Press release
Fribourg, 27 March 2017
AEVIS VICTORIA SA - Publication of Annual Report 2016
Revenues up to CHF 592.6 million, significant increase of EBIT and operating cash flow. Based on an unchanged portfolio, the group expects to realise a revenue of more than CHF 700 million and an EBITDA of CHF 100 million in 2017
AEVIS VICTORIA SA today published its Annual Report 2016. In 2016, the two most important divisions of AEVIS VICTORIA (Swiss Medical Network and Victoria-Jungfrau Collection) realised operational and financial progress, with an EBITDAR margin over 20%. Consolidated EBITDA surged to CHF 74.6 million (2015: CHF 64.5m). AEVIS VICTORIA's operating cash flow progressed by 52% to CHF 55.6 million (2015: CHF 36.6m). Organic growth combined with targeted acquisitions and internal optimisations contributed to increased revenues and improved profit margins. Générale Beaulieu Holding (GBH) was only consolidated for 2 months in 2016, as of November 1st. With a 12-month consolidation of GBH, the 2016 revenues reach CHF 664.9 million and EBITDA CHF 86.7 million.
Total revenues grew by 2.9% to CHF 592.6 million (2015: CHF 576.1m) and net revenues (medical fees excluded) amounted to CHF 517.1 million (2015: CHF 508.6m). Substantial efficiency gains and the exploitation of synergies contributed to a higher operating profit. On the Group level, EBITDA reached CHF 74.6 million (2015: CHF 64.5m). EBIT increased by 31.8% to CHF 31.4 million (2015: CHF 23.9m). Net profit for the year amounted to CHF 2.7 million. The operating cash flow surged significantly by 52.0% to CHF 55.6 million in the year under review. The Board of Directors will propose to the Annual General Meeting a distribution from capital contribution reserves of CHF 0.55 per share, in line with its long-term distribution policy.
Hospitals
Swiss Medical Network performed well in 2016. An increased number of patients offset lower DRG and TARMED rates in Switzerland and resulted in a record turnover of CHF 521.0 million (2015: CHF 482.8m). Operational improvements and synergies contributed to an EBITDAR of CHF 91.9 million, 29.8% more than a year ago. This solid operational result corresponds to an EBITDAR margin of 20.6% (2015: 17.0%).
The network's growth continued with the successful integration of Clinique Générale-Beaulieu in late 2016. The Geneva-based multidisciplinary hospital is specialised in orthopaedics, general surgery, urology, gynaecology and obstetrics. Clinique Générale-Beaulieu has 477 employees and 571 admitting physicians, and achieved a turnover of CHF 83.4 million and an EBITDAR of CHF 15.7 million in 2016. A full year consolidation of Clinique Générale-Beaulieu in Swiss Medical Network would have generated a pro forma revenue of CHF 591.0 million and a pro forma EBITDAR of CHF 104.6 million. The network now consists of 15 hospitals, one affiliated hospital and one clinic, with 988 available beds, 1'782 admitting physicians and 2'948 employees.
Swiss Medical Network made a crucial contribution to contain healthcare costs in Switzerland in reducing its base rates. A common flat rate payment system for all listed hospitals at the rate of CHF 9'050 per case was introduced in March 2016, and it was further reduced on 1 January 2017 to CHF 8'930. These rates are substantially lower than the insurers' benchmark (HSK and Tarifsuisse, both around CHF 9'500) and around 10% below those of the public hospitals (above CHF 10'000).
Hospitality
The luxury hotels of Victoria-Jungfrau Collection achieved turnover gains despite a drop in tourism activities in Switzerland. The net revenue grew from CHF 58.9 million in 2015 to CHF 60.7 million in 2016. The results of Palace Lucerne, still operated by the Group, are no longer consolidated, as a new management contract structure was put in place on 1 January 2016. The number of overnight stays remained constant at around 169'000 and the average room rate increased from CHF 366 a year ago to CHF 372 in the period under review (three fully consolidated hotels). Further efficiency gains and cost savings contributed to the profitability and the EBITDAR margin reached 20.1%. On 1 December 2016, Victoria-Jungfrau Collection acquired the operations of the Hotel Crans Ambassador, a luxury sport resort in Crans-Montana (canton of Valais), and thereby enlarged the portfolio to a fifth establishment. The hotel Crans Ambassador has 56 rooms and employs 60 people.
Real Estate
Rental income in the real estate segment, composed of healthcare- and hospitality-related real estate, amounted to CHF 51.2 million (2015: CHF 36.4 million) and EBITDAR surged to CHF 42.4 million (2015: CHF 32.5 million), which mostly corresponds to intercompany payments with AEVIS VICTORIA's hospital and hospitality segments. With the purchase of an office building in Echandens and the acquisition of three buildings in Geneva in connection with the integration of Générale Beaulieu, the property portfolio grew to 44 properties on 17 sites and represents a total rentable surface of 193'880 sqm with a market value of CHF 1'148.3 million.
Public takeover offer for LifeWatch AG
Early 2017, AEVIS VICTORIA launched a public takeover bid for all publicly held registered shares of LifeWatch AG, with the offer period ranging from 7 March 2017 to 10 April 2017. On 9 March 2017, a Committee of the Board of Directors of LifeWatch AG has recommended the rejection of AEVIS VICTORIA's offer. LifeWatch has solicited alternative offers and mandated an investment bank to help them in this process. AEVIS VICTORIA remains convinced that LifeWatch would benefit from the support of a strategic reference shareholder and will see how the situation evolves and take the necessary measures at the end of the process, in the best interest of the companies. Antoine Hubert and Antoine Kohler will not stand for re-election to the Board of Directors of LifeWatch AG in its present form. Based on the results of its public takeover offer, AEVIS VICTORIA will make a proposal for the Board of Directors of LifeWatch.
Outlook
Based on an unchanged portfolio, AEVIS VICTORIA SA expects to realise a total revenue of more than CHF 700 million and an EBITDA of more than CHF 100 million in 2017. The company will pursue its optimisation, acquisition and collaboration strategy in its expertise areas. Several projects are currently being evaluated. The operating and financial structures are now dimensioned for a fast integration of new acquisitions.
Detailed reporting
AEVIS VICTORIA SA's Annual Report 2016 can be downloaded via this link:
http://www.aevis.com/aevis/pdf/AEVIS_AR_2016.pdf
Webcast today at 10.00 CET
AEVIS VICTORIA SA will present an overview of its operational and financial results in 2016 as well as its future development plans during a webcast today at 10.00 CET. The results call will be headed by Antoine Hubert, Delegate of the Board. The conference will be held in English.
Link to live audio webcast:
http://aevis270317-live.audio-webcast.com
Dial-in numbers for conference call function only:
CH: +41225805970
DE: +4969222229043
UK: +442030092452
USA: +18554027766
PIN Code: 60482397#
For further information:
AEVIS VICTORIA SA Media and Investor Relations: c/o Dynamics Group, Zurich
Philippe R. Blangey, prb@dynamicsgroup.ch, +41 (0) 43 268 32 35 or +41 (0) 79 785 46 32
Séverine Van der Schueren, svanderschueren@aevis.com, +41 (0) 26 350 02 02
AEVIS VICTORIA SA - Investing for a better life
AEVIS VICTORIA SA invests in services to people, healthcare, hospitality, life sciences and lifestyle. AEVIS VICTORIA′s main shareholdings are Swiss Medical Network SA, the second largest group of private hospitals in Switzerland, Victoria-Jungfrau Collection AG, a luxury hotel group managing five luxury hotels in Switzerland, a hospitals and hospitality real estate division, Medgate, the leading telemedicine provider in Switzerland, and NESCENS SA, a brand dedicated to better aging. AEVIS is listed on the Swiss Reporting Standard of the SIX Swiss Exchange (AEVS.SW). www.aevis.com.
