DGAP-News: RHÖN-KLINIKUM AG

Corporate News

Bad Neustadt/Saale, 29 March 2018
 

RHÖN-KLINIKUM AG:
Press Conference Full Year Results 2017 in Frankfurt am Main on 29 March 2018
 

- Guidance for 2017 fully met

- Patient numbers rise by 2.8 percent to 836,387

- Revenues increase by approx. 3 percent to Euro 1.21 billion

- EBITDA stands at Euro 97.8 million

- Net consolidated profit amounts to Euro 36.7 million

- Dividend proposal in the amount of Euro 0.22 per share

- Outlook for 2018: focus on profitability to increase noticeably, campus flagship project in
Bad Neustadt and intensifying the use of digital instruments throughout the corporate group

RHÖN-KLINIKUM AG held its ground in financial year 2017 with solid organic growth despite a difficult market environment and regulatory hurdles. The envisioned revenue and EBITDA targets for 2017 were fully met.

A total of 836,387 patients were treated in the company's hospitals in the past financial year (2016: 813,747). Corporate revenues stood at Euro 1.21 billion and rose by approx. 3 percent compared with the previous year (2016: Euro 1.18 billion).

The figure for earnings before interest, taxes, depreciation and amortization (EBITDA) of Euro 97.8 million is lower when compared with the previous year (2016: Euro 156.9 million): the drop amounts to 14.9 percent following adjustments for subsequent transaction effects of Euro 42 million from releasing provisions in connection with the Helios transaction. The trend, which has continued for years, of a diverging gap between revenues and costs due to the high budgetary and regulatory pressure continues. Material cost-intensive services, in which RHÖN-KLINIKUM AG specializes as a provider of predominantly high-quality, complex medical care, are not adequately remunerated. The so-called catalogue effect, which is particularly reflected in cardiological and special orthopaedic services, as well as other regulatory interventions have a negative effect on the company's financial figures.

The net consolidated profit amounted to Euro 36.7 million (2016: Euro 58.6 million): The high percentage changes are due to the transaction effects mentioned above and an offsetting value adjustment of EUR 35.5 million in connection with the Marburg Ion Beam Therapy Center from fiscal year 2016. A total of 16,688 employees were working in the company's facilities as of 31st December 2017 (31st December 2016: 16,486). The hospitals are each among the largest employers of their respective regions. The greatest growth in the number of employees was recorded by the two university hospitals in Giessen and Marburg.

"Despite the increased revenues we still cannot be satisfied with our profitability. We therefore continue to set ourselves ambitious targets. The enhancement program which has been running throughout the corporate group since the middle of last year will show initial positive effects in our operative figures in 2018 and counteract the unsatisfactory remuneration for services with high material costs as well as the trend towards out-patients. The agreement on separate accounting for our university hospitals in Giessen and Marburg (UKGM) will have a one-off positive effect of approx. Euro 20 million on our EBITDA: for the first time we shall receive satisfactory remuneration for our expenditure on research and teaching due to the conclusion of the agreement with a positive effect on our margins. We are very confident that we shall achieve the intended EBITDA range of Euro 117.5 million to Euro 127.5 million for financial year 2018," stated Stephan Holzinger, CEO of RHÖN-KLINIKUM AG.
 

RHÖN Campus Strategy and Digitalization in Focus
 

The RHÖN campus strategy stands for excellent medical care for patients in rural areas. A forward-looking healthcare concept which is tailored to the patient is being created by linking the different out-patient and in-patient medical services across all the various sectors. Our company is setting new standards with the current reconstruction of the campus in Bad Neustadt/Saale.

"Our new campus is much more than just a building measure. We are creating more effective and efficient structures in the provision of healthcare and improving patient flow. We are utilising the advantages of a fully digitalized hospital with state-of-the-art IT technology. The treatment of our patients is therefore faster, safer and of a higher quality. With the campus in Bad Neustadt/Saale which will be completed at the end of 2018 we shall take a unique and highly attractive prototype into service. We are positioning ourselves on the hospital market with this forward-looking model where not only RHÖN-KLINIKUM AG and its patients will profit from its increase in efficiency but also the cost-bearers, e.g. by avoiding double examinations," stated Holzinger.
 

Outlook
 

For the current financial year 2018 we expect revenues in the amount of Euro 1.24 billion plus/minus 5 percent. A continuing burden on our company remains regulatory legislation such as lower remuneration for services with high material costs (especially cardiological services) or the discount for lower overheads on additional services.

For 2018 we expect a much higher amount for earnings before interest, taxes, depreciation and amortization (EBITDA) of between Euro 117.5 million and Euro 127.5 million in comparison with 2017, EBITDA being positively influenced by the agreement with UKGM regarding separate accounting as well as other effects.

The Board of Management and Supervisory Board shall propose to this year's Annual General Meeting on 6th June 2018 in Bad Neustadt/Saale the distribution of the net consolidated profit in the form of a dividend in the amount of Euro 0.22 per non-par share to the shareholders. This corresponds to a dividend payout ratio of approx. 40 percent. With this ratio RHÖN-KLINIKUM AG safeguards its medium-term ability to make investments yet also allows its shareholders to participate in the future success of the Company.

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RHÖN‐KLINIKUM AG is one of the largest healthcare providers in Germany. The hospital group offers excellent medical care with a direct link to universities and research institutes. More than 830,000 patients are treated every year at the five group hospitals located in Bad Berka, Bad Neustadt, Frankfurt (Oder), Giessen and Marburg where approx. 16,700 employees work.
With the RHÖN campus concept the Company is currently implementing a new and forward-looking project which raises fully comprehensive healthcare in rural areas to a new level of excellence and is geared to the growing needs of patients. www.rhoen-klinikum-ag.com

Contact
RHÖN-KLINIKUM AG
Head of Investor Relations
Mr. Julian Schmitt
Telephone: +49 9771 65-1536 | E-Mail: ir@rhoen-klinikum-ag.com