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• Organic Revenue Growth: 17.4% in the third quarter.

• Operating Cash Flow: EUR 240.2 million, up 18% year-over-year.

• Total Revenue Growth: 19.8% overall growth.

• Poland Revenue Growth: 25% increase, now representing 50% of total revenue.

• Adjusted EBITAaL: EUR 48.5 million, up from EUR 41.9 million, with a 16% growth.

• Healthcare Services Organic Growth: 18.3%, with 9% from price and 9% from volume.

• Diagnostic Services Organic Growth: 15.3%, with 4% from price and 11% from volume.

• Impairment Charge: EUR 16.4 million on Nordic fertility and German dental businesses.

• Free Recurring Cash Flow: EUR 34.8 million, up 35% for the quarter.

• Leverage Ratio: Reduced to 3.1 from 3.3.

• Warning! GuruFocus has detected 8 Warning Signs with FRA:5M0B.

Release Date: October 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Medicover AB (FRA:5M0B) reported a strong third quarter with organic revenue growth of 17.4%, driven by both divisions.

• Operating cash flow reached EUR 240.2 million, marking an 18% increase compared to the same period last year and the strongest quarter ever on a rolling 12-month basis.

• Healthcare services division showed impressive organic growth of 18.3%, with a balanced contribution from price and volume increases.

• Diagnostic services experienced solid growth with a 15.5% increase, driven by a strong test mix and volume growth.

• The company is on track to meet its financial targets for 2025, with a current revenue run rate of EUR 2.1 billion, indicating strong future performance.

Negative Points

• Medicover AB recorded an impairment charge of EUR 16.4 million related to its Nordic fertility businesses and German dental activities, impacting net profit.

• The company faces challenges in Germany due to stable pricing amidst cost inflation, although efforts are being made to mitigate these impacts.

• New hospital units in India contributed a negative EUR 5 million to EBITDAaL, affecting overall group margins.

• The competitive landscape in India remains challenging, with significant local competition for resources and capacity.

• Despite strong growth, the employment market in Poland presents a mixed picture, with high minimum wage growth impacting employers' hiring decisions.

Q & A Highlights

Q: Could you remind us of the share of the total installed bed capacity of the six units you mentioned, and when do you expect these units to reach lease-adjusted EBITDA breakeven? A: We don't specify exact quarters for when startup units will become positive, but two of the six units turned positive within two years, which is promising. Typically, we expect this within three years in India. The six units combined have a capacity of around 1,000 beds, representing about 20% of our total installed capacity in India.