Morning, everybody. It's John here. Welcome to our Q2 2026 report. I think we've got a quarter of positive progression, which we're very pleased with. You can see it's another quarter of double-digit organic revenue growth and margin expansion, which is really what we're aiming for. Strong organic growth of 11.8%. This is our sixth quarter of improved margins so we're very pleased with that it's a record that we're proud of and hope to continue as we go forward just a reminder for everybody this particular quarter has a very strong comparable base last year we made significant movements upwards so it's even more pleasing to see the progress that we've actually made and a year or so ago probably just a year and a quarter There was a lot of talk about India and what we're going to do in terms of the growth for India. But you can see that over Q1 and Q2, we've had very positive progression and really strong growth percentages. Our diagnostic business has performed very well. There's a level of consistency that's happening within that division, which we're delighted with. And it's all credit to their hard work. and we have you know consistency of increasing our fee-for-service revenue streams which is where our main focus is and leverage was at 2.9 so revenue 640.4 very respectable in terms of the growth rate you can see that from an organic perspective it's 11.8 which is very credible indeed. Adjusted EBITDA, 109.2. Very pleasing to see that and to see our progress. And you can see also with the adjusted EBITDA margin at 17.1, the increase there is not as big. But as I said, there's a very high comparable. So just to see that move in the right direction is very positive for us. Operating cash flow is 73.6. That's up 28.4%. So really good generation. You know that from our perspective, that's quite important for us because as we do that, it gives us more choices. Leverage, as I said, is at 2.9. That's down from where we were at year end at 3.1. And course has improved quite considerably if we look year on year uh from the 3.6 last year to 2.9 so you know good uh good solid set of numbers uh that we've produced so we're happy with that if we move forward and just look at the revenue and the progression of the revenue streams another good quarter you know revenue produced at expected levels so we're happy with that revenue by country he's very steady but you can see a strong uh quarter in india uh in euros up 23 percent in local currency much higher and um you know as i said that this time last year was a big area of debate for us so it's really pleasing to see the team have continued their progress and uh and got momentum inside that business and revenue by pay a little bit of change you mix here uh happening with different things going on but very good strength coming through from fee-for-service which is our biggest stream and it's obviously the stream that we want to concentrate on a lot and it's good to see that growth. Governmental revenue streams in terms of the public pay, lots of micro changes happening there that's affecting it and we know that in terms of our funded business. We want to continue to develop that, but pleasing to see that we've got growth starting to come through in Poland from some of the initiatives that we've put in place. If you look at healthcare services, solid performance by healthcare services. Again, this is the area where probably the comparable base was the highest, so we need to bear that in mind but you know uh revenue growth 6.9 organic 12.2 so very very good um and uh price accounted for five 5.2 uh of that so uh you know quite a quite a solid uh mix that we have there as i said with with india uh 23.1 revenue growth uh in india in euros but 39.6 in local currencies so So 34.4% last quarter and towards 40% this quarter. Good momentum in that particular business. FIFA service and other areas perform well. Sports and wellness continues to be strong for us. And we will continue to develop that proposition very strongly. Memberships are relatively unchanged. You know, as I say, Poland grew. Some membership fall in Romania. Quite a bit of that was contract management, so managing the profitable and unprofitable accounts. And most importantly, really, related to the fee for services, that quarter on quarter, our ability to create relationships with people looking for those kind of solutions is growing quite strongly. Revenue, $442.8 million, so up 6.9, which is good. Beta margin, 18.4, so a slight change there against the comparable. Membership's relatively flat, and revenue by country not particularly changing dramatically. When you see the minuses, please bear in mind that we still have Hungary in these comparables. So that affects that particular indicator. If we move to diagnostics, we'll see that it's a strong growth and improved profitability. So congratulations to that team. Good revenue growth, you know, increased by 8.5%. Organic growth is up 10.9% and a good proportion of that is in price. And please remember that from a German perspective, the ability to move prices, you know, almost absolutely zero. So very credible performance by the diagnostics team. Feed for service strong, as we said, that's the area of focus. So that's really pleasing to see. Operational leverage coming through, you know. And, of course, with the diagnostic tests, mix is quite important in terms of the different types of tests that you do. We've always focused on making sure we've got a reputation for not only covering the basics, but covering the more advanced side of life. So that's great. Ukraine continued to deliver really solid performance for us. I mean, Q1, we said, was softer. A bit of that was reflected by the weather. A bit of that was reflected by the war conditions. But considering the things that they have to overcome, we just have such a fantastic team in Ukraine and we'd like to thank them for everything they do, because it really is difficult conditions that I don't think any of us would want to trade under. Germany did really, really well. Solid momentum. We're seeing the change in mix continue where we're getting more fee-for-service, maybe as a consequence of the environment, but also a consequence of the varied proposition that we have there. Our expansion on BDPs continues. Really important for us in terms of the future. So that's very good to see. And the number of tests up by 4%, which is good progression. You know, 40 million, 40.3 million that we produce, which is great. Revenue, very solid, 205.1, up 8.5. So very, very good. Continued improvement in the margin. You can see that that's a significant improvement that the team have done there. So very pleasing to see. And, you know, 40.3 is a positive sign against our 38.7 tests of the comparable quarter. And if you look through from a country mix, it is, again, relatively stable. And you can see the strength of Ukraine coming through with that. And, again, our payer mix continues to increase on a fee-for-service basis. and that that will give us much more stability and of course opportunity to move prices as we move forward so a very very positive sign so congratulations to everybody in diagnostic services so i'll hand on to anand who will talk you through a little bit more detail of the financials and then i'll come back at the end to summarize and then over to you thank you john so i'll describe the quarter as a solid quarter and consistency in us delivering double digital organic growth from a revenue perspective and margin accretion as well so we're pleased with
our numbers i think one number i'd put out is ebit so ebit of 51.2 million you can see our margin rate is uh eight percent now which is up 100 pips year on year so pleased to see underlying profitability uh being boosted uh by as john said in some areas tough comps but we're still growing our margins year on year and organic growth as well other profit measures are up year on year as well as you can see from the page one I'll pull out is EBITDAO which is obviously our best measure of cash profit at 72.7 million that's up just under 13 percent with margin accretion of 50 basis points a year on here at 11.3 so we're pleased with that and as a reminder in Q2 we paid our dividend of 20 euro cents per share so that's kind of reflected in our cash flows from a healthcare perspective John's mentioned that we had some tough comps from last year but still pleased with the growth. So I'd say a solid performance. So organic growth of 12.2%. And you can see there was kind of growth in both price and volume, which is very pleasing. From an EBITDA perspective, it's up year on year at 55.6 million. There is margin rate dilution year on year of 30 basis points. That's predominantly due to the tough comps, as I mentioned earlier. And there's also some one-off activity last year, which is if you strip out, then we'd be up year on year. EBITDAO relating to the immature Indian hospitals you can see the loss on those in the quarter was 3.2 so it's down a bit on last quarter we're up on last year those are predominantly due to the hospital that we opened in Q1 and in line with expectations but as John says we're pleased to see the India overall company performance perform really well at the numbers that he mentioned earlier. I'd say a very strong month from diagnostics so solid in healthcare strong in diagnostics so organic growth 10.9% again pleasing to see volume growth as well as price growth across both EBITDA of 30.3 million which is very strong with margin rate up 110 basis points at 14.7% I think obviously we kind of concluded on the two acquisitions we did in Q2 last year and it's pleasing to see in both healthcare as well actually and in diagnostics that the synergies we've realized are helping boost our numbers year-on-year. In other metrics, so leverage trends down, so it's below three which is good compared to last year as our increasing profitability kind of offsets the fact that we're kind of keeping our invested base safe from a debt capital and equity capital perspective. You'll have seen that we increased and strengthened our liquidity in Q2. So in May we managed to increase our RCF from 300 million to 400 million. That gives us more scope and more optionality and headroom to take further investment decisions in the future should we choose to. I've mentioned the dividend we've paid of 30 million euros in Q2. Taxes in line with expectations at 28 percent. An improved performance in cash versus Q1 with net operating cash flow at 28 percent at 73.6 million and free cash flow at 4.1 percent of revenues versus three percent last year. And finally on ROIC kind of an improvement there as well so 13.6 versus 9.3 percent last year. So I'd say a good performance on those measures. in terms of capex if you look on the left you can see this clear blue water between our free cash flow and our growth capex which which is good uh our capex overall was 29.7 million in the quarter about 4.6 percent of revenues i've mentioned previously that will be around six percent of revenues for the full year and we'll stick to that in terms of the type to spend the more where the money was spent in the quarter two-thirds was in healthcare services and a third in diagnostics the maintenance growth split is 44 56 in this quarter however looking forward for the full year we expect to see revert back to more two-thirds on growth and a third on maintenance and finally medical space of just over 1 million square meters this will move it in the quarter but up here and finally with regards to our midterm targets to 2028 we still expect to achieve them so organic revenue of 3.25 billion adjusted organic EBITDA of 600 million leverage under three and all the other measures highlighted in the bottom right corner including EBIT we expect to achieve that for that so with that I'd like to say thank you and I'll hand back to John to wrap up yeah so you know we we say here solid performance and that's probably our Englishness that's coming through there.
It's really good to see the consistency that we've got with the double-digit organic growth. Six consecutive quarters with margin improvement, which is the zone that we want to be in. Strong fee-for-service growth. That's one of our most important revenue drivers. And really good to see that the synergies from the two acquisitions, which were our largest in our history have come through and the acquisitions have been embedded well into the organisation and they're very much part of MediCover now. India, as I said before, you know, a lot of conversation, a lot of talk about India if we go back 12 months and we said that we would start to see the momentum of that coming through and it is coming through so strong double-digit revenue growth even in euro with the exchange rates so congratulations to all and we will do what we we've said that we're going to do we'll focus on our execution we'll focus on making sure we we get efficiency improving our capacity utilization and making sure that when it comes to our price and cost management that we take the appropriate steps. That means that the customer gets what they need and that we have a good, strong, sustainable business. And finally, just a thank you to all of the people in MediCover. These results have been created due to your hard work. So thank you very much for all you do. Okay.
And now we'll go to the Q&A and hand over to the moderator to help us with that. if you wish to ask a question please dial pound key 5 on your telephone keypad to enter the queue if you wish to withdraw your question please dial pound key 6 on your telephone keypad the next question comes from christopher lilyberg from dnb carnegie please go ahead yeah i have some questions here regarding poland and then india as well so if poland first would be able to comment what group would have been adjusted for the strength in the sport and wellness segment so i'm thinking about both funded and the fee for service adjusted for
sport and wellness which seems to do very very well no we don't disclose that information christopher so unfortunately i can't answer that that question we don't do it for competitive reasons so okay and and you said found that uh we're growing again in in poland uh is that also true for members quarter of a quarter yes yeah they did yeah the uh our funded uh position started to to move again in in poland we've put uh as we commented on previous quarters we've uh put some different solutions out there in the market and more are going to come so you know we and we fully expect you know the employment market to sort of help us along as well um but even whilst that's been adjusting a little bit it's probably the best way to describe it that you know we still know that we can uh we can penetrate more so uh we expect to do more on that line as we move forward uh but given that the number of members were down here sequentially seems a pretty large drop than in in romania if you could maybe explain that a bit yeah yeah we we did some uh um you know uh looking at our profitability on the portfolio and uh uh made some sort of harsher decisions in terms of the membership we have important in the portfolio in romania so it did drop and the uh what we have to remember about romania you know currently there's quite a lot of fiscal things that are happening and there's some other companies that decided that healthcare is not right for them at this moment in time. But membership isn't the biggest part of our business down in Romania. It's a much, much smaller percentage of our mix of revenue. So I think that will stabilize as we move forward. So we've got a watching brief on it. We're taking counteractions. But your question about Poland is, But, you know, we expect Poland to be as history relatively strong for us.
OK, great. And then India, if you could comment on more audience there. I don't know if EBTA versus the rest of the group, if it's improving year over year. Yeah, anything.
Yeah, I think broadly speaking, they're slightly up here on you. But as I said, we're more pleased about the revenue growth. As always, we're building margin in, let's say, Indian hospitals that I've seen. You kind of recruit the doctors first and then the kind of revenues tend to follow. So we've got a strong base of having recruited a good doctor set and now the revenues are starting to follow, as you can see.
So we expect a bit of margin accretion further but yes now we're pleased but so is it true then that india margin are still dilutive for for the business yes okay and and just when it comes to the impact on ebda margin from leases is that the similar effect that you have in in europe if you look it as a percentage of sales or something like that similar yes i would say yes because obviously the rupee has depreciated year on here as well so yes okay great thank you very much thank you the next question comes from matthias vatston from seb please go ahead
yes hi i have a couple of questions so starting with romania i think the macro backdrop quite well explained what would be helpful i think is some more flavor on the political situation and perhaps more yeah what tangible initiatives that are taken there to impact the ability to grow for you and maybe yeah if it will be sort of soft on a year on your basis also for h2 2026 that's the first one yeah i mean you know the the political situation down there uh creates a degree of instability.
And that, you know, translated into some micro changes in the payment system in healthcare from the governmental funds, where they've capped things which in history weren't capped before, and they've cut some of the tariffs, and they're basically repurposing their framework to be able to balance budgets and come into line with things. So, you know, what happens there is that these changes happen and then for us you we feel it because in that location we do and you know over time what we would expect to happen and usually does happen is that the people that are not getting their care through that means will switch to getting their care through an alternative means so you know we have to repurpose our operations as these things happen and we're taking those kind of counter measures in terms of the offerings that we do for fee-for-service and the the way that we look at the the lines that have been affected from a governmental perspective and then usually what happens is our fee-for-service line starts to attract more people as a consequence and we start to move through ultimately you know government of Romania have a responsibility to provide care to the people of Romania through the governmental funds and you know they will continue to do that it's just that there's micro changes happening that we have to adapt to so you know it will take a bit of time for us to adapt but we should be able to come through that and so I'll say one more thing and usually that creates opportunity for us so um let's see how it plays out yeah thanks a good a good example of that i guess is germany and what you've seen and you had better growth year and year in q2 compared to the first quarter um would you say this is just more patience moving to the fee-for-service line that is helping you there or is it anything else no i think there's a combination of a number of factors as it always is in our business it's not really down to kind of like one particular answer but due to the nature of what we do uh but yes you know the the um the nature of the reforms that happened a year ago uh would have changed consumer behavior to be to be more prepared to pay out of pocket because of delays um you know we don't we don't expect that to be like a tap which you know didn't have a lot coming out of it and suddenly there's loads coming out of it we expect that to kind of like move over a period of time but I think the strength of our of our broad portfolio of testing and the fact that yeah we've got lots of tests that are very much focused on to the medical side of life and supporting the medical profession but also within our portfolio we have more lifestyle related things which are becoming more and more popular so i think we're well placed to be able to take advantage of of those positions and see fee-for-service progress but you know don't expect it to be a dramatic thing it should be
steady as we go and as we see the trends and the and understand where to focus on we'll very much seize on that thanks i'll squeeze in one last question in terms of the price contribution in diagnostics it has been averaging around 3.1 since the onset of 25 now i think it was five just what is driving that i think in germany no changes i presume yeah could it be an impact of raising prices in safer service for germany maybe not no no i don't think so i don't think that you know any price change that we do in germany there's uh there's frameworks that control things
So, no, it's a much more mix, yeah, and, you know, the strength, as I said, of the broad nature of our portfolio. Thank you so much. Thank you.
Operator
The next question comes from Kane Slutskin from Deutsche Bank. Please go ahead.
Morning, guys. Just a quick one. I'm not sure if you can comment, but can you talk to the situation around the Indian business? I mean, originally you were looking to list this business, but I guess in June we learned of talks with KKR regarding a potential sale. Where are we on these bits? Thanks.
Yeah, as you can expect, I can't say too much on this from a legal perspective. I can just reiterate the facts for everybody, which is, as everyone knows, some time back we said we'd explore the IPO in India. You know, that still very much is an option for us and we're continuing to do the work on our IPO. At the same time, you know, our business in India is very attractive and it's no surprise and shock to us that people have knocked on our door. And, you know, our responsibility if somebody does that is for us to evaluate things and see what's the best course of action for us. And of course, you know, one person knocking on the door doesn't mean to say that there could be other people that would want to knock on this door as well. So it's a good position that we find ourselves in. We've got a very attractive business and different options that we could deploy. No decisions have been made on options. And as I say, we've got a responsibility to evaluate and we're in that process. So, that's really all we can say at this moment in time.
Operator
The next question comes from Darius Saftoyu from Jefferies. Please go ahead.
Thank you for taking my questions. I hope this time the line is better. So, first on India, I would like to ask, given the strong local currency growth in Q1 and Q2, and of course the new hospital opened in Q1, if you could provide some color on when do you expect these startup losses to peak and when we should see a meaningful reduction in the drug from newer hospitals? And as well, if you could provide some color excluding these new hospitals in Q1, how was the progression there?
Yeah, great news is the line's very clear this quarter, so that's very positive. The, you know, the trend of opening new hospitals and the the the period of uh before the drag disappears is different hospital by hospital because a lot depends upon the size of it scale of it the mix of the specialisms and your ability to get various licenses approved and and your recruitment you know what uh what doctors have you recruited are they big hitters are they are they uh uh people that are gonna uh take a little bit longer to be able to build up your revenue stream so very difficult to say it's the model is exactly this but you know we've made good really good progress in terms of when we've done openings if you look back in history you'll see that there's always been a drag and the quarter on quarter as we've reported that drag that drag is tended to reduce if we haven't opened any new hospitals and of course in this period we have opened a couple of new hospitals in India which in our IPO program were the final two that we were looking to do so what you would expect to see is as we go by each quarter seasonally adjusted of course you'd expect to see that that drug just just reduces over time and you know over a period of 18 months two years or so that that starts to be less significant
Thank you and my second question on the fee-for-service momentum in Q2 accelerating if you could discuss about the momentum in Germany versus Poland and Romania and also some color and how do you see the differences between volumes and pricing going forward given inflation has been more stabilised in Germany and Poland versus higher inflation in Romania?
Yeah, you know, we have a stance that we've repeated a number of times when it comes to pricing, which is that our position is that we want to provide high quality health care to the people that entrust their money with us. And that, you know, as they come to us, that we give them the care that they need for to get the effective outcome. If that means that we have to adjust price to be able to pay our resources appropriately, then we will do that. So we've got a history of making sure, whether it's funded or whether it's fee for service, of adjusting price to the market conditions. So, you know, in history, if you go back a little bit, we've been a little bit more price adjustment in our revenue growth. This will balance out because the inflationary period that we had in history was much, much higher. That inflationary period now is starting to wash through. And although there will still always be inflation in health care, always higher than the average inflation, it's not as high as history. So you kind of expect the pricing and volume kind of mix to kind of balance out a little bit, depending upon the line.
Yeah, thank you. And if I may have one last short question. In regards to the recent heat waves across Europe, have you observed any postponements in surgeries or appointments or testing? If you could provide some color on the, let's say, end of 2Q or...
No, you know, in our first six months of the year, we've been affected by weather more than anything else, but no, we haven't seen any dramatic change in trends created by events, Thank you.
Operator
The next question comes from Christopher Lillieberg from DNB Carnegie. Please go ahead.
Yes, a quick one on the tax rate. Have you commented what tax rate you expect for the full year?
Yeah, I think the kind of counsel I gave was between 26 to 30 percent.
Operator
So yeah, OK, the next question comes from Matthias Vatsten from SEB. Please go ahead.
Hi, one follow up. A bit larger tie up and work capital here today, this year versus six months, 25. just is it anything in particular that is driving that source yeah is it expected to normalize going forward thank you sorry sorry matthias i don't hear did you say working capital is that is that what you said yeah let's tie up in networking capital year today's figure this year is a bit higher than last year so i just wanted to see if there's anything in particular or if it's yeah no yeah nothing particularly um in terms of one-offs or anything like that i think just to do a little bit with the mix of our business right so as we do more let's say governmental led business either in india or in poland then they not naturally have kind of uh
longer terms in terms of securing our papers so so yeah i mean that's it aside from that you know there's nothing nothing specific to pull out in terms of working capital thank you so much the next question comes from david gorzinski from pko bp securities Please go ahead.
Hi. Thanks for taking my question. Actually, I have three questions. The first one, again, on a BDA loss from India from new hospitals. And you said that the majority of this quarter loss, which was three and two billion, if I'm right was related to the new hospital opened in the first quarter and when we compare to you know three just as also about about three billion in four quarter where there was no impact of the this new hospital does it mean or is my conclusion correct that the loss from other hospitals opened in last three years was like close to zero this second quarter?
Yeah so I can't answer the question exactly but I think over about two-thirds or so at least of the 3.2 million is driven by the new hospital it's very big hospital 14 floors is it so I think it's the tallest hospital in Hyderabad so yes the others are performing broadly in line with where we expect on their recovery curves versus the new one we just opened which is a big one okay thanks so much remember there was a there was another another hospital opening as well that that happened in that fourth quarter you know so there's there's two yeah okay okay and two
questions on for Polish market so first on diagnostic business like there are several government programs right now like including myself program and last year there was like prevention 40 plus program and I wonder what is the next net impact of these programs on your revenue dynamic in Poland in that yeah we don't really comment on that but everybody knows in the market that last year's program was more generous generous than this year's program last year sorry I went too fast I went too fast we don't really comment on the specifics but as a general uh everybody in the market knows that last year's program was more generous than this year's program in in general terms okay thank thank you and the last issue on the quite recent plans in but from polish government to cut wages for you know the best paid doctors like do you see like do you think it will have any impact on your wages in poland and maybe and i also wonder if you may see some you know shift from like the reduction from of the procedure number of procedures performed by public healthcare and maybe shift to to private healthcare? What do you think about that?
Yeah, I mean, there was quite a number of concepts that were talked about in recent weeks in relation to Poland. You know, we have to put this into context of the way that we've run our business for the last 30-odd years, which is constantly over that period different governments and different people within those governments have wanted to make changes in the healthcare system to be able to, you know, manage it more effectively for that particular country. And one of our strengths as an organisation is over the 31 years that we've been trading is as these things have happened, you know, we've been close enough to understand what's happening, what's the implication to us, and how do we repurpose, yeah? So how do we move our operations around to be able to make sure that whatever changes are put in place, we can adapt. That means that we're here for the long term and then we have a sustainable business. So this is business as usual to us. There are some specifics in that particular set of changes that people talk about. And we will work through those specifics. But currently, you know, from our perspective, it is business as usual. some of these changes will come in we will adjust and we'll move forward so we're confident that we'll be able to navigate often when these changes are happened there's very positive things that can happen to our business if we repurpose in the right way and that's what we expect to do okay thanks so much thank you there are no more phone questions at this time so i hand the conference back to the speakers for any written questions and closing comments There's a few questions that have come through online, so we'll just try and answer those before we close out. So people are asking for a bit of flavour in terms of the drivers in India, which is moving the growth up. You know, as before, it's a lot of recruitment of new doctors. Those new doctors now are becoming established with us. That's driving the revenue. you. So that's the main question that's come through. So I'd like to thank everybody for their time this morning. We're very pleased with the results that we've generated for Q2. We think we have a solid base to be able to move forward. Yes, there's some changes in our markets, which could be quite exciting for us. So we're looking forward very much to talking to you in a quarter's time to see how we're progressing. So thank you very much.
