Results for financial year 2006

• Success story continued
• Integration of Universitätsklinikum Gießen und Marburg successfully implemented
• Revenue raised by 36.5% to € 1.9 billion
• Consolidated profit raised by 23.5 % to € 109.1 million
• Total of 1,394,035 patients treated at the Group’s 45 hospitals
• 30,409 employees as at year-end 2006

 Forecast for the further course of 2007

• Market environment and future prospects
• Continuation of growth strategy with sound economic judgment
• Revenues of € 2 billion forecast for 2007, and forecast for 2007 net consolidated profit raised from € 100 million to € 102 million

Bad Neustadt a.d. Saale/Frankfurt am Main, 19 April 2007 ----- At its annual Results Press Conference held today in Frankfurt am Main the Board of Management of the listed hospital group with headquarters in the Rhön confirmed the trend figures already published in February and thus its own forecasts. “RHÖN-KLINIKUM AG thus continues the success story seen since 1988 – despite the difficult economic environment of doctors’ strikes and reform debates”, said Wolfgang Pföhler, chairman of the Board of Management of the hospital group. The integration of Universitätsklinikum Gießen und Marburg was successfully implemented. 

The first-time consolidation of the largest acquisition in the Company’s history, Universitätsklinikum Gießen und Marburg (consolidated as at 1 February 2006), as well as that of Frankenwaldklinik in Kronach and Heinz Kalk-Krankenhaus in Bad Kissingen (both facilities from 1 January 2006), resulted in a 36.5% surge in revenues and thus in consolidated revenue of € 1.933 billion (previous year: € 1.416 billion). With the rise in net consolidated profit by € 20.8 million (+23.5 %) to € 109.1 million (previous year: € 88.3 million), the Group’s expectations were met. The result was marked by two extraordinary effects of opposite signs: a one-off, tax-relieving effect (amendment of Section 37 (5) Corporation Tax Act) as well as the burdening effect from the net loss for the year recorded at Universitätsklinikum Gießen und Marburg. 

According to the Group’s management, the Supervisory Board and the Board of Management of RHÖN-KLINIKUM AG have decided to waive that part of their bonus attributable to the extraordinary tax effect. This waiver will take effect only in the 2007 consolidated financial statements. “We consider it reasonable and appropriate to be paid for our own performance, and not to profit from one-off tax effects”, Wolfgang Pföhler stated. “For 2007 we therefore raise our forecast for net consolidated profit to € 102 million.”

EBITDA (earnings before interest, depreciation/amortisation and tax) rose by 6.9% to reach € 221.1 million (previous year: € 206.9 million). Operating earnings EBIT rose by € 6.0 million to € 146.1 million (previous year: € 140.1 million). This includes the net loss for the year of € 8.4 million recorded at the hospitals in Gießen, Marburg, Kronach and Bad Kissingen consolidated for the first time in 2006. The facilities already consolidated before 2006 together reported EBIT growth of € 14.4 million and an EBIT margin of 12.3% (previous year: 11.9%). “We have thus succeeded in countering the deteriorating framework conditions for hospitals”, explained CFO Dietmar Pawlik. EBT (earnings before tax) reached € 125.7 million, a gain of 1.8% over the previous year’s level (€ 123.5 million). Operating cash flow grew 6.0 % to reach € 165.0 million (previous year: € 155.6 million), which does include the one-off non-cash effect. Earnings per ordinary share stood at € 2.03 (previous year: € 1.61).

The 45 hospitals belonging to RHÖN-KLINIKUM Group at year-end 2006 treated a total of 1,394,035 patients (+46.8%; previous year: 949,376); of these, 526,226 (+28.2%) were treated on an acute inpatient basis, 858,708 (+62.1%) as outpatients and 9,101 (+1.9%) in the rehab and other areas. The disproportionate rise in outpatient treatments stems from the university outpatient units taken over. Excluding the hospitals acquired in 2006, organic growth in case numbers stood at 3.6%.

At 31 December 2006, the number of employees at the Group (by headcount) was 30,409 (previous year: 21,226).

Particularly with the takeover of the university hospitals in Gießen and Marburg, the Group’s key ratios have changed significantly in terms of their structure compared with the previous year. “The increase in the personnel cost ratio to 58.3% (previous year: 56.1%) and in the cost of materials ratio to 25.4% (previous year: 24.3%) essentially stems from the acquired research and teaching structures. These compared with cost reimbursements of € 15.1 million reported under the item “Other income”. Thanks to successful integration and restructuring measures, our personnel and materials cost ratios at the hospitals already consolidated in 2005 were reduced to a combined ratio of 87.9% (previous year: 88.8%)”, Dietmar Pawlik said.

Forecast for the further course of 2007

“We continue to aim for qualitative growth”, explained the chairman of the Board of Management. The results for the first quarter of 2007 will be published on Thursday, 3 May 2007 in a separate press release and with the publication of the interim Q1 2007 report.

On 11 April 2007, the Düsseldorf Court of Appeals dismissed the appeal lodged against the prohibited sale of the district hospitals in Rhön-Grabfeld. The judgement has no influence on the growth strategy of RHÖN-KLINIKUM AG. Over the past two and a quarter years the Group has newly consolidated 16 hospitals – including the university hospital heavyweights in Gießen and Marburg. As a result, the company has nearly doubled its revenues since the cartel proceedings began. “The situation is annoying, but does not weigh heavily in economic terms”, Wolfgang Pföhler said. The Board of Management will now review the possibility of appealing to Germany’s Federal High Court of Justice.

“With our proven strategy of ‘competence in acquisition and integration’ as well as ‘quality before quantity’, we will continue to generate viable and profitable growth”, declared a convinced Wolfgang Pföhler. “We are striving for generalised healthcare coverage in Germany to high quality standards for all segments of the population at socially acceptable prices. Not taking into account potential new acquisitions, our revenues in 2007 will rise to around € 2.0 billion.”