RHÖN-KLINIKUM AG adjusts forecast for the year

• Restructuring of UKGM delayed, full-year operating result expected to be burdened by roughly EUR 20 million
• Surge in costs as a result of high wage increases coupled with persistent price pressures
• Extraordinary effects from voluntary public takeover offer by Fresenius
• Regulatory relief in the second half as a result of partial compensation for wage increases
• Expectation for full-year earnings adjusted by EUR 25 million to EUR 30 million

At RHÖN-KLINIKUM AG, various burdens recently arose which, taken together, require an adjustment in the forecast for the current year. These essentially relate to three developments:

Firstly, restructuring at the University Hospital Gießen and Marburg (UKGM) has slowed considerably in recent months, which is why its trend in earnings of late has been lagging well behind expectations. This is especially attributable to the tight situation of personnel expenses. At 12 months’ sight, operating earnings at UKGM are expected to be burdened to the tune of roughly EUR 20 million. In a first step, RHÖN-KLINIKUM AG has appointed a new management to implement the necessary measures.

Secondly, the hospital sector has been witnessing relatively high wage increases in the recent past – for the facilities of RHÖN-KLINIKUM AG these are situated on average at the upper end of expectations. This development, coupled with the steady deterioration in prices caused by revenue discounts on volume increases, is putting a double burden on the operating margin.

Thirdly, the announcement of a voluntary takeover offer by Fresenius and the resulting changes in the shareholder structure that have since taken place gave rise to insecurity within the Company organisation. Management capacities were tied to a considerable extent, whilst important decisions of an operative nature were put off. This negatively impacted the operative performance of the entire Group.

Specifically with the parent, RHÖN-KLINIKUM AG, the takeover offer resulted in extraordinary burdens in the form, e.g., of additional consultancy fees running into several million euros in the first half of the financial year.
 
During preparations of the half-year financial statements as at 30 June 2012, these effects have now emerged more clearly, allowing an initial rough indication to be given with regard to the trend in earnings. Based on currently available information, net consolidated profit of the first half will be situated at roughly EUR 50 million.

Independent of this, a positive prospect for the earnings situation is emerging as a result of regulatory changes, such as the recently adopted partial compensation for wage increases in the second half year. Given the usual seasonal nature of individual hospital budget negotiations, backlog effects from the negotiations on budgets and discounts for surplus service volumes are possible in the second half year. In view of these positive effects, the Company currently expects that the aforementioned adverse developments will feed through to the full-year result of the RHÖN-KLINIKUM Group to the net amount of EUR 25 million to EUR 30 million. However, it should be noted in this regard that possibly not all financial consequences of the takeover offer by Fresenius are foreseeable.

RHÖN-KLINIKUM AG therefore adjusts its outlook for full-year 2012 as follows:

For financial year 2012, including Dr. Horst Schmidt Kliniken Wiesbaden (HSK) consolidated for the first time at the end of April, RHÖN-KLINIKUM AG now expects revenues of EUR 2.85 billion, which may fluctuate within a range of plus or minus 2.5 per cent. This revenue target is accompanied by a forecast for EBITDA of EUR 315 million and for net consolidated profit of EUR 117 million, in each case subject to a variation of +/- 5 per cent.

The detailed half-year financial statements as at 30 June 2012 will be published on 9 August 2012.

The Board of Management