Medicover AB (publ) (MCOVB) Earnings Call Transcript & Summary

[ Welcome to ] Medicover Q1 2025 Report Presentation. [Operator Instructions] Now I will hand the conference over to the speakers; CEO, Fredrik Ragmark; and CFO, Anand Patel. Please go ahead.

Good morning, everyone, and welcome to the first quarter 2025 results presentation. And it's with great pride and joy we present this report. In fact, I think it's probably the best report we have presented possibly with the exception of 1 or 2 COVID-doped pandemic reports. But in terms of the broad business, it is definitely the best report we have published since we listed the company now 8 years ago. It's a combination of factors. We see continued strong top line growth. Organic growth was more than 14%. Most importantly, the further down the profit and loss statement, you see the more operational leverage you see coming down in margins expanding. EBITDA margin up 1.6 percentage points, EBIT margin up 2.4 percentage points, and it goes on as you flow through down the profit and loss statement, which is exactly what we have been focused on. It is exactly what we have been reporting to you over the past 4 or 5 quarters. It is just that it -- as the numbers get bigger, it becomes a bit more pronounced and that's really what we see here. Poland continues for Healthcare Services to be really very strong. Now India had a particularly weak quarter and we'll speak a little bit more about that later on. But I think it's noteworthy to see that we push through these results, both growth and margin expansion despite actually, you can argue a disappointing quarter out of one of our core markets. So more about that a bit later. Diagnostics, very strong. Again, remind you that half of Diagnostics is Germany, where a good chunk of that is public reimbursement where we get no price compensation. But despite that, with all the initiatives going on and actually really strong growth in the German private pay revenue and really good performance. Outside of Germany in DX, we see really good growth, double-digit organic growth out of DX as well as margin expansion. Now that's flowing through, as you've seen in the last quarters in really good cash generation cash flow. We've always had good cash flow. It's just that the number starts to get bigger, so the amounts become bigger. And then also I'm really very pleased and happy to be able to report to you that on a quarterly basis, i.e., we annualize the first quarter, we have achieved the year-end '25 financial targets that we set a little bit more than 2 years ago. So we're -- on an annualized basis, we're trading on around EUR 2.3 billion of organic revenue. We're just a tad above EUR 350 million organic adjusted EBITDA and we're also trading above those 2 additional targets we added a year ago, adjusted EBITDAaL of at least EUR 235 million and EBIT of at least EUR 140 million. So that's after 9 quarters out of 12, so 3 quarters of the period. And for all of those that attended our Capital Markets Day, I think you very well remember that they were certainly not unambitious targets. So I think that is -- that's a super performance. Then if we go on to our standard graphic pages, the revenue split is pretty standard. What's worthwhile to point out there, you see Poland has now grown into 52% of revenue on the back of its just sort of stellar growth performance over a longer period of time. You see 22% growth out of Poland, 7% out of Germany, which is not bad, in fact, because you said you have relatively no price growth and relatively little volume growth in the public pay segment. So the private pay segment is growing really well, 19% out of Romania, and you see basically flattish 1% out of India. And I take the opportunity to comment on that here now. So India had a strange first quarter. We were trading pretty much on plan in January and first week of February. And then it was pretty much a cliff fall for the second half of February and March. And I think most people in India experienced the same thing. So a very weak consumer sentiment. Then we have around 10-ish percent of medical tourism in our business in India and we got no visas issued. So that sort of came to a halt. We closed down one underperforming unit, et cetera. So there were a number of factors explaining that fact. But there's no other way of expressing the first quarter in India than it was a disappointment. Now I think the most important of all is that it was an exceptional quarter. Now April is pretty much over like tomorrow and we are back and trading significantly double-digit revenue growth again in April and that we expect to continue going forward, which is important. So that is India. We then flip on to the profit slide. So very pleased with how the volume growth is turning into higher margin and hence, increased profitability. So EBITDA up to EUR 86.5 million, 29% growth and even 15% margin. So good growth, 150 basis points on last year. And the adjusted number for the first time is above EUR 90 million, so EUR 90.6 million, adjusted EBITDA, 15.7%. So good, strong number. Adjusted EBITDAaL, up over EUR 60 million, I think, also for the first time effectively. And then I already mentioned, EBIT is almost doubling, not fully doubling, but not far from it from EUR 19 million up to EUR 36 million, so a margin of 6.2%. So significant margin expansion, again, very healthy, good cash flow. And then, of course, the biggest expansion, if you wish, comes on EPS, obviously, because it's the smallest number. So EPS more than tripling effectively from just above EUR 0.04 to above EUR 0.13. So I think a super performance. Then if we go to Healthcare Services. So good growth, running above EUR 400 million, I think, for the first time, so EUR 403 million of revenue, 18%, up of which 15% was organic and just short of 9% of that being price. So I remind you that price is very important to us that we are able to continue to push price growth on to our consumers to manage, although cost inflation has certainly come down and we are in a much better position than a couple of years ago, but one should be also very clear on the fact that it's not gone. So it's not normalized. So it's really important that we are able to keep seeing that we can continue to raise pricing, although at lower levels than what you saw last year. So fee-for-service here is half of the division, up 14%. And I made the point before that performance is pretty much stellar across everything we do in Poland. It is also good actually out of Romania, relatively speaking, compared to last year. We still have loss-making units in the large hospital in Bucharest, but Romania is pushing on. I have commented on India. The member growth may look a bit soft. I remind you that as we announced end of last year that we are exiting the Hungarian business and as we do that, that happens gradually throughout the first 6 months of the year. So we had a not insignificant negative member movement out of Hungary as part of that exit process here in the first quarter, which contributed quite significantly to that lower-than-normal member growth number. If we then switch to the earnings profile for Healthcare Services, strong margin expansion, in fact, super strong margin expansion. You see EBITDA up more than 2 percentage points. EBITDAaL even more, 2.3 percentage points. EBIT significantly more than doubling in terms of absolute amounts and almost -- also doubling in terms of the margin, you see 3.4% to 6.7%. So lots of operational leverage coming through here. And I remind you, this is despite the Indian business, which is significant in this division, not firing on all cylinders in this particular quarter. So there's still room to improve this situation significantly as we progress. You actually see that in this next bullet point where we -- you have seen that we have reported a number of times now when we take the 6 most immature hospitals, 5 of them being in India and one of them being the large recent addition in Bucharest, you see that we had an EBITDAaL loss for the quarter of EUR 3.9 million. Effectively, that's EUR 600,000 worse than in the prior quarter, which is purely driven by the point I made on India. In fact, Romania is improving the situation. So the loss is coming out of the Indian hospitals on the back of lower revenue than we had in the prior quarter. But again, I reiterate that's going to reverse into the second quarter. So you don't need to worry about that going forward, but one should recognize that in this quarter. The medical cost ratio, which is then the most important cost category in this business, which is, i.e., all of the cost of delivering the medical service you see is actually down quite significantly, 2 percentage points, which is a combination of factor; mix, price growth, of course, and a lot of very good hard work of our management team to manage utilization and costs. You have the standard Indian picture. Nothing has changed in that since we showed this the last quarter. Now we have -- to remind you, we have 2 more units coming up in India over the coming 12 months, both of them in the main Hyderabad market. So one will open in the summer. Both of them are large units. And the second one will open towards the end of the year or beginning of 2026. Then flipping to Diagnostic Services. Again, I made the point before, I think good revenue growth, good momentum in this business, EUR 182 million, so just short of 12%, all of being organic growth, where price is just above 3% of this. So slightly less than half of the price component in Healthcare Services. Again, you have heard me say many times before, that's explained by the fact that half of this business is in Germany, where there's very little price compensation. So basically, outside Germany, we have been able to adjust prices very much in line with how Healthcare Services have been able to. So good performance pretty much across all markets here really. You see a relatively benign growth in lab tests. We have done fewer, if you remember, last year around, we did quite a few almost 3 lab tests in Ukraine for the public insurance house. We still do some of those tests, but we did significantly fewer this quarter around, which explains the much lower lab test growth vis-a-vis revenue growth. Fee-for-service here is a full 70% of the division and that was up 16%. I remind you, we talked a lot about end of last year about the pricing reform, the additional pricing reform, I should say, that came into force in Germany in January. We have assumed a worst case scenario for us and that's what we account for. We will know really in early July how the different lender KVs treat this and it may be that we get some upside. Time will tell. At least we know it's not going to get any worse than what we are assuming currently in our numbers. You can also see a little bit what I'm talking about on these 2 pie charts to the right, where you see the upper pie chart, you see Germany is growing 6%. And below, you see public money is growing 3%. And basically, pretty much all of that public money is in Germany. So that means that the other half of the 6% in Germany is growing double the 6%, if you see what I mean. So that illustrates the fact that our private pay German business is actually growing very nicely. Now this resulted in good flow-through to increase profitability. So EBITDA was up very well. So a bit more than 1 percentage point, just short of 20% margin. EBITDAaL likewise, just short of 16% margin. And EBIT then grew a bit more. So a margin of just above 12%, up 28%. So good results out of this. And again, it's not split out here, but I think I made that comment last quarter around, I can make that comment again that actually Germany, where there's a lot of focus obviously on this price reform, et cetera, our total German business in Diagnostics is growing its margin. So relative to first quarter last year, despite all the pressures around us, we are up around 1 percentage point in terms of the German margin. Then we have 2 post-closing events that we just want to comment on. We made 2 acquisitions that we had sort of hinted to you about before in the previous quarter. These closed just early in April. They had been -- both of them had been in competition clearance for quite some time. So we were very happy when they finally got released. So in Diagnostics, you may be familiar with the relatively large lab group, SYNLAB that used to be listed in Germany. Now again, it's a private company and they are selling off a number of assets now and we had an opportunity to pick up this set of markets and this is really a synergy play for us. So we have tremendous synergies, particularly in Romania, but also in Turkey. And then they have some really nice businesses on some of the other markets in the Balkans. But you can see that we stated in the release that we expect already within 1 year to have grown their current profitability at least 50% and within at least 2 years, we have doubled the current profitability levels from synergies really. So we feel we have all of that under control. So we believe this is a very good very strategic and certainly very accretive acquisition for our shareholders. Then in Healthcare Services, we build further on the tremendous growth and positioning we have in Poland by adding a very well-run fitness operator to our network. And then I remind you, we sell these sports cards in Poland alongside our health care cards to the B2B corporate clients. And then they are buying either stand-alone health care. They may be buying stand-alone sports. But increasingly, they are buying a mix of the 2, which is really what we want because, of course, the more -- customers also go and look after themselves at the gym, the more healthy they become, so the less illness they will contract and hence, the synergies are both in distribution and cost for us. So we expect this to be a very good acquisition. We think it's priced reasonably. We will have good synergies on the overlap that I was just talking about. And it also will be very accretive to our results. And with that, I think I hand over to Anand for the financial review.

Thank you, Fredrik. Very pleasing to talk about another strong quarter for us. And also, I would say, a kind of continuation of the story of recent quarters that we've spoken about. So as per usual, I'll talk about EBITDA after lease costs as lease costs are a key part of our cash flow. So if you look at group level, group EBITDAaL grew to EUR 60.4 million. That's a growth of 39% with margin accretion of 1.8%. And the pleasing thing is and similar to what I said in Q4, the story is consistent across both business units. So we have strong absolute growth across both business units, both in price and in volume and margin accretion -- by margin rate accretion, sorry, across all businesses as well. In Healthcare, in particular, so we had EBITDAaL of EUR 40 million, so a margin rate of 9.9%. So that was up 2.3% year-on-year. So really strong performance there, particularly as Fredrik mentioned, given that the India performance was below slightly better expectations, but back on track. In Diagnostics, again, despite the news about Germany, et cetera, Fredrik mentioned that we grew volume, we grew price through growing our fee-for-service business and also we grew our margins. So overall EBITDAaL of EUR 28.7 million in DS with a margin rate up 1.2% year-on-year to 15.7%. So if we look at Page 16, a key thing for us this quarter, I guess, was a real improvement in our leverage levels. So our loans payables were broadly unchanged from Q4. And clearly, our EBITDA grew year-on-year. So that resulted in our leverage dropping to 3x from 3.4x, which we had in Q4 last year. I will talk about future projections when we get to the target slide. But for now, a really strong performance from a leverage perspective. In terms of our effective tax rate, it was 28% in Q1, in line with our expectations, a bit higher than last year, but that's due to the timing of tax settlements in Poland. Again, a strong performance from a cash perspective, again, reiterating what Fredrik said earlier. So net operating cash was up 11.6% to EUR 87.5 million, predominantly driven by EBITDA. And free cash flow, which in essence is cash flow after maintenance CapEx but before investment CapEx, that was up year-on-year as well to EUR 44.2 million. And the final line, I'll talk a little bit about. So ROIC was up pleasingly versus what we reported in Q4. So in Q4, we're at 6.7%. In Q1 this year, we're at 8.3%. And that's where you can really see the benefit of the EBIT accretion that we're seeing year-on-year. So Fredrik mentioned that EBIT was up nearly doubling in Q1 and that really helps our ROIC level. So we're pleased to see that. And hopefully, that's a manifestation of what will happen for the rest of the quarter, rest of the year, sorry. Looking at CapEx. So from a CapEx perspective, we spent EUR 28 million in Q1, which is broadly the same as last year. As a percentage, it was 5% of revenue. Previously, we've guided that our CapEx spend in FY '25 will be between 5% to 6%. So a bit timing. We'll spend a little bit more later in the year. From a medical space perspective, a small accretion in the month, but broadly unchanged at 915,000 square meters. And then you have the 2 charts that we normally show at the bottom of the page. So on the left, you can see that actually similar, let's say, to last year's cash flow, we see a spike in Q1 from a free cash flow perspective and clear headroom between that and what we've invested in our business from an investment CapEx perspective. On the right, you can see the Q1 breakdown of growth and maintenance CapEx year-on-year. So the first block is the spend in Q1 FY '25. You can see the split is 53% growth and 47% maintenance. That's kind of just a timing thing. So going forward and we project for the full year, we'll be back to about the 60-40 levels that we've seen in prior years in terms of split with 60% being on growth. And finally, talking about targets. So very pleased in Fredrik's final quarter as CEO to say that actually, he's mentioned this already. Our run rates for Q1 extrapolated forward imply that we are going [Technical Difficulty].

We are having a little technical issues, but we are solving them. Just be patient and wait a little.

Hello. Hopefully, you can hear us now. Apologies. I think there was a slight technical issue, right. So I'll talk about the financial targets page starting from scratch, assuming you didn't hear me the first time. So Fredrik mentioned in his opening slide that our run rate is on track to beat all these targets. It's a message we've said in the last 2 quarters and we're pleased to kind of reiterate that in Q1 this year. So just to confirm, we will exceed our organic revenue target of EUR 2.2 billion. We expect strong performance for the rest of the year. We expect to exceed our organic EBITDA target of EUR 350 million. You've seen positive and consistent stories over the last quarters in terms of price and volume improvement and margin accretion. So we expect to see a version of that for the rest of the year. From a leverage perspective, in Q1, we were at 3x. As we realized and took in some loans to fund the acquisitions we made in April, we've mentioned before that we may be above the target of 3.5x for a short period of time. So do not be surprised, pleased if you see a slight increase above 3.5x in Q2. However, we expect levels to drop down to 3x and maybe slightly below 3x by the end of this year. So we expect to achieve that target. And Fredrik has already mentioned that actually, in terms of the bottom left, the additional targets we gave you to give you some comfort, EBITDAaL in excess of EUR 235 million and EBIT in excess of EUR 140 million, I'm confident to say that actually we can achieve those numbers as well. So with that, final, I guess, record quarter for us, it's my honor to hand over back to Fredrik for the final slide.

Thank you. Thank you, Anand. So yes, key takeaways. So we have always grown well and we keep growing well. And I think it's an assumption that we will keep on growing well going forward as well. Anand just talked about the financial targets on a quarterly basis, annualized having been achieved in this quarter, which, of course, is super good. And importantly, it comes from solid margin expansion in both divisions. So while some businesses obviously are stronger than others, it is quite uniform in terms of performance across everything we do. Very good cash flow. We've always had very good cash flow. Again, it's just that the numbers get bigger. So then it becomes a bit more visible. And the acquisitions are not visible in these numbers. They will be visible when John and Anand report in late July for the second quarter. And both of these acquisitions will be very accretive, as I mentioned and they add about EUR 80-odd million of annualized revenue together. Outlook remains strong and solid and I am very happy. I'm very confident to hand over leadership to John and Anand and the leadership team. I think that's the takeaway. Thank you.

And back to the operator.

[Operator Instructions] The next question comes from Mattias Vadsten from SEB.

Yes. During your last quarterly conference call, I just wanted to take the opportunity to say congrats really on an incredible and impressive journey with Medicover, Fredrik. It's been fun to work with you from my perspective. So with that, I have 3 questions. First one, maybe a longer one, but I'm just trying to understand a bit better what is going on in Healthcare Services. So the 6 units you've been referring to are close to EUR 4 million negative on EBITDA as you said during the presentation, actually higher loss, also a softer quarter in India. And margins coming this strong. So maybe explain what positive drivers that has been kicking in, in Q1 vis-a-vis last couple of quarters where the margin improvement has been smaller? And also, do you expect or do you anticipate this positive margin trend to continue in Healthcare Services going forward? That's the first one, and then I will take 2 more.

Yes. So Mattias, you have the -- the margin expansion is coming from the businesses that I say is sort of standing out, and that's really out of Poland. So the employer paid business had a stellar quarter in terms of basically margin expansion. You -- I made the point that actually medical loss ratio is down year-on-year. And given the size of that business, 1 percentage point or 2 will reduce medical loss ratio has a big impact on that business. Now we have super growth in our adjacent sports business, which is a good margin business. So the more we grow that, the mix is slightly improving. And the third element, which one sort of tends to forget that is that when we go -- which Romania is a good example of when you look at the situation this time last year and the situation now, we are still not where we want and need to be with margins out of Romania on the back of these hospital openings, but you have a very significant improvement year-on-year. So that sort of swing factor when you go from an outright loss-making position to perhaps a small positive position, that makes a big difference on the margin. So that's really what you see here, Mattias. So a number of factors are being driven by the business that performed very well. And that's not going to change. So that's why I made the comment initially that it's noteworthy to see that we have this performance despite the fact that actually the losses from these 6 units is actually increasing relative to the prior quarter.

This makes sense. Then you're taking me into my next question a little bit here. So I appreciate you not commenting on margins per business segment. But I think it looks like in your reports recently that your sports business, as you alluded to, and the ophthalmology business grows very fast. So could you give us a sense, these 2 areas together, how they compare to the Healthcare Service area -- business area overall in terms of margin profile? Is this possible?

I mean, Sport and Gym business is a higher margin business than the Health business, I guess we can say that. And then the fact that it's growing so fast is that if you look at what we have bought and invested quite significantly in that area over the past whatever 3 years. So it is not that strange that it's growing that way.

I agree. I agree. Then the third one is concerning Germany. So if you could talk about the split private vis-a-vis public. And also I mean, the growth rate seems to be quite extraordinary in the private part. I have -- I mean, just some thought. Is the private -- public capacity not enough or capacity taken down due to deteriorating profitability? Or what is happening there? I think -- yes, I think this is important to cover because it looks quite extraordinary.

You have exactly the same thing having started going on in Germany that you had in this country in Sweden for a long time now, when the public system is starting to run out of budgets, they're not going to tell you they run out of money. You're just going to get your appointment much further down in time. So accessibility goes down. That's what happens when funding becomes scarce in the public system. And that's very much what we see in Germany. So on balance, more people that are covered by the public health insurance system will tend to go and pay privately to get a quicker appointment. That we didn't see a number of years ago in Germany, but that you see now. And that is a -- I think that's a core part of explaining the higher growth in private pay in Germany. So that is the difference when you look at how come you're growing like that, where the -- basically the public pay piece, which is significant has very low volume growth and no price growth. So you correctly observe, Mattias, that then the other half must be growing quite significantly.

The next question comes from Philip Ekengren from ABGSC.

Congrats on a strong quarter here. I just want to look back to the Polish market. You write a bit that the growth rates in Polish hospitals, similar to Indian hospitals has experienced some difficulties in Q1. Could you elaborate a bit on that, please?

Yes. I wouldn't overdo that, Philip. It's -- some quarters, some businesses are strong, other quarters, other businesses are strong. And this particular quarter, our Polish hospital business was slightly behind plans. I think, in the previous quarter, fourth quarter, it was the opposite. So it is just a factor to note what has been driving performance this quarter. We -- I wouldn't expect it to be the same next quarter, just to give you that sort of indication. So it's a factor in quarter 1, but it's not something that you should expect to continue.

Okay. That's clear. And then on the acquisition of SYNLAB's operations, can you say anything about what type of labs? Are they more of a simple character or are they more advanced labs? And also maybe if you care to explain a bit on what type of synergies you're planning to realize and also maybe update us on what processes you're looking to implement there.

Yes. I mean they would have very similar labs to ours. These are 6 stand-alone country operations. So they would operate their lab network very similarly to how we would do. It's a very professionally well-invested business. So nothing much different. We may have different machines because we may work with different sort of key vendors. But otherwise, the labs would be very similar. So the key synergies comes really from closing down infrastructure. So where you operate in the same geographic market, you don't need 2 labs and you don't need 2 BDPs next to each other. So there's a lot of overlapping infrastructure that you can -- that you don't need. So when we talk synergies, it's pure cost synergies. So you can operate the combined business at much less than the current combined cost.

The next question comes from Kristofer Liljeberg from Carnegie.

Three questions. First, on the diagnostic side, can you describe a little bit more about the growth outside of Germany? Is that mainly in Romania? Or do you also see strong growth for more specialized tests that are sent from other countries into the German lab? My second question about the weakness in India you mentioned, how much would you say is company Medicover specific? And how much of the weakness this quarter is the overall market? And then finally on the targets, if you just have a figure on how much sales has been acquired since the target was first announced?

Say that last one again, Kristofer. I didn't hear you correctly.

Just wonder how much sales has been added from acquisitions since the financial targets was first announced?

Okay, Hanna will work that out while I think it's EUR 2 million only in this quarter. But we come back to it. So I'll start with the first one.

I can talk about diagnostic sales. So I think not just in Germany, but actually across all targets, all areas, we saw positive double-digit growth in terms of revenue growth from a diagnostics perspective. So pleasing from an overnight diagnostics that not just the reliance on Germany, where Germany was still growing, although single-digit, but strong in all other areas as well. Can you remind us of your second question, please? Sorry.

I was wondering about the -- what seems like a temporary weakness here in India. How much of this was company-specific? You mentioned about some issues at the hospital and how much was the weaker market? And if you have any view about the reason for this market weakness and the sharp uptick again in April.

So there's no scientific answer to that question, Kristofer. So if you allow me, I'll just give a personal guesstimate. And I don't know if John will agree with me or not. But I sense probably about sort of 2/3 of weakness is ourselves and 1/3 of weakness was much weaker consumer sentiment than expected half of the period, something like that. And in terms of what impacted us mostly in terms of the internal stuff was the lack of visa for admitting traveling patients from abroad. And then why did we see this consumer weakness in India principally second half of the first quarter? And I don't think there's one single answer, at least my understanding, despite having read quite a bit. So I think quite a few factors sort of came together. It will be interesting to see. I mean, we're the first of the Indian publicly listed hospital peer group to report. So it will be interesting to see when those reports come out, how they comment on this. I think it was probably more pronounced in the southern part of the country where we are as opposed to the northern part of the country around Delhi. But again, that will be interesting to see when the other companies report.

Could I ask your thoughts on this [indiscernible]

So, Hanna has worked on the other [ answers ] to make sure I understand what you were saying.

Could I ask...

2023 and 2024, we had acquired revenue of EUR 108 million.

Sorry, could you say that again?

Did you get that Kristofer?

And this quarter's was [ 3.2. ]

Can you repeat that figure? Sorry.

Did we lose them again?

Can you hear us? For 2023 and 2024, we had acquired revenue of EUR 108 million. I think we're back. Next question.

Kristofer Liljeberg from Carnegie.

Do you have any more questions?

Since my line is unmuted now, it's -- do you hear me? It's Kristofer.

[indiscernible] moderator?

Yes, we can hear you, Kristofer. Did you have any more questions for the speakers today?

No, I'm fine, but it seems the speakers couldn't hear me. So I don't know.

Are you finished with all your questions? The next question comes from Kane Slutzkin from Deutsche Bank.

A couple of questions, please. Just on the medium-term targets...

Do we have any other questions?

Sorry, can you hear me?

Yes, we can hear you.

I'm not sure they can hear me. Should I continue?

Yes, please, Kane.

Okay. Just on the medium-term targets, you've obviously surpassed those targets on an annualized basis. I'm just wondering, will you be sort of updating those given they're somewhat out of date set back 2 years ago? And just wondering, particularly given the fact you did mention ROIC, you've had a nice increase there. Might ROIC be something you add to your targets because 8.3% is up nicely on Q4, but it's still relatively low. And I'm just wondering when all, obviously being impacted by some of the drags from new hospital openings. I'm just wondering if you have a sort of medium-term target for ROIC. Just on the acquisitions, the EUR 80 million you referred to annualized, could you confirm or give us a ballpark number on the EBITDA that you are -- will be generating from that EUR 80 million. Using the 7x multiple on CityFit, it looks like EUR 19 million on that business EBITDA, which is quite a high margin. So just like to confirm how much EBITDA you will be getting from there? And then just finally, on India. Can you just confirm the occupancy levels you are at in April? And is there any update on the listing, the potential listings?

We might have some technical issues here. It seems that I'm the operator here, and I could hear your whole question. But apparently, the speakers, they're not hearing.

Okay. I thought so because there was no reaction.

We can hear you the speakers, but we're just fixing the issue here with the -- if you can wait a little, so we can get an answer.

They need to write the questions there, then we can see them.

Could you -- Kane, please write your question to the chatbox, so then they could see it and answer you?

I'm actually not logged into the webcast. I'll have to log in quickly somehow.

Yes. We're terribly sorry, but it's some technical issues.

Okay. I just need to find the invite, unfortunately, so it might take some time.

Should we go through this?

[ Fredrik ] just sent you a note. Maybe you can hear.

They can hear us.

So do you expect Indian hospital businesses to be breakeven on EBITDAaL this year?

I can answer that one, Fredrik. So yes, in short, when we refer to the 6 hospitals, 5 of which are in India, we have 23 hospitals in India. So we will -- which are positive. So we will most definitely be positive from a India EBITDAaL perspective.

What price growth do you expect separately for Healthcare and Diagnostic segments for the rest of the year? I think quite similar to what we have reported for the first quarter. So I don't think you should expect that to be dramatically different. And then what are your CapEx as a percent of revenue expense for the full '25? We have guided 5.5% to 6%. Do you expect to maintain absolute adjusted EBITDA margin above 15% for FY '25? Yes, we do. Do you plan CityFit to be available only for Medicover sports card or to other sport card provider as well? It is available to other sport card's providers as well. So that is likely to remain like that. Let's see.

We're running some technical issues, but I'm trying to get back in touch with the speakers. Hello?

[Technical Difficulty]

Okay. Unfortunately, we've lost the connection with the speakers today, but we want to thank all of you for your attending to this presentation and have an excellent day. Thank you, and have a great day. Bye.

Sorry, we had a technical glitch here at the end, but thank you for listening in. And I hand over to Anand and John, and that will be reporting the second quarter. So thank you very much.