Quality drives productivity and growth

Transcription

1 Quality. Compassion. Care. Quality drives productivity and growth Introduction to Capio January, 216

2 Capio today About 12,4 employees and 4.6 million patient visits in Sweden, Norway, France and Germany Footprint (214) Sales: SEK 13.2 billions Offers a broad range of medical, surgical and psychiatric care of high quality in our hospitals, specialist clinics and primary care units Strong well established brand, recognized for high quality and Modern Medicine one of the sector s strongest brands in Europe Founded in 1994 in Gothenburg. De-listed in 26 and listed on Nasdaq OMX Stockholm in 215 (June). In the past nine years Capio has: Developed a medical strategy Driven by an empowered organization Invested in facilities and equipment to build for the future 37% 9% 54% A leader in European healthcare 1

3 Capio footprint University hospital Nordic Sweden 1 emergency hospital 2 local hospitals 3 locations for specialist care 18 locations for psychiatric care 76 locations for primary care Emergency hospital Local hospital Specialist clinic Norway 8 medical centers 2 specialist clinics France 8 emergency hospitals 11 local hospitals 3 specialist clinics Capio footprint 215 Primary care unit Germany 5 general hospitals 4 specialist clinics 1 hospital with rehabilitation and care facilities 7 outpatient clinics (Medical Care Centers, MCC) Experience across all care levels 2

4 Historical financial performance Net Sales (MSEK) EBITDA 1 (MSEK) EBITA (MSEK) 8.8% CAGR 9.6% CAGR 13.5% CAGR , 12, 13,2 13,426 12,42 12,96 13, ,4 1,2 EBITDA margin (in % of Net Sales) 28% 24% 1,4 1,2 EBITA margin (in % of Net Sales) 28% 24% 1, 8,459 1,128 9,73 9,855 1,417 1, ,84 1,12 1, ,9 4 2% 1, 2% 8, 6, 7, % 12% % 12% 4, 4 8% % 2, 2 4% 2 4% & PF RTM Sep Organic growth (in %) & PF RTM EBITDA margin (in % of Net Sales) Sep % % % % & PF RTM EBITA margin (in % of Net Sales) Sep 4.5 % Average organic sales growth 2 4.2% Pro forma margin, % Pro forma margin, % Source: based on audited FS for Capio Holding AB Group no adjustments made based on audited FS for Ygeia TopHolding AB Group adjusted for divested business in 21, 29 and 28 (Spain, Unilabs and Diagnostics) 1 EBITDA defined as EBITA adjusted for depreciations and impairments related to operating fixed assets; 2 CAGR and average based on ; 3 Adj. related to the handover of a contract business in Capio Nordic to another healthcare provider (MSEK -16) and for the divestment of UK (MSEK -8); 4 Adj. related to the handover of a contract business in Capio Nordic to another healthcare provider (MSEK -25), the French SLB transaction (MSEK -92) and for the divestment of UK (MSEK -13); 5 Adj. related to the handover of a contract business in Capio Nordic to another healthcare provider (MSEK -24), the French SLB transaction (MSEK -66) and for the divestment of UK (MSEK -11) 3

5 Private healthcare provision in Capio markets Summary of market outlook, E, EUR billions Capio-relevant markets and segments % Private provider market share Percent Additional market growth from Capio market mix Percent SWEDEN NORWAY FRANCE GERMANY Private primary and specialist care Private specialist healthcare (shares also incl. primary care) MSO private hospital care 1 ( shares incl. all private hospitals) Private hospitals (shares by general hospitals) % 13% 7% 6% 23% 23% 5% ~16% +~2% p.a. +6-7% p.a % p.a % p.a E E E E +-1% p.a. +1-2% p.a. +-1% p.a. n/a Source: Capio market assessments 1 Private and public MSO Hospital care market in France is estimated at EUR 65 billions in Refers to forecast E Private providers are an important part of the solution 4

6 The European healthcare market is evolving 5

7 The European challenge is not going to ease demographic squeeze is driving need and costs The population structure develops towards a larger share being elderly Population pyramid of EU 196 to 25 Medicine and technology increase life expectancy for an evermore care seeking population boosting care consumption Required healthcare expenditures expected to continue increasing 15 Total expenditure on health, GDP (%) Innovation drives demand Advances in medicine, technology and treatment methods that increase life expectancy and care consumption Consumerism drives demand A more informed and care-seeking consumer seeking sickness prevention Sweden 198 France 199 Germany 2 Future development projected in line with historic OECD average CAGR from 22 to United Kingdom 22E 23E Norway Pressure to provide quality healthcare with higher productivity as fewer people have to pay for an increasingly large share of the population Source: OECD Health data 213, World bank 6

8 Large gaps and slow implementation create opportunities Historic implementation of modern medicine is a slow process Best-practice proven with large performance gaps between countries AVLOS Days Knee prosthesis Best-practice 2 > Acute myocardial infarction 2 >15 ~ YEARS 1 Share of ambulatory surgery % Inguinal hernia (open surgery) Best-practice implemented Tonsillect -omy Source: AVLOS Sweden: Socialstyrelsen; Norway: Helsedirektoratet; France: ATIH; Germany: Federal Statistical Office's DRG browser; Finland: Eurostat ; UK: Health and Social Care Information Centre; Spain: Eurostat; Bestpractice - knee prosthesis: North Wales knee clinic; Best-practice - AMI: US Healthcare costs and utilization project Ambulatory surgery All countries excluding Germany: Eurostat; Germany: German association of ambulatory surgery; Best-practice - Inguinal hernia: NHS; Best-practice - Tonsillectomy: US agency for healthcare research and quality 1 Goodman et al. 1997; 2 For Norway 211 data and only reported as aggregated data for knee and hip prosthesis Use Capio s know-how to transfer knowledge and speed up change 7

9 What happened in Sweden? Total expenditure on health 1, GDP Percentage 2 15 Actual data until 212 Prognosis from % track Sweden France Germany United Kingdom Norway OECD 1 5 1% track Year Source: OECD Health data Healthcare, long term nursing care, dental services and pharmaceuticals 2 Future development projected in line with historic OECD average CAGR from 22 to 212 Sweden was an early adopter of performance based reimbursement 8

10 Rapid recovery the result of better quality Rapid recovery after surgery Functional capacity Surgery Multi-modal intervention Meeting discharge criteria No complication Pain under control Managing activity of daily living Earlier discharge Days AVLOS Conventional treatment Weeks Cannot reduce AVLOS without improving quality 9

11 The Swedish healthcare system has its challenges Sweden has not yet met its target thresholds for waiting times, in particular outside of the Stockholm region Performance on target levels for waiting times ( vårdgarantiuppfyllelse ); Share of patients who have waited > 9 days Nation-wide Stockholm Specialist care surgeries and procedures 21% Specialist care - visits 17% 17% 16% 15% 15% 14% 15% 14% 14% 12% 11% 12% 11% 1% 8% 8% 6% 5% 12% Source: SKL (vantetider.se) Long waiting times and an experienced lack of resources drive need for increased productivity in the Swedish healthcare system 1

12 Partly explained by low staff productivity Swedish development of population, patients and resources Inpatient growth in line with population growth Outpatient growing faster Doctor growth in line with population growth Help nurses and especially nurses outgrowing population Source: SCB Estimated annual consultations per doctor (212) Annual consultations per doctor lower than in similar countries Clinical staff burdened by non-clinical tasks and old fashioned administration too little time spent with patients! Source: OECD A doctor treating more patients becomes a more skilled doctor 11

13 Modern Medicine & Management Two keys to change (1/2): Recent healthcare system reforms Illustrative country overview Performance-based remuneration Consolidation Focus on traditional scale synergies AVLOS In-to-out LEON / Specialization? Staff productivity? Indicative relevant market trends Different starting points and times, but all striving for the same direction 12

14 Two keys to change (2/2): Modernised organisation Capio decentralized responsibilities Group Business area Region Main unit NO! YES! Unit Care unit Capio s model for linking quality to results Communication Reputation QPI Waiting for orders? Taking initiatives! KPI Production KPI Productivity Sales Efficiency Management KPI Resources Direct costs Improved operating result = an effect of quality and productivity Gross result Overhead Operating result Empowered to do the best every day! 13

15 Capio s strategy Modern Medicine and Modern Management 14

16 Modern Medicine and Modern Management The patient in focus Modern Medicine with new treatment methods and techniques and a sound treatment of patients, enables shorter AVLOS and a continued shift from inpatient to outpatient treatments Modern Management to free up more patient time for doctors and clinical staff and to improve productivity HIGHER QUALITY OF HEALTHCARE Focus on quality and productivity drives volume and profitability 15

17 Modern Medicine allows optimization of flows and consolidation of units FRANCE Consolidation strategy Increasing productivity Closing beds Merging Regroup existing facilities into new facilities Attract new doctors and patients Continue to reduce AVLOS and improve productivity Star network A star network is a physical and virtual network around main units Modern main units with a large set of activities attracting both patients and doctors Several small specialized units (e.g., day care center, rehabilitation and post-acute, psychiatry) Individual medical practices, consultations and homecare in areas surrounding Capio s clinics Proximity care centres Health Insurance/ Regional Health Authority Day care centres General practitioners Surgery Maternity Daycare Medicine Consultancies Emergencies Capio clinic Rehab Specialists Compli-mentary Insurances Homecare Dedicate doctors to local points of care Improve accessibility for patients Attract new patients 27: Importing of Capio Model to France Today: Strong regional hubs Future: Integrated regional hubs structured along a star network 16

18 Modern Medicine driving shorter AVLOS and shift from inpatient to outpatient care FRANCE Share of operations in outpatient surgery in Capio France and total French market, % Average change per year Capio France Total France A leader in Modern Medicine in France In outpatient care Capio is ahead of and increasing more than the French market Transfer of inpatients to outpatients 3 pp, from 64% to 67% in the last twelve months (Sep 215) Source: ATIH, Capio Source: Capio Hip and knee prosthesis surgery Capio France Number of inpatients and outpatients % Provided in daycare Number RTM* Number of procedures Discharged, % <=4 days * *RTM Sep 215 Capio is currently creating the first pure outpatient center ever in France for surgery, including hip and knee replacements in day surgery Capio Clinique de Domont, outside Paris 43% of all hip and knee replacements were done in less than four days 17

19 Modern Management more time for the patient SWEDEN Illustrative example based on initial studies at some Capio wards Significant improvements in staff utilization needed to manage waiting times to treatment for patients and working environment for clinical staff Observations from initial studies at some Capio hospitals suggest; Only 12-14% of daily work performed by nurses are allocated to direct patient time About 4% constitutes of documentation, reporting, and pharmaceutical handling Large variations in the number of patients per care team (4-9), doctor consultations per day (7-22) and staff hours per operation hour (6-22) 6-8 patients per care team * = Other tasks include e.g. telephone, tutorial/introduction, meetings, other administration, coordination, business outside ward, waiting/searching, quiet time Source: Capio! Modern Management leads to a more efficient use of resources 18

20 From where we are to where we want to be SWEDEN Quality More time for direct and indirect care patients per care team 9.6 min per patient and day 1-12 patients per care team 13.1 min per patient and day 1 = When the number of patients increases, the time for indirect care and rounds have increased proportionally * = Other tasks include e.g. telephone, tutorial/introduction, meetings, other administration, coordination, business outside ward, waiting/searching, quiet time 36% more time spent with patients, but a significant reduction of total staff time 19

21 Doctors and nurses work together SWEDEN More time spent on rounds 26% 11% CStG CCB A lesson learnt from France 2

22 A platform for Modern Medicine GERMANY Best-practice AVLOS Days Share of ambulatory surgery % Knee prosthesis Acute myocardial infarction Inguinal hernia (open surgery) Tonsillect -omy 2 > >15 ~ Germany late in implementing Modern Medicine Performance based remuneration introduced in 25, but administrative restrictions prevent development Political reform needed and discussed Source: AVLOS Sweden: Socialstyrelsen; Norway: Helsedirektoratet; France: ATIH; Germany: Federal Statistical Office's DRG browser; Finland: Eurostat ; UK: Health and Social Care Information Centre; Spain: Eurostat; Best-practice - knee prosthesis: North Wales knee clinic; Best-practice - AMI: US Healthcare costs and utilization project Ambulatory surgery All countries excluding Germany: Eurostat; Germany: German association of ambulatory surgery; Best-practice - Inguinal hernia: NHS; Best-practice - Tonsillectomy: US agency for healthcare research and quality The biggest potential in Europe 21

23 How we make this happen The Capio Model Linked together from the patients need to financial results A sustainable way to drive quality and productivity 22

24 Capture scale benefits from completed projects and integrate small add-ons Benefit from recent large investment projects made to support the Modern Medicine strategy Acquire and integrate small add-ons in France and Sweden to strengthen regional clusters and centers of excellence Small and medium scale acquisitions E.g. Clinique du Parisis in France Return requirements Capio targets multiples of 5-7x EBITDA (pre-synergies) Structural acquisitions in existing countries and over time in new countries Acquisitions part of the strategy 23

25 Financial targets Net sales and organic sales growth (RTM) Operating result (EBITDA) and margin (RTM) 1 Net capital expenditure and in % of sales (RTM) MSEK % 14, 12, 1, 8, 6, 4, 2, Q3 Q4 Q1 Q2 Q Net sales, RTM Organic sales growth, % RTM MSEK % 1,4 1,2 1, Q3 Q4 Q1 Q2 Q Operating result (EBITDA) RTM Op margin (EBITDA, % RTM MSEK % Q3 Q4 Q1 Q2 Q Net capital expenditure, RTM In % of sales, RTM Net sales growth The target is to grow organically at least in line with the market and add acquisition growth at least at a similar rate over time Operating result (EBITDA) The target is to grow operating result at a higher rate than sales growth through increased productivity and operational leverage Net capital expenditure The target with present business mix is to keep net capex around 3% of net sales per year including Modern Medicine and expansion related capex 24

26 Questions & Answers 25