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2020 Half-Year Trading Update
Mediclinic International plc
(Incorporated in England and Wales)
Company Number: 08338604
LSE Share Code: MDC
JSE Share Code: MEI
NSX Share Code: MEP
ISIN: GB00B8HX8Z88
LEI: 2138002S5BSBIZTD5I60
(“Mediclinic”, the “Company”, or the “Group”)
16 October 2019
2020 Half-Year Trading Update
Mediclinic International plc, the diversified private healthcare services group, provides the
following trading update ahead of the publication of the Group’s results for the half-year ended
30 September 2019 (“1H20”) on 14 November 2019. The information on which this trading
update is based, represents the Group’s latest financial estimates and has not been reviewed
and reported on by Mediclinic’s external auditors. All financial figures, unless explicitly stated,
are adjusted*. The Group has adopted the new IFRS 16** accounting standard from 1 April
2019, applying the simplified transition approach on which basis comparatives will not be
restated. Pre-IFRS 16 margins have been provided for comparative purposes only.
Commenting today, Dr Ronnie van der Merwe, Group Chief Executive Officer, said:
“I am encouraged by the first-half performance of the Group with trading in line with
expectations. At all three divisions, our core acute care business is being supplemented by our
continued expansion across the continuum of care.
“In Switzerland, Hirslanden delivered good revenue growth and a broadly stable EBITDA
margin. At Mediclinic Southern Africa, patient volumes were in line with expectations and we
continue to invest in initiatives to further enhance our clinical standards. At Mediclinic Middle
East, there was a continued focus on efficiencies in operational delivery. Contributing to the
division’s growth was the strong performance at the new Mediclinic Parkview Hospital in Dubai
and the continued gradual improvement in the Abu Dhabi business where Mediclinic Airport
Road Hospital delivered good growth.”
Hirslanden
Hirslanden has continued to make good progress in adapting the business to the regulatory
changes affecting the Swiss healthcare system. Performance during the first six months of the
financial year was in line with expectations and incorporates the impact of identified clinical
treatments transferring from an inpatient to a lower outpatient tariff. This process has gradually
occurred across Swiss cantons over the past two years, with official national implementation
effective from 1 January 2019. In response, Hirslanden has initiated a new day case surgery
strategy which focuses on a lower cost and more efficient service delivery model; continued to
attract additional clinical professionals; delivered ongoing cost management and efficiency
savings; and advanced the Hirslanden 2020 strategic project.
Hirslanden delivered 1H20 growth of around 5.0% in both revenue (1H19: CHF826m) and
inpatient admissions, benefiting from the contribution of Clinique des Grangettes. Revenue per
admission was down 2.2%, while the general insurance patient mix was 49.2% (1H19: 49.4%).
The revenue contribution in 1H20 from Clinique des Grangettes (consolidated from 1 October
2018) was around CHF55m (1H19: nil) and the hospital contributed 5.5% growth in Hirslanden
inpatient admissions during the period.
On an IFRS16 accounting basis the EBITDA margin was around 16.0%. The pre-IFRS16
EBITDA margin for 1H20 was broadly stable at around 14.0% (1H19: 14.3%).
Mediclinic Southern Africa
At Mediclinic Southern Africa, 1H20 revenue was up around 7.0% (1H19***: ZAR8 013m) with
an increase in inpatient bed days sold of 2.7%, in line with expectations.
The revenue contribution in 1H20 from the majority investment in the Intercare group
(“Intercare”), consisting of four day case clinics, four sub-acute hospitals and one specialist
hospital, effective since 1 December 2018, was around ZAR105m (1H19: nil). As expected,
Intercare accounted for the majority of growth in the division’s inpatient bed days sold during
the period at 2.4%.
On an IFRS16 accounting basis the EBITDA margin was around 21.0%. The pre-IFRS16
EBITDA margin for 1H20 was in line with expectations at around 20.0% (1H19***: 21.0%).
Mediclinic Middle East
At Mediclinic Middle East, revenue growth was driven by the continued ramp-up of Mediclinic
Parkview Hospital in Dubai and a gradual improvement in the Abu Dhabi business with
Mediclinic Airport Road Hospital delivering a strong performance. Mediclinic Parkview Hospital
continues to outperform expectations since opening 12 months ago. The region continues to
experience a weaker macroeconomic environment and a sustained competitive landscape.
Mediclinic Middle East 1H20 revenue growth was around 8.5% (1H19: AED1 495m). Inpatient
and outpatient volumes in the division were up 9.0% and 5.5% respectively.
During the seasonally quieter first half of the year, on an IFRS16 accounting basis, the EBITDA
margin was around 12.5%. The pre-IFRS16 EBITDA margin for 1H20 was in line with
expectations at around 9.5% (1H19: 9.4%).
Spire Healthcare Group
Mediclinic holds a 29.9% investment in Spire Healthcare Group plc (“Spire”). Spire’s reported
performance for its half-year financial period ended 30 June 2019 was in line with expectations
and guidance for its financial year ending 31 December 2019 remained unchanged.
The investment in Spire is equity accounted, recognising the reported IFRS16 profit of £7.1m
for Spire’s financial half-year ended 30 June 2019 (six months ended 30 June 2018 pre-IFRS16:
£8.2m). Mediclinic’s 1H20 equity accounted share of profit from Spire amounted to £2.1m (1H19
on pre-IFRS16 basis: £1.8m).
Group
At the Group level, in constant currency, a solid first half performance was delivered with
revenue up around 6.5% (1H19***: GBP1 390m) and pre-IFRS16 EBITDA up around 3.5%
(1H19 pre-IFRS16: GBP213m). On a reported basis, 1H20 revenue was up around 9.0% and
pre-IFRS16 EBITDA was up around 5.0% (1H19 pre-IFRS16: GBP213m). The IFRS16 EBITDA
margin was around 16.5%.
As guided in detail at the 2019 full-year results presentation, adjustments to depreciation and
amortisation and finance costs are required for each division when adopting IFRS16. In
addition, 1H20 earnings will also reflect the increased depreciation and amortisation and
finance costs associated with the new Mediclinic Parkview Hospital in Dubai and the minority
interest for the Hirslanden Clinique La Colline and Cliniques des Grangettes combination in
Switzerland.
The average foreign exchange rates for 1H20 were GBP/CHF 1.25, GBP/ZAR 18.28 and
GBP/AED 4.62 (1H19: 1.31, 17.71 and 4.89 respectively).
* The Group uses adjusted income statement reporting as non-IFRS measures in evaluating
performance and as a method to provide shareholders with clear and consistent reporting. The
Group's non-IFRS measures are intended to remove from reported earnings volatility
associated with defined one-off incomes and charges which were previously referred to as
underlying.
** IFRS 16 accounting standard: addressing the definition of a lease, recognising and
measuring leases and establishing principles for reporting useful information to users of
financial statements about the leasing activities of both lessees and lessors.
*** Income statement reclassification at Mediclinic Southern Africa increasing revenue and cost
of sales by ZAR55m.
Cautionary Statement
This announcement contains certain forward-looking statements relating to the business of the
Company and its subsidiaries, including with respect to the progress, timing and completion of
the Group’s development; the Group’s ability to treat, attract and retain patients and clients; its
ability to engage consultants and general practitioners and to operate its business and increase
referrals; the integration of prior acquisitions; the Group’s estimates for future performance and
its estimates regarding anticipated operating results; future revenue; capital requirements;
shareholder structure; and financing. In addition, even if the Group’s actual results or
development are consistent with the forward-looking statements contained in this
announcement, those results or developments may not be indicative of the Group’s results or
developments in the future. In some cases, forward-looking statements can be identified by
words such as “could”, “should”, “may”, “expects”, “aims”, “targets”, “anticipates”, “believes”,
“intends”, “estimates”, or similar. These forward-looking statements are based largely on the
Group’s current expectations as of the date of this announcement and are subject to a number
of known and unknown risks and uncertainties and other factors that may cause actual results,
performance or achievements to be materially different from any future results, performance or
achievement expressed or implied by these forward-looking statements. In particular, the
Group’s expectations could be affected by, among other things, uncertainties involved in the
integration of acquisitions or new developments; changes in legislation or the regulatory regime
governing healthcare in Switzerland, South Africa, Namibia and the United Arab Emirates; poor
performance by healthcare practitioners who practise at its facilities; unexpected regulatory
actions or suspensions; competition in general; the impact of global economic changes; and
the Group’s ability to obtain or maintain accreditation or approval for its facilities or service lines.
In light of these risks and uncertainties, there can be no assurance that the forward-looking
statements made in this announcement will in fact be realised and no representation or warranty
is given as to the completeness or accuracy of the forward-looking statements contained in this
announcement.
The Group is providing the information in this announcement as of this date, and disclaims any
intention to, and make no undertaking to, publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
About Mediclinic International plc
Mediclinic is a diversified international private healthcare services group, established in South
Africa in 1983, with current operating divisions in Switzerland, Southern Africa (South Africa
and Namibia) and the United Arab Emirates. Its core purpose is to enhance the quality of life of
patients by providing acute care, specialist-orientated, multi-disciplinary healthcare services.
Mediclinic also holds a 29.9% interest in Spire Healthcare Group plc, an LSE-listed and UK-
based private healthcare group.
Its vision is to be the partner of choice that people trust for all their healthcare needs.
The Group is focused on providing specialist-orientated, multi-disciplinary services across the
continuum of care in such a way that the Group will be regarded as the most respected and
trusted provider of healthcare services by patients, medical practitioners, funders and
regulators of healthcare in each of its markets.
As at 30 September 2019, Mediclinic comprised 78 hospitals, five sub-acute hospitals, 13 day
case clinics and 22 outpatient clinics. Hirslanden operated 18 hospitals, two day case clinics
and three outpatient clinics in Switzerland with more than 1 900 inpatient beds; Mediclinic
Southern Africa operated 53 hospitals, five sub-acute hospitals and nine day case clinics across
South Africa and three hospitals in Namibia with more than 8 500 inpatient beds; and Mediclinic
Middle East operated seven hospitals, two day case clinics and 19 outpatient clinics with more
than 900 inpatient beds in the United Arab Emirates.
The divisions' contributions to Group revenue for the financial year ended 31 March 2019 were
47% by Hirslanden, 30% by Mediclinic Southern Africa and 23% by Mediclinic Middle East.
The Company’s primary listing is on the London Stock Exchange (“LSE”) in the United
Kingdom, with secondary listings on the JSE Ltd in South Africa and the Namibian Stock
Exchange (“NSX”) in Namibia.
For further information, please contact:
Investor Relations, Mediclinic International plc
James Arnold, Head of Investor Relations
ir@mediclinic.com
+44 (0)20 3786 8181
Media queries
FTI Consulting
Brett Pollard/Ciara Martin – UK
+44 (0)20 3727 1000
Sherryn Schooling – South Africa
+27 (0)21 487 9000
Registered address: 6th Floor, 65 Gresham Street, London, EC2V 7NQ, United Kingdom
Website: www.mediclinic.com
Corporate broker: Morgan Stanley & Co International plc and UBS Investment Bank
JSE sponsor (South Africa): Rand Merchant Bank (A division of FirstRand Bank Ltd)
NSX sponsor (Namibia): Simonis Storm Securities (Pty) Ltd
Date: 16/10/2019 08:00:00
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