Financial informations

It is with great pride that the Ramsay Santé Group has continued to play a critical role in Europe caring for COVID patients and preparing the vaccination of our fellow citizens. Our financial results are solid, with an improved financial EBITDA margin at 16.0%, stemming from a solid organic growth, a Capio integration delivering synergies above expectations and supported too by taking into account Covid subventions of extra costs that were incurred during the first wave (March-May 2020). It demonstrates the pertinence of our current strategic move as a global health European operator, orchestrating patients’ pathways, in and out of hospitals. Thus, out of 9.2 millions of patients we took care of in FY 2021, 6.3 millions were out of hospitals and digital patients.

Pascal Roché, Chief Executive Officer of Ramsay Santé

These preliminary accounts were presented to the Board of Directors at its meeting held on 25 August 2021. The Audit procedures are in good progress.

The final consolidated financial statements for the year ended June 2021 will be approved by the Board of Directors at its meeting on 23 September 2021.
 

Synthetic results

In €M	From 1July 2020 to 30 June 2021	Variation	from 1July 2019 to 30 June 2020
Turnover	4,022.6	+7.4%	3,746.2
EBITDA (IFRS 16)	643.8	+17.7%	546.8
Current Operating Result	272.0	+47.3%	184.7
As a % of Turnover	+6.8%	+1.8 point	4.9%
Operating Result	250.6	+42.2%	176.2
Net income, Group share	65.0		13.4
Earnings per share (in €)	0.59		0.12

 

Breakdown of revenue by operating segment

In €M	from 1July 2020 to 30 June 2021	from 1July 2019 to 30 June 2020	Variation
Île-de-France	1,000.8	932.7	+7.3%
Auvergne-Rhône-Alpes	561.7	508.1	+10.5%
Nord - Pas de Calais - Picardie	380.6	352.8	+7.9%
Provence Alpes Côte d'Azur	161.4	155.5	+3.8%
Bourgogne Franche Comté	107.4	99.2	+8.3%
Other regions	645.0	563.2	+14.5%
Other activities	10.3	53.0	-80.6%
«Nordics»	1,155.4	1,081.7	+6.8%
Published Turnover	4,022.6	3,746.2	+7.4%
Including: - Revenue on a like-for-like basis and at constant exchange rates	3,945.8	3,644.5	+8.3%
- Changes in scope of consolidation and exchange rates	76.8	101.7

Note: the table above details the contributions of the various operating segments to the Group's consolidated revenue. 

Significant events of the financial year:

Pandemic-related health crisis COVID-19

The financial year ending 30 June 2021 was significantly impacted by the continuing health crisis linked to the global COVID-19 pandemic in all countries where the Group operates.

In France, private hospitals have throughout the financial year maintained their action plans to fight the COVID-19 epidemic and their investment, in conjunction with and in support of public hospitals, according to the national health system.

In compliance with ministerial directives, relayed by the Regional Health Agencies, private clinics and hospitals have cancelled their non-urgent medical and surgical activities to cope with the first three waves, in order to free up capacity in hospital accommodation and technical facilities to meet local health needs. Staff and private doctors have been mobilised and integrated into the plans to prevent and fight the epidemic.

As the health situation evolved, the activity of private hospitals has been able to resume gradually but still under constraints, in compliance with government or regional directives and depending on local health conditions. The acceleration in the spread of the virus during the year during the second and third wave has necessitated further adjustments in the programming of hospital activities at our sites. The financial impacts are diverse and variable depending on the specific situation of each facility. They mainly concern:

• Loss of earnings (loss of healthcare turnover and/or ancillary income) due to deprogramming and reduced activity;
• Additional costs incurred to deal with the crisis, including the following:
  • Medical purchases (medicines and medical devices),
  • Payroll (carers) and incidental expenses (travel expenses, staff protection costs, …),
  • Investments or rental of equipment.

a) Cash advances:

To provide short-term support to healthcare institutions, and to avoid any cash shortages, a system of repayable advances was introduced in March 2020 as a completely exceptional and transitional measure. Thus, at their request, private health facilities can benefit from a reimbursable advance on subsequent billings to the Compulsory Health Insurance Scheme. This adapted advance system was still in place on 30 June 2021.

At 30 June 2021, advances received by the Group are recorded as liabilities on the balance sheet, for a total amount of €121 million euros net of accrued income yet to be received.
 

b) Revenue guarantee:

- 2020 revenue guarantee – 6 May 2020 decree

This guarantee is put in place for all activities carried out by all health care institutions, which are normally financed in whole or in part on the basis of activity output.

The guarantee covers revenues for the period March 2020 to December 2020. The principle is to guarantee health care institutions, for this period, a minimum revenue (from the social security insurance scheme) at least equal to the revenue received for 2019 activity (prorated over 10 months to have a comparable period). The scope of the guarantee concerns:

• Medicine Surgery and Obstetrics (MSO): health insurance receipts (excluding fees) on hospitalisation services in accordance with Article R.162-33-1 (GHS, daily supplements, GHT, ATU, SE...), remuneration of salaried doctors invoiced by the facility and the treatment of patients benefiting from State Medical Aid and Emergency Care,
• Follow-up and rehabilitation care (FRC): health insurance receipts from hospitalisation benefits under Article R.162-31-1 and the remuneration of salaried doctors invoiced by the facility (« La Dotation Modulée à l’Activité » has its own guarantee mechanism) excluding the fees of private practitioners,
• Mental Health: health insurance receipts on hospitalisation benefits under Article R.162-31-1 and the remuneration of salaried doctors invoiced by the facility, excluding the fees of private practitioners.

The guarantee level is calculated on the basis of 2019 revenues (excluding IFAQ grant quality funding) and takes into account:

• the unfreezing of the prudential coefficient, which is passed on to healthcare institutions, at the end of 2019,
• specific situations (grouping of facilities, transfer of activities, …) of certain facilities whose 2019 activity may have been impacted,
• price effects:
  • MSO: +0.2% excluding External Consultation Acts;
  • Hospitalisation at Home : +1.1%;
  • Follow-up and rehabilitation care (FCR): +0.1%;
  • Mental health: +0.5%.

The group facilities received in May 2021 from the Regional Health Agencies (ARS) on which they depend the initial “guarantee regularisation” amount, being the difference, if positive, between the guaranteed revenue and the corresponding cumulative billings.  A final true-up of this net amount of “guarantee regularisation” will be notified in March 2022 pursuant to the legislated mechanism.


- 2021 revenue guarantee – 13 April 2021 decree

A similar but separate guarantee has been enacted to prolong the government support to healthcare facilities’ revenue after the expiry of the initial scheme on 31 December 2020.  A new decree issued on 13 April 2021 essentially applied the same revenue guarantees for a new 6-months period from 1 January to 30 June 2021 to the facilities performing the same activities defined in the first scheme.The revenue guaranteed corresponds to 6/12th of the 2020 billed revenue, inclusive of the 2020 revenue guarantee if any, and indexed as follows:

• 2/12^th is indexed at 0,2% corresponding to the base indexation from the 2020 ONDAM,
• 4/12^th is indexed at a rate corresponding to the increase in tariffs applied from 1 March 2021 for the relevant activity.

d) Ségur de la Santé:

- Mechanism:

Further to the government’s commitment at the start of the pandemic to upgrade the status of professionals and managers in health facilities and EHPADs (aged care facilities), negotiations led to the signing of the Ségur de la Santé agreements on 13 July 2020 by the Prime Minister, the Minister of Solidarity and Health, as well as by a majority of representative union organisations.

In particular, these two agreements dedicate €7.6 billion a year towards salary increases for medical professions in health and medico-social facilities in the public and private sectors.

This translates into:

• €183 net monthly increase for medical professionals in public and private not-for-profit health facilities and EHPADs (+€160 net/month for the private for-profit sector), i.e. 1.5 million professionals excluding doctors that benefit from specific agreements;
• €35 net per month on average in additional remuneration for staff in contact with patients: care assistants, nursing staff, rehabilitation and medical-technical staff thanks to the upgrading of their pay scales;
• A collective commitment bonus increased to €100 net per month to reinforce team projects aiming at improving the quality of care and enhance collective commitment;
• Improvement of the organisation of working time by giving more room for manoeuvre to actors in the field, and dedicated funding to develop local agreements and pilot projects and better pay for overtime;
• Development of negotiation and promotion of social dialogue in facilities.

Thus, as far as the private for-profit sector is concerned, this agreement provides for a historic wage increase of €206 gross per month (or €160 net per month) to be paid to the 150,000 medical employees and midwives in private hospitals and clinics.

The salary increase was introduced in two steps (as for the public). The first payment, corresponding to half of the total increase (€80 net) was paid in November 2020 with retroactive effect to 1 September 2020. The second step occurred in December 2020 with the payment of an additional €80. The additional €35 increase in remuneration will start to apply sometime during the next financial year. 

The Group has been compensated for the real overall impact of these wage increases either through a specific tariff adjustment for the MSO activity from 1 March 2021 and through subsidies for MSO until end February 2021 and for the entire period for the Follow-up, Rehabilitaion and Mental Health activities.


- Impact on the financial statements at 30 June 2021:

As of 30 June 2021, the grants recognised in respect of the financing of the Ségur de la Santé amounted to €34,0 million and are classified in the income statement under "Other operating income". The 2021 Ségur costs of the MSO facilities are funded through a dedicated 6.2% increase of their tariffs applicable since 1 March 2021 and accounted for as turnover. These incomes offset the actual costs of salary increase granted to all eligible populations.
 

Activity and turnover:

In the financial year ended June 2021, Ramsay Santé Group reported a consolidated turnover of €4,022.6 million, compared with €3,746.2 million for the period from 1 July 2019 to 30 June 2020, up 7.4%. For information, the financing guarantee scheme in the Group's financial statements has no impact on published revenue as it is recognised in the income statement under "Other operating income".

On a like-for-like basis and at constant exchange rates, the Group's sales increased by 8.3% with one additional working day. 

Changes in the scope of consolidation is due to the divestment of the German business combined with acquisitions and other divestments made during the financial year. 

For the financial year ending 30 June 2021, the total activity of Ramsay Santé's French entities was impacted by the consequences of the COVID crisis. Main effects were related to the cancellation of certain scheduled medical and surgical activities during both wave two and three but also from limiting the number of patients per room. In total the number of patient admissions increased to last year by 7.0%. The breakdown by business line is as follows:

• +8.8% in Medicine, Surgery and Obstetrics
• -6.7% in Follow-up Care and Rehabilitation
• +5.9% in Mental Health

As part of its public service missions, the Group recorded a 3.9% drop in the number of emergencies over the past year, with around 650,000 visits to the emergency services in our establishments in France. The drop was mainly a consequence of the Covid-19 pandemic which impacted the willingness of patients to seek care.  

Organic sales growth in the Group's Nordic activities for the financial year ended 30 June 2021 was +9.4% compared with last year. Organic sales growth in the Nordics was positively impacted by both greenfields/new care contracts, additional work in relation to covid-19 testing/vaccination and a continued positive organic sales growth in the underlying business.  

Results:

EBITDA reached €643.8 million for the financial year ended 30 June 2021, up 17.7% on a reported basis. Group EBITDA as of 30 June 2021 includes €103.0 million related to the revenue guarantee scheme described in the paragraph "Significant events of the financial year" above. EBITDA further also include cost compensations related extra incurred by the businesses in both France and Sweden. EBITDA development was also positively impacted by the underlying business growth as well as from the realization of synergies above plan for now fully integrated Capio acquisition. On a like-for-like basis, at constant consolidation scope and exchange rates, EBITDA increased by 15.3% during the year. 

The EBITDA margin as a percentage of sales was 16.0%, up from 14.6% for the same period last year on a reported basis. On a constant scope and considering exchange rate changes the EBITDA margin improved from 15.0% to 16.0%.  

Current operating result amounted to €272.0 million between 1 July 2020 and 30 June 2021 (or 6.8% of revenue), up 47.3% over the previous financial year demonstrating solid leverage on the improved sales and EBITDA growth. 

Other non-current income and expenses represent a net expense of €21.4 million for the period ended 30 June 2021, consisting mainly of impairment of fixed assets and acquisition/divestment related costs. From 1 July 2019 to 30 June 2020, other non-current income and expenses represented a net expense of €8.5 million.

The cost of net financial debt amounted to €123.2 million for the financial year ended 30 June 2021, compared with €130.2 million the previous year. It comprises interest on the Senior debt and, in accordance with IFRS 16, the Group recorded an additional financial interest expense of €71.1 million related to the lease debt. As the group refinanced the debt during the financial year previously capitalized borrowing costs of €11.4 million was expensed in the income statement. 

Group’s share of net profit reached €65.0 million at 30 June 2021 versus €13.4 million for the period from 1 July 2019 to 30 June 2020.