26th April, 2018

Above-average investment rates

Above-average investment rates

Schoen Clinic Group has further increased its total output by 2.7 per cent to EUR 818.4 million over the past financial year, despite increased regulatory restrictions on health services.

Measured in terms of total output, the investment ratio (incl. service and maintenance) stands at 14.6% (2016: 8.1%). Through this, Schoen Clinic is achieving above-average standards in its German hospital branches and across the history of the company. Earnings before interest, taxes and depreciation (EBITDA) amount to EUR 102.2 million, with the relevant equity ratio for bonds issued in 2014 standing at 38.8%.

Profit and loss statement

In its core business and hospital services, including changes in inventory, Schoen Clinic has been able to achieve stronger growth than in the total output and increased by 4.4% to EUR 702.2 million. The profitability of Schoen Clinic was shaped overall by the current expansion and conversion of the company and regulatory changes (fixed costs reduction, catalogue devaluations). “We have had strong growth in the past year. At Schoen Clinic, we have not just become more digital and international, but our treatment concepts have now spread to the metropolitan region of Rhine-Ruhr, Germany’s biggest area,” explains Dr Markus Hamm, CEO, Chairman and Managing Director of Schön Klinik SE.

One-off effects from the acquisition of the hospital operations in Düsseldorf, the start-up costs for the opening of Schoen Clinic London (planned for summer 2018) as well as changes in consolidation have led to somewhat higher personnel and non-personnel expenses. The personnel expenses ratio stands at 60.9% (2016: 56.9%). This increase has resulted from the personnel expenses from the additional Schoen Clinic Düsseldorf, among other things, which still does not conflict with the total output in the required amount. Increases in output at other hospitals, with an equally low increase in personnel and non-personnel expenses, were able to partially offset this development. The operating expenses ratio increased to 29.1% (2016: 27.5%).

In the reporting year, Schön Klinik Verwaltung GmbH merged with Schön Holding SE & Co. KG. As a result, the expenses previously covered by dividends were transferred to the Group, with a negative impact on profit. The earnings before interest and taxes (EBIT) of the Group stood at EUR 11.9 million (2016: EUR 46.7 million). Around half of this decrease was caused by this merger. The earnings before interest, taxes and depreciation (EBITDA) are EUR 102.2 million.

“In 2017, we were not able to achieve all the goals we had set. Because of this, we have reorganised medical treatment fields in several hospitals and areas. Through measures already being implemented, we are driving growth and will better absorb the impact of external factors,” Hamm explains.

Reaction to increased regulations in Germany

As a hospital group with a focus on musculoskeletal disorders, the regulatory changes in 2017 have a particularly strong impact on earnings. “Regulations such as the fixed cost reduction have encouraged us to broaden the scope of the company through internationalisation,” Hamm continues. Last year, Schoen Clinic had just taken over the Newbridge House for Eating Disorders. The hospital in Birmingham is the second-largest acute inpatient facility in the English health system for eating disorders in children and teenagers. Furthermore, Schoen Clinic London will be put into operation this summer, with a particularly specialised and high-quality range of orthopaedic and spinal treatments.

Balance

The balance sheet ratios have developed positively over the previous financial year. The balance sum of the Schoen Clinic Group stood at EUR 1,758.5 million on 31 December 2017 - 1.2% less than the previous year. The share of fixed assets increased slightly over the financial year, from 83.7% to 87.0%.

Investments in tangible assets without deduction of subsidies or expenses for service and maintenance for tangible assets were EUR 102.3 million or EUR 17.2 million in the financial year. The investment ratio measured in terms of total output, including service and maintenance, stood at 14.6% (2016: 8.1%) - an above-average value in terms of the history of the company and hospital branches in Germany.

In 2017, Schoen Clinic continued its investment programme for the “operating theatre of the future” to increase patient safety and employee satisfaction. In the financial year, the decision was made to expand the operating theatres available in Schoen Clinic München Harlaching with expenses in the amount of EUR 23 million. The extension at Schoen Clinic Bad Aibling Harthausen and the new construction of operating theatres at Schoen Clinic Hamburg Eilbek are currently ongoing.

Schoen Clinic also made significant investments in digital products in the previous year. Since December last year, Schoen Clinic has converted its 30 years of experience in psychosomatics, for example, to digital. “MindDoc” online therapy provides patients with eating disorders, depression or burnout with fully outpatient treatment via an encrypted treatment platform and video chat.

Contact:

Sascha Röber, Head of Financial Management

+49 8051 695-475

About Schoen Clinic

The largest family-run hospital group in Germany treats all patients, whether they have statutory or private insurance. Since its foundation by the Schoen family in 1985, the company has achieved quality and excellence through specialisation. Its medical focal points include psychosomatics, orthopaedics, neurology, surgery and internal medicine. At currently 23 locations in Bavaria, Hamburg, Hesse, North Rhine-Westphalia, Schleswig Holstein and the United Kingdom, 10,000 staff treat around 300,000 patients per year. For years, Schoen Clinic has measured the results of treatment and regularly used them to make relevant improvements for its patients.