Capio Annual Report Capio Annual Report 2014 2014 Quality, compassion, care Kvalitet, medkänsla, omsorg Qualité, compassion, responsabilité Qualität, mitgefühl, fürsorge Contents This is Capio flap Capio is a leading, pan-European healthcare 2014 in brief 1 provider offering a broad range of high quality Comment by the President and CEO 2 medical, surgical and psychiatric healthcare Strategy and development 4 services in four countries through our hospitals, Healthcare in Europe 6 specialist clinics and primary care units. In The Capio model 12 2014, Capio’s 12,3571 employees provided The basis 14 healthcare services during 4.6 million2 patient The method 15 visits across our facilities in Sweden, Norway, The practice 16 France and Germany, generating net sales of Medical quality 18 Capio’s financial model 22 MSEK 13,200. 1 Number of employees as full-time equivalents on average during the year. Business overview 26 2 Number of inpatient and outpatient visits. Capio Nordic 28 Capio France 35 Capio Germany 38 Employees 40 Code of Conduct 42 European Works Council 43 Contents Financial Reports 44 Administrative report 45 Group Financial reports 54 Accounting principles 61 Notes 69 Parent Company Financial reports 91 Accounting principles 95 Notes 96 Auditor’s report 100 Definitions 101 Group Management 102 Board of Directors 104 History 106 Contact 106 Cover photographs, clockwise: Capio City Clinic Helsingborg Söder, Sweden Capio St Göran’s Hospital, Sweden Capio Geriatrics Dalen, Sweden Volvat Oslo Sentrum, Norway Capio Clinique Sainte Odile, France Capio St Göran’s Hospital, Sweden This is Capio Mission Cure. Relieve. Comfort. We have a mission: to cure, relieve and comfort anyone seeking medical care from Capio. This is also what is stated in the oath created around 2,400 years ago by Hippocrates, the father of medicine. Modern medical developments mean that more and more diseases can now be cured, or at least eased. At Capio, we are doing everything in our power to make the most of this development. We use all the knowledge and experience of our staff to ensure that new advances benefit Vision patients as quickly as possible. New, improved methods and procedures are only viable when they are implemented The best achievable in day-to-day medical care. There are times when a cure is impossible and relief is quality of life merely temporary. In these cases, comfort is an important part of the care offered. We must be able to see the person for every patient. behind the illness; see their anxiety and sorrow, and do every thing in our power to support them. It is important to The aim of all healthcare work is to ensure the best remember this personal aspect of medical care in the face achiev able quality of life for each and every patient. of the advanced technology used today, not to mention the Many make a full recovery, while others have the thousands of sophisticated treatment methods that are part chance of a more normal life. of modern healthcare. A patient’s self-esteem and dignity shall also be respected and reinforced even as his or her life draws to a close. Our key drivers are quality, compassion and care. Values Quality. Compassion. Care. When we require medical care, we are vulnerable and perhaps helpless, or at least in need of assis- tance. We may also have a limited insight and knowledge of our illness and how best to treat it. This places a heavy burden of responsibility on the healthcare service and its staff, far beyond the responsibility that applies to many other activities and situations in life. The foundation for Capio’s activities is three core values to manage this respon- sibility and to achieve the best achievable quality of life for every patient. A pan-European footprint Capio Nordic – Norway 6 medical centers 4.6 2 specialist clinics million patient visits1 12,357 2 employees Capio Nordic – Sweden 1 emergency hospital 2 local hospitals 27 locations for specialist care 23 locations for psychiatric care 13,200 77 locations for primary care MSEK net sales Capio Germany 5 general hospitals 4 specialist clinics 2 hospitals with rehabilitation and care facilities 7 outpatient clinics (MCC) Capio France 8 emergency hospitals 12 local hospitals 3 specialist clinics Total net sales 2014 Capio Group MSEK 13,200 – share of net sales 2014 in Capio’s segments Capio organizes its business in three3 opera- tional segments: Capio Nordic (Sweden and Norway), Capio France and Capio Germany. 54% 37% 9 % The segments provide a wide range of healthcare services and the organization is structured to facilitate the provision of healthcare at the most efficient care level for Capio Nordic Capio France Capio Germany each patient. 1 Number of inpatient and outpatient visits. 2 Number of employees as full-time equivalents on average during the year. 3 In addition, there is the segment Other, which includes the UK business up until divestment in July 2014 (consolidated in the Group’s accounts through June 30, 2014) as well as holding companies. 2014 in brief 2014 in brief Operational development • Capio continued to implement modern treatment methods – Modern Medicine – generating higher quality and productivity. • Strong development in shifting patient volumes from inpatient care to outpatient treatment in France driven by the implementation of Modern Medicine and Rapid Recovery. • Capio continued to deploy a quality measurement model throughout the entire Group in order to systematically define, measure and follow up medical results and patient satisfaction. • Capio St Göran’s Hospital in Stockholm, Sweden, continued to improve performance in line with the tender agreement with Stockholm County Council. • The proximity care platform fully integrated in Sweden resulting in primary care centers at 77 locations in 12 county councils. • Completion of the sale and leaseback transaction (SLB transaction) of seven hospital properties in France strengthened the balance sheet for continued growth. Financial development January – December 2014 • Net sales MSEK 13,200 (12,420). • Organic sales growth 4.0% (2.3) and total sales growth 6.3% (19.2). The organic sales growth was positive in all segments and was mainly related to volume as price increases were limited. • Operating result (EBITDA) MSEK 1,102 (1,084) and operating margin 8.3% (8.7). Adjusted for the French SLB1 transaction and at comparable exchange rates EBITDA increased with MSEK 61 (5.5%). • Operating result (EBITA) MSEK 645 (608) and operating margin 4.9% (4.9). Adjusted for the French SLB1 transaction and at comparable exchange rates EBITA increased with MSEK 68 (10.9%). 1 Sale and leaseback CAPIO HOLDING AB ANNUAL REPORT 2014 1 Comment by the President and CEO In the lead of Modern Medicine and ready for growth Capio has provided healthcare to patients since 1994 becoming a leading pan-European healthcare provider. We are driven by our values Quality, Compassion and Care, striving for the best achievable quality of life for every patient. Our offering spans a wide range of medi- cal, surgical and psychiatric healthcare services in four countries through our hospitals, specialist clinics and primary care units. Capio’s medical strategy is to drive quality improvements by implementing new, evidence-based methods that reduce the physical strain of treatment, helping the patient to make a faster recovery (“Rapid Recovery”). This also enables shorter lengths We have built a solid knowledge for our medical strategy in the of stay or even just over the day treatment, improved productiv- Swedish healthcare system, an early adopter of DRG based ity and better use of resources for the benefit of patients, reimbursement, which has also spearheaded the ongoing tran- employees and society. sition towards quality-based remuneration systems. Subse- In 2014, we received 4.6 million patient visits provided by quently, we have integrated the medical strategy across our our more than 12,300 employees across the Group’s facilities Norwegian and French operations and are today the leader in in Sweden, Norway, France and Germany, generating net sales the implementation of Rapid Recovery in France. We are cur- of MSEK 13,200. rently implementing the Modern Medicine strategy in Germany, a healthcare system that recently has started the transition The healthcare systems have changed towards increased focus on both quality and productivity per- Over the past decade, Western European healthcare systems formance. have evolved at an accelerating speed towards increasingly adopting performance based reimbursement structures, incor- Healthcare in Europe porating quality performance as a metric determining reim- Western European healthcare can benefit from quality provid- bursement, and driving structural changes to involve private ers of healthcare with platforms at scale, as there is a strong providers in developing the healthcare system. This transition and steadily increasing demand for healthcare services, and has been driven by the increased pressure on Western Euro- large productivity and quality differences between countries. pean countries to provide even higher efficiency including both Capio recognizes three main European challenges: the quality and volume aspects of delivery. Examples include • Unsustainable cost development in healthcare due to grow- the transition from per diem based to performance based ing demand, driven by an ageing population and the medical (DRG, Diagnosis Related Groups) reimbursement (UK, Ger- development with ability to treat more conditions many and France),