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Thank you. So good morning, everyone, to Medicover's third quarter report. So I will start off and then Joe will come in later with his specific financial comments. So the theme for this quarter is really ongoing strong revenue growth, strong organic revenue growth and profit growth remain somewhat held back by the ongoing German public reform situation that we will comment on more specifically. So 16.3% up on revenue, of which 13.8% organic growth, so very robust growth. The adjusted EBITDA, where we also exclude the India startup fertility business grew by 8%. Healthcare Services particularly strong revenue growth as we will take you through supported by a very strong employment market and the prepaid business, particularly in Poland. Diagnostic services, obviously, held back by the headwind in Germany, but very strong growth in Ukraine, in Romania and the other markets. And we reiterate the revised guidance that we gave midyear for 8% to 12% organic adjusted EBITDA growth for this year. And our midterm 3-year organic EBITDA growth target remains the same at 18% to 20%. And if we flip to the next slide, looking at the revenue growth outlook. So as I said across all locations with the exception of German laboratory and also the Polish hospital business, all other businesses had substantial double-digit growth, which overall then supported organic growth of just short of 14%. So very solid growth outlook. The development in Germany as mentioned, still impacted by the reimbursement provisions that implement in quarter 2. I'll come back and comment more specific on that, on the diagnostic service slide in just a bit. We have also -- last year was strong in Healthcare Services -- first half year this year was strong in Healthcare Services. And on the one hand, I'm very pleased to report accelerated growth in that business in Healthcare Services, which has had a big knock on impact in terms of investing quite significantly more on taking on more capacity, which will take you through the details so just in a bit as well, which put short-term pressure on margin for Healthcare Services. Overall, adjusted EBITDA grew by just short of 5% to EUR 16 million or 9.6% margin. You see a drop since last year of 100 basis points, related to largely the situation in Germany. And also, as we help you with reporting excluding the startup losses in India for the Fertility business, we came to EUR 16.5 million or 7.8% margin. Then going specifically into Healthcare Services. So just short of EUR 87 million revenue, up a strong 21.5%. I think that a long time ago, I recall Healthcare Service being above 20% revenue growth, so that is significant. The main driver of that, not surprising, is the employee paid business, representing 2/3 of the overall cake and also representing about the same proportion of growth. Fee-for-service also growing nicely but because of the size of the corporate paid business that's the bulk of the driver. You see 17% member growth, we put on in this quarter, alone, 40,000 new members, so that's equivalent of a little city. So that's a lot of people. We're just ahead of the busiest season in the year for us, so the six months ahead of us now is really important from a customer point of view, so we've really accelerated quite a bit of facility programs. I can put that in context for you in terms of looking at the amount of medical space that we have put on this year versus last year. And remember that 2017 was a strong growth year as well. And the amount of medical space that's been put on for the first 9 months this year relative to last year is a factor of 4, so we have added 4x as much medical space this year around versus last year. Of course, that has quite a lot of short-term cost implementation and again remember the revenue model here, we take on all the members upfront but we account for the revenue in subsequent quarters. And all of the new people have to be serviced day 1 when they arrived. So we frontload quite a lot of facility investment here, which is absolutely right thing to do in terms of this quite extraordinary growth environment we find ourselves in. So EBITDA for Healthcare Services came out at EUR 9.1 million or 10.5% margin, and as you know here, in Healthcare Services, we have the India Fertility, so adjusting for that, to help you with that, we get to 11.2%. You see a 50 basis points contraction versus last year, which is related to the facility expansion I just mentioned. Overall, growth outlook for this business remains intact in the same way as we have reported over the past two quarters. We have consolidated in the prior reported acquisitions, the OK System, a Polish benefit business for the full quarter and the Romanian hospital operator Pelican for the last month in the quarter. Then flipping over to Diagnostic Services. So revenue at EUR 83 million, 11% up; organic, a bit higher there due to currency issue out of both Romania and Ukraine. So 30.5% organic growth; and lab test growth being some 8%. So you can see here, we also have some price increases coming through, which is good. The price issues and the reform issues in Germany that we talked about last quarter around, have obviously impacted us quite significantly during the quarter. Now it's important to remind you, that the private pay business has not been impacted by this. So in fact, private pay businesses is -- have -- probably have had a positive impact from this. But clearly quite a significant impact on the public pay side. I think we did comment last quarter around, there was a similar kind of reform implemented back in 1998, so that's some, I guess, 20 years ago. And of sort of a similar nature, this. And that normalized over about 12 months in the market. Now, we're 6 months into this and we can say that we have seen a quite a bit of, sort of, referral normalization towards the end of the quarter we're reporting now. So in the month of September and into October, now we write in the report it's too early to say that this is a normalization, and we want to be a bit cautious and wait another quarter. But clearly, we have seen a pickup in that trend towards the end of the quarter. But the bulk of the impact obviously came early in the quarter and then during the summer, which is the outcome for this particular quarter. So EBITDA reached EUR 9.3 million with a margin of 11.2%, and you see 190 basis point contraction due to the point I just made. We have added quite a lot of blood drawing points, so the businesses, both out of Romania and Ukraine are charging on all cylinders. So 566 locations by end of quarter 3, and that's just all we announced the other week that we have also acquired the Ukrainian lab operations of imbetro, that we expect to close early in the next year, that will add another around 60BDPs to our Ukrainian network so you see around the 10% overall increase on our BDP network. We had sort of good growth in the German Clinics business, so up some 15% of revenue and EBITDA margin 6.4%. That was a good growth on last year. And Russia, we're looking at a good ongoing growth outlook, and the previous estimates that we stated for the German Clinics business. And if we -- Slide 7. Yesterday was the public inauguration of our 11th hospital in India. So this is a live picture taken by one of our colleagues who was there yesterday, [ Nashiq ], with a number of Indian dignitaries just in front of our hospital. The hospital has effectively been operating for around 1 month to 6 weeks. So it's all up and running and works well and only yesterday was then the public inauguration. Although in this quarter, our effective ownership in MaxCure has not changed, which remains that 45.1%. The 11 hospitals I just mentioned, the most recent one, quarter 3 revenue for MaxCure was just about EUR 40 million or 9.4% underlying growth. And we continue to see a very good outlook for MaxCure opportunity to keep on expanding, not the least to fill the hospital on the right-hand of the page there. The fertility business, we reported a loss of EUR 0.5 million for the quarter. You will notice that's quite a bit better than prior quarters, which is effect of actually the [ filters] filling up quite nicely. We are now operating a total of 15 clinics across the country and the latest one being a Flagship Clinic that we opened in Hyderabad, actually very close to main MaxCure hospital location. And we target to be around 20 clinics by year-end. The longer established clinics, they are profitable and the Delhi cluster, where we started as you know as a home, that is now profitable. So we are -- we have a lot of confidence and clearly, we are -- we keep on pushing this rollout of -- with a quite high level of aggressiveness, if I can use that word. So we've previously stated an assumed lost here for the year, about EUR 4 million. And we can see that being less because of this more favorable development. So probably down towards EUR 3 million, EUR 3.5 million there somewhere, but clearly less than the previously stated EUR 4 million. So that was pretty much my introduction. So, Joe, you want to take over?
Thanks, very much Fredrik. On Slide -- Page 10, financial numbers. So I think Fredrik mentioned there, it was categorized by the headwinds in terms of Germany. We still see the revenue growing strongly, and all of the other main business units have performed well in terms of -- for net revenue growth. Germany, fortunately, we have actually been mitigated a little bit of the full effects of the regulatory changes in respect to private paid growth, which remains robust. In terms of the margins and the EBITDA, we came in at adjusted EBITDA, EUR 16 million versus EUR 15.3 million in the prior year quarter. So an increase of some 4.6% on an organic basis as we use for our guidance and target, so it was at 3.3% increase. We had the impact of acquisitions coming in this quarter. So we had 1 month of consolidation of our Pelican Hospital business acquired in Romania. And the full -- for the full quarter OK Systems to benefit -- sports benefit package for employee benefits in Poland.In terms of for the 9 months, it came in at the -- adjusted EBITDA of 45.6 versus 42.9 in -- for the prior months. So an increase of some 6.3% on an organic basis, excluding acquisitions and currency effects. That was a growth of -- and excluding the Indian IBF business, that was 9.6% growth. We look at the two segments, the two divisions where we can see that we have a decrease in terms of the margin for the Healthcare Services side compared to last year, so 1.2% decrease; the 10.5% margin versus 11.7%; and an increase overall of around 8%, 9.1% versus 8.4% That has been impacted by the requirement and the obligation for us to put on new medical space. We've been in this business for quite some time, Fredrik and I. So we have been through the cycles of where we've had strong growth periods, and the key for us in all of those previous ones was making sure that we can provide services to the new clients, putting on the facilities and making sure that the doctors and the medical staff are in there and trained, and able to provide them with the care. That's important part in terms of retaining those customers. I mentioned that last time around as well. So coming up to the busy season now in the fourth quarter and into the first quarter, we need to make sure we have the facilities and the medical staff to be able to run our obligations to our clients. For the full year, that was a similar picture, we had an 8.5% margin versus 9.6%, we were down 1.1% margin on that. No real impact in terms of the acquisition on those gross margins. In terms of for the diagnostics, we had 11.2% margin for the quarter versus 13.1%, so we had a decrease of 1.9%. And that is pretty much fully down to the impact in terms of Germany. And for the full year, that was 13.1% margin versus 14%, so we were off some 0.9%. And the business there is performing very well, ex that German laboratory impacts. You come onto some specific comment in terms of next slide. We have forecast an effective tax rate of around 29%. That effective tax rate was adjusted for the impact of other income line, which majority of it is not taxable given the nature of it. We may come in a little bit lower than that 29%, I don't really expect it to, for the full year, to be higher. We have now the acquisition we've taken in, in the quarter. So we have acquired 80% of the Pelican hospital. That's been for one quarter more or less. The price we paid for that was EUR 23.3 million. And then we have the benefit system, the benefit package work for sports OK Systems in Poland, that we actually acquired in Q2 -- at the end of Q2, so that's consolidated for the full quarter in terms of the P&L. We paid around EUR 8 million for that. So goodwill for those 2 acquisitions, we've recognized on the balance sheet, some just short of EUR 18 million. We now have also announced that we've acquired or we signed an agreement to acquire a genetics laboratory based just sort of Southwest of Munich. That's quite a well-recognized genetics business within Munich, and that would be -- have some synergistic impact in terms of our existing business. We have also then just announced that we're acquiring a business in Ukraine, the price of this would be around about EUR 6 million, but both of these are subject to regulatory approval so the consolidation is expected from the start of January next year. Maybe with the Ukraine one, we could actually consolidate there earlier but there won't be any impact in terms of the profit loss for the year. Just to mentioned, in Ukraine, we have strong cash generation from the business there, but it performed very well. So we are not actually putting new money into Ukraine, this is a recycling of the money that we generated out of Ukraine. We have then, in the other income line around EUR 1.1 million that we've recognized. This is mainly the recondition of the value in our option positions versus our evaluation model for the options that we have for our max shore engine hospital shares. The interest income was low, just over -- around EUR 100,000. This was low because we did some adjustments of the full year impact, so normally this would be, on a normal basis, you could look at this being nearer to being sort of EUR 600,000 to EUR 800,000. Operating cash flow was good, EUR 15.8 million versus EUR 15.4 million. We had a very benign working capital quarter, so we had net inflows of just short of EUR 7 million from working capital. IFRS equity is strong at EUR 316 million, up from just over EUR 300 million at the end of the year. Net debt, we are at EUR 55 million. We have quite large cash balance on the balance sheet at the end of the quarter. And part of this is money which we put into a blocked account, which is for security for the genetics laboratory acquisition. So that's restricted cash, and that's why we have some high cash values on the balance sheet. If you have a look at what we've been doing in terms of the investment side, slide #12. We have now picked up, in terms of the deployment of money into acquisitions, so we have these two larger acquisitions, the OK Systems at the end of Q2 and Pelican during the quarter, so that makes up a large proportion of that 40 -- just over EUR 40 million since the IPO. We've done a number of other transactions but they have been at the smaller end of the curve. We are now building this genetics capabilities. It's an area we have had a focus on for a while. This laboratory in the south of Germany is a very important step for us in addressing that strategy. We have a particular test, which is called noninvasive pregnancy testing. It’s becoming quite prevalent and quite used now. It's a very good example of the real-world application in genetic testing and a real practical impact, real increase in the quality of testing and the quality of diagnostics. There's nothing particularly new about noninvasive pregnancy testing. It's been around for a little while now. But we have brought in our own test, which we're now localizing in Germany with a partner. And we think that, that will be a quite interesting development in the genetics field. This was a discussion in terms of making that reimbursable in Germany through the public health care system. That's probably going to happen next year, so I think that, that will prepare us and put us in a good position in Germany for being able to distribute that test. Investments in CapEX, we have as Fredrik mentioned, been very busy in terms of putting medical space in place. So we've spent in terms of growth CapEx, which is not just those facilities, it's other things as well. We spent some EUR 16.1 million in 9 months and some EUR 30 million since the IPO. And We have this, now -- this 9 months we have put in around 10,000 square meters in putting on new space for dealing with our increased volumes. We have the two main investments in India, the MaxCure investment and the Fertility investment. So between the two of them -- sorry -- so we've put in, in terms of the facility, EUR 10.9 million, including the original acquisition from -- back in -- back at the -- in 2017 beginning of the fourth quarter. And for MaxCure, we've invested some just short of some EUR 30 million. In terms of the balance sheet, the obligations we've assumed as well, that comes up to around EUR 40 million. In terms for the MaxCure, nothing has changed in terms of the investments that we have done for this quarter. So no new money into that. They're busy expanding as you saw with the inauguration that Fredrik -- nice little slideshow Fredrik showed you. So they're busy spending that money. In terms for the fertility business itself, you would've seen that we have a lower loss that we incurred in this quarter and that's pretty much been driven by the maturity of the centers that we've already put in place. We gave guidance before the -- for the full year, we were expecting around about EUR 4 million loss for the fertility business. That's going to come in lower for the full year, so that's going to more like in the range of somewhere between EUR 3 million to EUR 3.5 million loss for the full year. Onto the next slide. And if we look at the growth target, those were quite handsomely met, so for the quarter, we did 13.8% growth; and for the 9 months, 13.9%, so consistent growth over that -- the full -- the 9 months. For the EBITDA, we were at 3.3 for the quarter organic, excluding the IPO cost impacts from the previous year and the IBF underlying. And -- the IBF in India. And for the nine months, 9.6%. The interest-bearing debt, we actually bring in some debt onto the balance sheet now with the acquisitions, so as we start to increase the leverage slightly and so that increase increased up to 0.9x EBITDA. So thank you very much, and let me hand over for questions.
[Operator Instructions] We will now take our first question from Kristofer Liljerberg from Carnegie Investment Bank.
Three questions from me. First, could you give some indication what the acquisitions will contribute with the EBITDA for the full year, considering that the guidance is for organic earnings growth? And second question is, if you could comment a little bit about the EBITA and EBITDA margin of MaxCure. I think in the report you said the net profit line is pretty small, but I guess that's due to a lot of interest rates that you're paying as well. And the third question, it relates to this latest acquisition in Ukraine, if you could say how much that will contribute with the sales next year?
Joe, will you comment.
Yes. So in terms of acquisitions, if you're thinking in the range of -- I'm talking just here about the larger ones. If you're thinking in the range of sort of EUR 1 million, EUR 1.5 million in terms of the fourth quarter. So for India, I think India, in terms of foreign exchange for the Indian Rupee, is in little bit in the news recently, and I think yesterday, I was watching the BBC business news and they even had a little section in terms of the pressures in India due to the foreign exchange movements versus the dollar. So we don't have any foreign exchange exposure in terms of the investments. So we've gone through the basis there of making sure that we've got no foreign currency exposures. And I think given the recent movements and that's been reasonably wise, but that costs us money, so we -- I got quite a high cost for the cost of funding that we have in India. We have about EUR 22 million of debt within -- of Indian Rupee debt, with the Indian business to-date. In terms of the Ukraine.
But could you comment about the profitability margins in India?
Yes, I think we've discussed that before. We're running about the sort of the like, depending on the month, that it will be lower or above sort of the mid-teens in terms of the EBITDA margin. So we've been up to the higher-teen EBITDA margins in terms of the more active months and then below the midteens in the less active months. That's pretty much what we're seeing in the moment. I think as you see in terms of the top line growth, we're reporting slightly lower, top line growth than we did last time or last time around in terms that 9.2%, I think it was from top of my memory, for Indian rupee growth, nothing particularly special there. And we have a little bit of a maturity in terms of some of the center. And we have one center, we have some doctor changes and that has had an impact while those doctors have got up to speed.
Could I -- on the currency movements you mentioned. Do you have the debt you have for this business, is that in local currency?
That was the point I was trying to make, that's in local currency. We have no foreign currency debt or exposure in respect of that. And that's been a deliberate approach in terms of currency positioning in there given the expectations in currency volatility, but that's cost us. It's a relatively high cost of local funding.And then your last other question was in terms of Ukraine, in terms of expectations of revenues. We're paying for that something lower than 1x -- just below 1x revenue for that. We do expect some revenue synergies to come out of it, but the main payback for us comes through operation synergies.
We will now take our next question from Richard Koch from SEB.
First question is on the organic sales growth. Your midterm guidance is for 9% till 12% but for the past years you've been growing 13%, 14%, almost every quarter. But at least, do you see any -- I mean, without giving a guidance for 2019, but do you see any sign of -- or any reason for this growth that will slow down in the near term?
No, we don't, Richard, that's a very short specific answer.
Why is the guidance not higher?
Well, we -- the guidance is the midterm as we stated before, it's a 3-year guidance, so it's basically '17, '18 and '19. So we're approaching 2 of those 3 years. So basically, one year to go on that original guidance. And we're not revising it. If we're slightly above, I don't necessarily think that's a bad thing. Now we have this impact of the German reform on our short-term profitability and the fact that we guided specifically for earnings or earnings growth being lower in 2018 was always -- that impact is quite significant, but as you see, we didn't change our overall midterm guidance. So that obviously says that over the 3-year period, we're confident both on the revenue growth and the EBITDA growth as we have already stated it.
Just in respect of that, I think you've seen in these earnings announcements, it says that in the country now, you've got people talking about cost increases, and impacts in terms of the global economy and funds and da, da, da. So we have uncertainties out there as well. We have strong growth in the prepaid business out of Poland. As Fredrik talked about at the beginning of the call, what that means is that growth, we haven't recognized that in revenues yet. That's -- those increases are next year's revenues, if you like. So we have a very good visibility in terms of being able to see where our revenues are going to be. And we know that those are going to be strong in terms of going into next year. But there are other impacts potentially that come in, in terms of the economy and we are exposed to all of that. So I think that we're being reasonably sensible in terms of our guidance in that aspect.
Okay, on the conservative side then. Looking at probability, how much lower are margins in this quarter or the recent couple of quarters, due to the investments in new facilities that you're talking about? I'm trying to get at sort of what would margins have been, if you haven't invested for the future? What would a normalized margin would be?
Well, the point I was making, Richard, here is that the clearly, the level of scale of that business, you wouldn't expect our margins to decrease, year-on-year. It's a full-scale business so, perhaps you should even expect them to slightly expand. So the reason why we bring this up is to put this in context for you. So I think that's how you need to think about the sort of margin contraction that we report is driven by that.
Our value creation comes from retaining clients. We have about 98% retention in terms of our four core clients. We are growing we believe, faster than the market. And the key in terms of success, always for our business in this, and we've done this for quite some years is about making sure we retain customers. and where we've gone wrong before in the past is because we haven't invested in making sure fast enough -- in terms of making sure we've got the capacity to satisfy those customers needs when we come up to the busy periods. So that's really been our focus in terms of short-term rather than looking -- our focus has been looking more to that longer-term satisfaction and that longer-term ratios then on short-term performance.
Lovely, and that definitely makes sense. But my question was more -- what -- how much higher can the margins go then, when you're in a more steady state?
I think when we did the original road shows, when we did the original IPO, we were quite pointed about saying, we don't believe that there is any real room in terms to expand the business of increasing the margin, the contribution margin overall for this business area. So we may get some slight increases in a mid-longer-term increase, sort of like perspective. But nothing more than that.
Okay. And then Last question, regarding the German pressure -- or the pressure in Germany on volumes and lab tests. Have we seen the full effect of that yet? Or for how long do you think that's going to be extended?
That's the point I was alluding to here, Richard, that the -- we clearly saw the first part of that in the second quarter, and that's why we comment as we did midyear, we have certainly seen the full effect of that in this quarter, and we will still see some effects from this going forward. Now we are specific in writing in the report that it's too early to say that there has been a normalization in referral patterns, however, I made the comment here, that during the month of September, so the last month of the prior quarter and also October, which is about to close here, referral patterns are not yet back to fully normal, but they are significantly better than if we look at the totality of quarter 3. So the take on that is we're -- we are probably starting to see a normalization but it will certainly impact the last quarter of this year and it's likely to have still some impact the first quarter next year. But I'm not in a position to quantify that, but clearly, it will be around, that's for sure, for another 6 months probably.
Richard, just to come back and just as a recap in terms of what's happened here, for our audience online today. There was no intention of the actions in terms of reducing referrals. That was not what was intended by this process. What's happened is that it's got caught up in an unintended consequences, and the patients still need to be treated. The system still wants to make sure that those patients are treated. And I think in this normalization, what we are seeing is that the behavior in terms of doctors, the system changes that they needed in terms of adapting their IT system, the doctor practice systems is working its way through. We had the price cut, which was a pure price cut, which we expected and we planned for and budgeted for and that wasn't really an issue for us. So I think we're seeing this working through. We'll see where it ends up if we get full normalization.
We will now take our next question from Carolina from Deutsche Bank.
So I have 2 questions -- 3 questions. I'll start with 2 on MaxCure. So what is the net debt in MaxCure now? And is the growth you show, impacted by FX?
So yes, so they have around about EUR 22 million of gross debt. Cash, they operate in terms of -- there's not significant cash balances. So your net debt is not going to be significantly lower than that couple of million euros. In terms of foreign exchange, those numbers and figures that we alluded to the -- are local currency numbers, so there's no foreign exchange in that. We have some translation impact through the balance sheet in terms of through the -- our comprehensive income. So we have exchanged differences on translation of EUR 2.4 million, which we accounted for in the quarter, but the majority of that is actually Ukraine, Romania and a little bit on the Indian investment.
Okay. And then on, because I didn't hear what you said about the investments in the fertility business in India. So you invested EUR 10.9 million, for what period was that?
Yes, so EUR 10.9 million is the cash investment in terms of the original acquisition, which we did back at the beginning of Q4 2017. And then the subsequent money that we have invested in terms of rolling out the clinics. We opened now 3 clinics in the quarter, or just start of the quarter, and we have our newest start -- we started a new cluster in Hyderabad, so we have the first location now with the next week, we have formal inauguration of that center in Hyderabad. Just to remind you, where we have our clusters, we had Delhi, which is our almost established cluster; we still to continue to invest in terms of adding spokes onto that. We have up in the Punjab, our second cluster, and now we start up our third cluster in Hyderabad.
Okay. And then so how many clinics do you expect to have by end of 2018?
Our expectation is to have 20 clinics at the end of this year. We -- subject a little bit to regulatory approval and timings for those things. So it could be that it slips into next year, in terms of those regulatory to meet that target. But we continue to roll out clinics. We see that the oldest established ones are meeting their targets and objectives. I think you see that a little bit in terms of the profit number -- the loss number rather that we report for the quarter, which is down on previously reported ones. Our expectation was that to be higher that we had the centers opening a little bit quicker. So that's not necessarily a reflection of, that the -- our ambition has changed or anything. It's more of reflection in terms of timing of the opening of the new clinics.
[Operator Instructions] There appears to be no further questions at this time.
All right, well, thank you all, as always, for joining and listening to us. And we look forward to, if not seeing you before, so talk to you in 3 months time again. So thank you all for listening.