunnat sub-region to Kuusiolinna Terveys Oy, a joint venture of the sub-
region and Pihlajalinna, in line with the complete outsourcing agreement (as of
1 January 2016) and the taking over of the entire specialised care services in
Jämsä (as of 1 January 2016) continued to cause considerable expenses during the
reporting period.
Our January-September revenue grew by 56 per cent reaching EUR 150.7 (96.9)
million. The reinforcement of the Group's administration and supporting
functions affected our profitability. In the complete healthcare and social care
outsourcings, the electronic ERP system was expanded to cover the patient
referral flow of specialised care services. This ensures rapid, high-quality
services and the increasingly cost-effective provision of specialised care
services. Low capacity utilisation rates in the new units, which burdened the
Group's bottom line during the first half of the year, developed favourably
towards the end of the reporting period, and I am pleased with the capacity
utilisation rates achieved since the end of Q3.
The implementation of the Group restructuring announced in connection with our
previous interim report and the related cost savings plan has proceeded as
planned. We expect most probably to reach the targeted annual cost savings level
of EUR 3 million during 2016.
Pihlajalinna Group signed a new five-year EUR 60 million revolving credit
facility with two of its core banks. This new financing agreement considerably
increases flexibility in areas such as M&A transactions. The Group is actively
looking for opportunities to expand operations via M&A according to its
strategy.
In October 2015, Pihlajalinna expanded into asylum seeker reception centre
operations by opening four reception centres (Hämeenlinna, Kokemäki, Kihniö and
Jämsä) in areas where we had either existing vacant premises or major healthcare
and social care resources. Pihlajalinna plans to open a new reception centre in
the Karkku area of Sastamala in November 2015. Expansion of the Pihlajalinna
business operations into asylum seeker reception centre operations will benefit
from significant synergies with the company's current social services
production.
The preliminary results of the SYKKI study (the growth and internationalisation
project of a Finnish healthcare and social care services company), carried out
by the National Institute for Health and Welfare (THL) were completed in
September. The study compared the effect of the complete outsourcing of
healthcare and social care services in the town of Mänttä-Vilppula (to a joint
venture between the town and Pihlajalinna) with 16 other municipalities. The
study indicated cost savings of 12.1-13.3 per cent in Mänttä-Vilppula as opposed
to the comparison municipalities after only 12 months of operational
development. Pihlajalinna is the market leader in complete healthcare and social
care outsourcings and it is delightful to see that an external independent body
has now verified the benefits of complete outsourcing to individual
municipalities, citizens, patients and society.
After the end of the reporting period, in October 2015 Pihlajalinna joined the
Association for Private Healthcare Services. This decision was welcomed by both
employee and employer organisations. Membership provides Pihlajalinna with the
opportunity to participate in and influence negotiations between the various
organisations.
On 9 November, the Finnish Government published more information about its
policies on the reform package on healthcare, social welfare and autonomous
regions, and on how the regions will be divided. We regard increased freedom of
choice for customers as a major reform, enabling operations to be made more
agile, customer-oriented and responsive to patient needs. I believe that if it
is implemented as planned the freedom of choice can have a positive impact on
Pihlajalinna's business operations on the long term. The government policy of
the freedom of choice will mainly be implemented in the basic healthcare service
level and where appropriate in specialized healthcare and social services. Also
the division of responsibility of organizing and producing of services in the
autonomous regions enables genuine comparison of quality and access to services
between various service providers.
Pihlajalinna's operating model for healthcare and social care services is
already in line with best practices in the sector. We provide basic healthcare
and social care services efficiently and hence save on the expensive resources
of specialised care services. In addition to Mänttä-Vilppula, Omapihlaja health
centers are another example of fast and efficient service model. Tampere city
outsourced the health centre services of 11 000 inhabitants to Pihlajalinna in
2007. When in 2011 it became possible to use the city health centre of one's
choosing the amount of customers in Omapihlaja has more than doubled.
Pihlajalinna Oyj will monitor the preparation of the new Act on the Organisation
of Social and Health Services and investigate its practical impact.
GUIDANCE ON GROUP OUTLOOK
Pihlajalinna's guidance is unchanged: Pihlajalinna's consolidated revenue is
expected to exceed EUR 200 million in 2015.
PRESS AND ANALYST MEETING
The press and analyst meeting for the announcement of financial results of the
third quarter of 2015 will be held on November 16, 2015 at 10:00 in the Kämp
hotel congress centre, meeting room Paavo Nurmi, Pohjoisesplanadi 29, 00100,
Helsinki.
An audio webcast and teleconference in English will be held on the same day
starting at 13.00 p.m. EET. +44 20 3059 8125. Participant password:
Pihlajalinna. The event can be followed live as an audio webcast at
investors.pihlajalinna-konserni.fi.
The event can be followed live as an audio webcast at investors.pihlajalinna-
konserni.fi. The event will be recorded and can be accessed on the website later
on the same day.
FINANCIAL REPORTING IN 2016
Pihlajalinna will publish its financial information in 2016 as follows:
Report, publication date
Financial statements release 2015, Thursday 18 February 2016
Interim report January-March 2016, Tuesday 10 May 2016
Interim report January-June 2016, Wednesday 17 August 2016
Interim report January-September 2016, Friday 11 November 2016
The online annual report including financial statements 2015 and the Board of
Director's report will be available on the company website www.pihlajalinna-
konserni.fi during week 11, 2016 at the latest.
Pihlajalinna's Annual General Meeting is scheduled for Monday, April 4, 2016 at
3.00 p.m., in Tampere, Finland. Pihlajalinna's Board of Directors will convene
the AGM at a later date.
Helsinki, 16 November 2015
Pihlajalinna Oyj's Board of Directors
FURTHER INFORMATION
Mikko Wirén, CEO, tel. +358 50 3220 927
Virpi Holmqvist, CFO, tel. +358 40 537 6133
Terhi Kivinen, SVP Communications, Marketing and IR, tel. +358 40 848 4001
DISTRIBUTION
NASDAQ OMX Helsinki
Major media
www.pihlajalinna-konserni.fi
Pihlajalinna in brief
Pihlajalinna is one of the leading private social and healthcare services
providers in Finland. The Company provides social and healthcare services for
households, companies, insurance companies and public sector entities in private
clinics, health centres, dental clinics and hospitals around Finland.
Pihlajalinna provides general practitioner and specialised care services,
including emergency and on-call services, a wide range of surgical services as
well as occupational healthcare and dental care services, in private clinics and
hospitals operating under the Dextra brand. Under the Pihlajalinna brand the
Company, in cooperation with the public sector, offers social and healthcare
service provision models to public sector entities with the aim of providing
high quality services for public pay healthcare customers.
[HUG#1966747]
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