AEVIS VICTORIA SA / Key word(s): Half Year Results
13-Sep-2019 / 07:10 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 KR
The issuer is solely responsible for the content of this announcement.
Fribourg, 13 September 2019
AEVIS VICTORIA: Publication of Half-Year Report 2019 - Group remains on growth track with strengthened financial profile
In the first half-year 2019, AEVIS VICTORIA (AEVIS) made substantial progress in the implementation of its strategy to sharpen its profile as an investment company. The transformation process encompassed the placement of an additional 61% stake and subsequent deconsolidation of the healthcare infrastructure company Infracore. The transaction has fundamentally transformed AEVIS' balance sheet structure, as financial leverage was drastically reduced by more than 65% from CHF 1'048.5 million to CHF 363.2 million, while equity increased to CHF 596.4 million, corresponding to a very strong equity ratio of 48.3%. The hospitals of Swiss Medical Network achieved substantial growth of 10.5% and the hotels of Victoria-Jungfrau Collection performed well in a dynamic market environment. AEVIS' total revenues surged by 71.0% to CHF 545.6 million, including the gain on the sale of the Infracore stake of CHF 193.8 million. The EBITDA margin reached 45.9% and the net profit in the reporting period amounted to CHF 202.1 million.
Well prepared for the next growth leap
AEVIS has reduced its stake in Infracore, its subsidiary specialising in healthcare infrastructure, from 100% to 19% in two steps. In December 2018, Baloise acquired a 20% stake in Infracore; in May 2019, Baloise acquired a further 15% and Medical Properties Trust 46%. Infracore envisages a pay-out ratio of 80% to 90% of net income (excluding results from revaluation), which should allow AEVIS to benefit from annual dividend payments in excess of CHF 5 million.
The transaction did generate substantial cash inflows for AEVIS and led to the envisaged deconsolidation of Infracore per 31 May 2019. This resulted in a significant gain on the sale of the participation of CHF 193.8 million and a much asset-lighter balance sheet, which decreased from CHF 1'854.9 million to CHF 1'234.9 million, while the Group's leverage diminished significantly by more than 65% from CHF 1'048.5 million to CHF 363.2 million. At the same time, the Group's equity increased strongly from CHF 445.0 million to CHF 596.4 million, corresponding to a high equity ratio of 48.3%.
A solid equity base combined with cash reserves and available credit lines of more than CHF 260 million give the Group considerable flexibility and scope to further strengthen its portfolio through carefully chosen participations, acquisitions or partnerships. In line with its growth strategy based on targeted mergers and acquisitions, AEVIS is currently reviewing several opportunities in each of its focus sectors, i.e. healthcare, hospitality and lifestyle as well as infrastructure. As an active reference shareholder and investment company led by entrepreneurs, AEVIS aims to leverage its accumulated investment experience, in-depth industrial expertise and strong network in the investment sectors to achieve operational excellence and long-term value creation for its holdings and shareholders alike.
Swiss Medical Network: strong growth and EBITDAR-margin increase to 19%
Swiss Medical Network continued its growth strategy with the integration of 40% of Rosenklinik in Rapperswil in early 2019, the acquisition of the surgical hospital on the Siloah Campus in Gümligen and two health centres in Zurich and Solothurn in the second half-year of 2018. In addition, Klinik Belair in Schaffhausen was acquired from the Hirslanden Group and will be integrated as of 1 October 2019. In total, Swiss Medical Network achieved revenues of CHF 313.0 million, up by 10.5% compared to the previous year, and net revenues (excluding medical fees) of CHF 268.9 million. Organic growth amounted to 6.8% despite lower TARMED tariffs introduced a year ago. EBITDAR increased from CHF 42.2 million to CHF 51.1 million, corresponding to an EBITDAR margin of 19.0%. Activity levels are expected to remain significantly above 2018 and therefore Swiss Medical Network expects to achieve a new record turnover in the business year 2019. The newly acquired hospitals and medical centres will continue their integration process in order to bring them to the same operational performance as the established hospitals of the network.
Victoria-Jungfrau Collection: revenues up by 3.5%
In a challenging market environment highlighted by a moderate development in the first quarter and good momentum in the second quarter, the Victoria-Jungfrau Collection hotels performed well and achieved net revenues of CHF 29.2 million, up by 3.5% compared to the previous year. Overall, overnight stays reached 54'809. The Average Room Rate continued to surge and reached CHF 383, up from CHF 364, leading to an improved gross operating profit. EBITDAR increased to CHF 4.0 million, corresponding to an EBITDAR margin of 13.7%, unchanged from the previous year. Results in the second semester are expected to be positively impacted by seasonality effects and good performance during the summer months. Finally, the re-opening of the Eden au Lac in December 2019, slightly behind schedule due to construction delays, will bring back the total operating hotels to four and further improve revenues and margins. Further acquisitions are currently pending in the hospitality segment.
Consolidated real estate portfolio: attractive buildings, with a market value of CHF 400 million
The healthcare properties of Générale-Beaulieu Immobilière SA in Geneva and the hotel properties of Swiss Hospitality Properties SA are not part of Infracore and were not affected by the deconsolidation of this entity. The consolidated real estate portfolio consists of 13 properties in prime locations in Geneva, Interlaken and Zurich with a market value of CHF 393.1 million as at 31 December 2018. Rental income in the reporting period amounted to CHF 26.3 million (including Infracore until 26 May 2019), and the EBITDAR reached CHF 23.6 million, corresponding to a margin of 89.8%. All properties are fully let. AEVIS plans to further develop its hospitality real estate platform in the future.
After the reporting period, one divestment was successfully executed: AEVIS sold its 15.5% holding in iKentoo SA to Lightspeed POS Inc., one of the world's leading POS and e-commerce software providers listed on the Toronto Stock Exchange. With this disposal, AEVIS realised a gain on the sale of its participation of CHF 1.3 million, representing a return on investment of approximately 30%.
Profit on Group level jumps to CHF 202.1 million
Total revenues jumped from CHF 319.1 million in the first half of 2018 to CHF 545.6 million as at 30 June 2019, including the gain on the Infracore transaction of CHF 193.8 million. As a result, EBITDAR amounted to CHF 241.7 million, corresponding to an EBITDAR margin of 48.2% (first half 2018: CHF 38.8 million, 13.8%). The net profit jumped to CHF 202.1 million, compared to a net loss of CHF 1.6 million in the previous year.
Successful bond repayment
In June 2019, AEVIS repaid its CHF 145 million bond at 2.75% that arrived at maturity. The average coupon of the outstanding bonds is thus reduced to 2.25%. The company will also carefully monitor the debt markets, in order to benefit from extra-low interest rates.
AEVIS will favour investments as a reference shareholder in companies active in its focus sectors. As an active investor, AEVIS exerts significant influence on the strategies of the companies it holds shares in, leaving them with full responsibility for operational management. AEVIS will continue to partner with other market participants to further develop and grow the activities of its participations as was done with Infracore.
AEVIS wants to offer its shareholders a combination of capital gains generated by value creation in its subsidiaries and a stable annual return. It is foreseen that the ordinary distribution (CHF 0.22 per share in 2018) will be substantially increased for the 2019 business year.
AEVIS VICTORIA SA's Half-Year Report 2019 can be downloaded via this link:
Webcast today at 10.00 CET
AEVIS VICTORIA SA will present its Half-year Results 2019 during a webcast today at 10:00 CET. The results call will be headed by Antoine Hubert, Delegate of the Board. The conference will be held in English.
For participants to the conference call (slides only):
Dial-in numbers for conference call function:
Switzerland: ++41 44 580 6522
Germany: ++49 692 0174 4220
UK: ++44 203 009 2470
US: ++1 877 423 0830
Code PIN participants: 59508806#
For further information:
AEVIS VICTORIA SA Media and Investor Relations: c/o Dynamics Group, Zurich
Philippe R. Blangey, email@example.com, +41 (0) 43 268 32 35 or +41 (0) 79 785 46 32
Séverine Van der Schueren, firstname.lastname@example.org, +41 (0) 79 635 04 10
AEVIS VICTORIA SA - Investing for a better life
AEVIS VICTORIA SA invests in healthcare, hospitality & lifestyle and infrastructure. AEVIS′s main shareholdings are Swiss Medical Network SA, the second largest group of private hospitals in Switzerland, Victoria-Jungfrau Collection AG, a luxury hotel group managing four luxury hotels in Switzerland, Infracore SA (19%), a real estate company dedicated to healthcare-related infrastructure, a hospitality real estate division, Medgate (40%), the leading telemedicine provider in Switzerland, and NESCENS SA, a brand dedicated to better aging. AEVIS is listed on the Swiss Reporting Standard of the SIX Swiss Exchange (AEVS.SW). www.aevis.com.
End of ad hoc announcement