Medicover (MCOV) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 19.8% year-over-year to €527.8m, with organic growth of 17.4% and strong volume gains in both Healthcare and Diagnostic Services.

• Operating cash flow reached a record €240.2m on a rolling 12-month basis, up 18% from the prior year.

• Both Healthcare and Diagnostic Services delivered double-digit organic growth and margin expansion, with Poland and India as key growth drivers.

• EBIT dropped to €6.7m due to a €16.4m impairment charge on Nordic fertility and German dental businesses, resulting in a net loss of €5.2m for the quarter.

• Announced CFO transition, with Joe Ryan stepping down and Anand Patel as successor.

Financial highlights

• Q3 revenue: €527.8m (+19.8% y/y); organic growth 17.4%.

• Q3 EBITDA: €73.9m (+14.1% y/y), margin at 14.0% (down from 14.7%).

• Q3 EBIT: €6.7m (down from €18.5m), margin at 1.3% (from 4.2%), impacted by impairment charges.

• Operating cash flow up 25% to €72.3m for Q3 and up 22% to €197.7m for nine months.

• Free recurring cash flow up 35% for both the quarter and nine months, reaching €88.9m for nine months.

Outlook and guidance

• On track to achieve 2025 targets: organic revenue above €2.2bn and adjusted organic EBITDA above €350m, with leverage below 3.5x.

• Margin expansion expected as new hospitals mature, especially in India.

• Price growth expected to moderate in 2025 as inflation eases, but remain above historical levels.

• No material negative impact anticipated from German reimbursement reforms in 2025; margin improvement expected.