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Third party research

Medicover: Still shining bright - ABG

Medicover

This is a third party research report and does not necessarily reflect our views or values

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Q2 results
Medicover reported an adj. EBITDA beat in Q2 (+7%/+7% vs. ABGSCe/cons), with better than expected margins in both segments. Q2 sales was EUR 597m (0% vs ABGSCe, 0% vs cons). Total organic sales growth in Q2 was +14% (ABGSCe +16%).Adj. EBITDA in Q2 was 101m (+7% vs. ABGSCe, +7% vs. cons), with a margin of 16.9% (ABGSCe 15.7%, cons 15.8%). Total NRI in Q2 was EUR -5m (ABGSCe -3m, cons -4m). The Q2 adj. EBITDA beat was driven by strength in the Healthcare Services segment, with a beat on both sales and EBITDA, as India returned to double-digit sales growth and the Polish business continued to perform well. As we highlighted in our preview, the price reform in Germany could introduce some short-term uncertainty, and in this quarter, Germany is growing at a slower pace than before.

Outlook and estimate changes
Management does not provide a specific outlook for 2025. Going forward, the company continues to expect a strong and robust performance. Management also highlights that there are opportunities to grow as the businesses mature, by further utilising capacity in India and Romania. Based on the Q2 deviation, FY'25 estimates are likely to be revised up by a low- to mid-single-digit percentage on adj. EBITDA.

Share view
The stock has been somewhat soft going into the report (-2%, -5d) and given the earnings beat in today's report, we expect the share to trade up by at least a similar magnitude as today's expected estimate revisions. Conference call at 09.30 CET today. Link for audiocast: https://medicover.events.inderes.com/q2-report-2025/register
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