Annual Report 2012
United for Health
Key figures
sustainable growth
2,980 2,022
2008
2,163
2,280
2009
2010
2,557
2011
2012
Revenue in € m
323 241
242
2010
2011
210 171 2008
2009
2012
EBITDAR in € m
increasing investments 48%
52%
50%
50%
50%
50%
52%
48%
38%
62%
2008:
2009:
2010:
2011:
2012:
217
204
209
232
245
in € m
own funds
subsidies
intensive care
26,123
25,700 18,057
2008 Number of beds
18,030
2009
26,917
26,793
33,152
26,594
34,037
18,501
2010
Headcount (average full-time equivalents)
2011
2012
Group Key Figures according to IFRS for the fiscal year ended December 31, 2012 2012
2011
2010
2009
2008
1,999,018
1,742,353*
1,624,409
1,563,171
1,512,598
Number of beds
26,594
26,793
18,501
18,030
18,057
Headcount (average full-time equivalents)
34,037
33,152
26,917
26,123
25,700
Number of patients
Sales
€m
2,980.0
2,557.3
2,280.1
2,163.0
2,022.0
EBITDAR (Earnings before interest, taxes, depreciation, amortisation and rent)
€m
322.9
241.8
240.6
209.8
171.4
in %
10.8
9.5
10.6
9.7
8.5
EBITDAR margin EBITDA
€m
267.2
215.9
228.0
197.9
160.3
in %
9.0
8.4
10.0
9.1
7.9
€m
163.8
134.2
159.9
132.9
96.5
in %
5.5
5.2
7.0
6.1
4.8
€m
112.9
35.7
88.4
87.7
51.5
in %
3.8
1.4
3.9
4.1
2.5
Total assets
€m
2,641.5
2,459.2
2,025.3
1,901.2
1,894.4
Equity
€m
851.5
767.0
648.3
526.5
439.5
Equity ratio
in %
32.2
31.2
32.0
27.7
23.2
Financial liabilities
€m
652.9
499.9
462.0
401.8
460.9
Cash and cash equivalents
€m
145.9
182.6
262.6
124.1
196.1
Net debt
€m
507.0
317.4
199.4
-227.8
-264.8
1.9 x
1.5 x
0.9 x
1.4 x
1.7 x
118.4
181.6
248.3
290.3
290.3
8.9 x
7.4 x
7.6 x
6.0 x
4.0 x
EBITDA margin EBIT EBIT margin Consilidated net income for the year Return on sales
Net debt/EBITDA Subordinated capital
€m
Interest coverage factor (EBITDA / interest result) Net cash flow (operating cash flow)
€m
225.5
202.6
221.6
151.4
109.8
Investments in intangible assets and property, plant and equipment
€m
245.0
231.6
208.8
203.5
216.6
of which subsidies
€m
94.3
120.6
104.0
101.5
104.4
* figures were adapted for reasons of comparaibility Note: application of international accounting standards IAS 1 and IAS 19 for the 2012 fiscal year and retrospectively for the 2011 fiscal year
GIE
S
33
TR
DS
med ica lc en tre
E XPE
RTI
SE
AN
in rural regions
18
specialist clinics
13
psychiatric clinics
po
st-
acu
te/r e h
41
a b ilit a ti o n
c li n
ics
AGE S CA R E S T
standard-care district hospitals
OU S
29
A RI HV
in urban regions
UG
maximum-care district hospitals
RO
7
or nu
TH
cen tres f
T OW
or sf
ra ed p r a sh
EN
c. s et me ho ing rs
ME DI C A L
PA TI
healthcare facilitie r e s, o th ctices, medical
UC
RA
Y LS
R NE
FL
TU
Wide range of services
Locations
Sylt
Nord Volksdorf
Elmshorn Eimsbüttel Rissen
Barmbek
Eppendorf
Osdorf
Wandsbek Winterhude St.Georg
Bad Schwartau
Altona
Bad Oldesloe
Usedom Reinfeld Ahrensburg
Wilhelmsburg Bergedorf
Crivitz
Hamburg
Harburg
Fachklinik Reeseberg Helmsweg
Werder
Parchim Geesthacht
Waren
Bad Bodenteich Wolfsburg Lingen
Rathenow
Birkenwerder
Brandenburg Potsdam
Hannover*
Ludwigsfelde
Bad Münder
Teltow
Seesen Höxter
Horn-Bad Meinberg Essen
Tiefenbrunn
Goslar Bad Harzburg Clausthal-Zellerfeld
Tabarz Bad Salzungen
Schwalmstadt
St. Augustin Bonn
Butzbach Falkenstein Wiesbaden Langen
Lich
Stadtroda
Gera Greiz
Pößneck
Wiesen
Bad Salzhausen Bad Elster
Bad Orb Offenbach Seligenstadt Bayreuth
Alsbach-Hähnlein
Bad König
St. Wendel
Nabburg
Germersheim Kandel
Bad Rappenau
Oberviechtach Lindenlohe Burglengenfeld Bad Abbach Schaufling
Asklepios: Acute hospital somatic Asklepios: Specialist hospital psychiatry Asklepios: Post-acute/rehabilitation clinic Asklepios: Other healthcare facilities (among others: day hospital, healthcare centre, care facilities)
* Facilities under management MediClin: Acute hospital somatic MediClin: Specialist hospital psychiatry MediClin: Post-acute/rehabilitation clinic MediClin: Other healthcare facilities
Gernsbach Achern Durbach Offenburg Bad Peterstal-Griesbach Lahr Triberg Königsfeld Donaueschingen Bad Bellingen
Lindau
Burg Cottbus
Bad Düben Oschatz* Naumburg Leipzig Weißenfels
Melsungen Homberg/Efze
Reichshof-Eckenhagen
Königs Wusterhausen Teupitz Lübben
Coswig Vetschau
Göttingen
Bad Wildungen
Blieskastel
Schwedt
Soltau
Seevetal
Bad Sobernheim
Pasewalk
Plau am See Röbel
Aidenbach Bad Griesbach
München-Gauting Bad Tölz Lenggries
(among others: day hospital, healthcare centre, care facilities)
United for Health
Radeberg Hohwald Sebnitz
2
Asklepios annual report 2012
content
to our shareholders The whole is more than the sum of its parts
04 16
Successfully privatising clinics
20
Treatment to Asklepios standards
24
Prevention – the earlier, the more effective
28
Foreword from the management
04
Interview with CFO Stephan Leonhard
08
Report of the supervisory board
12
The bond
14
A strong group of clinics
18
Asklepios Kliniken Hamburg
22
Quality is not a matter of opinion
26
Preventative care for employees
30
content
group management report
33
consolidated financial statement
66
Economic report
35
Consolidated statement of financial position
68
Operating activities and business performance
35
Consolidated income statement
70
Overview of fiscal 2012
35
Consolidated statement of comprehensive income
71
Group structure
37
Consolidated cash flow statement
72
Corporate management
38
Statement of changes in group equity
73
Employees 40 Quality management and innovation General conditions
40 42
notes
74
44
Affirmation of the legal representatives
173
45
Auditor's report
175
Financial performance
45
Imprint
Net assets
48
Capital expenditure
50
Financial position
52
General economic conditions
42
General sector conditions
42
Overall statement on general conditions Financial position and performance
Overall statement on financial position and performance 54
Subsequent events
54
Risk and opportunity management
55
Current risk assessment
56
Summary and outlook
62
Forecast
62
3
4
Asklepios annual report 2012
Dr. Ulrich Wandschneider
Stephan Leonhard
Dr. med. Roland Dankwardt
Kai Hankeln
Our Group provides opportunities that are not possible in smaller structures. We use them to the advantage of patients and employees.
5
Dear business partners, dear readers, In a challenging environment in the healthcare sector, the Asklepios Group is performing well. We have achieved our goal of increasing consolidated sales in the 2012 fiscal year to around three billion euro – with year-on-year growth of € 0.4bn or 16.5 % 2011. Where has this growth in sales come from? On the one hand, MediClin AG was included in the Asklepios figures for twelve months of the 2012 fiscal year for the first time compared with just four months during 2011. In addition, internal growth over the past year was 3.4 %. Consequently, significantly higher patient numbers across the group were a key factor in addition to the consolidation effects for the increase in sales: Almost two million patients were treated in 2012, compared with around 1.7 million patients in 2011. In the internal, organic growth in particular, the measures initiated in 2011 to enhance the existing sales potential in the Group are delivering initial successes. In 2012, the Group generated earnings before interest, taxes, depreciation and rent (EBITDAR) of € 323m. The EBITDAR margin − a standard performance indicator in our sector − is at the reasonable level of 10.8 %. The increase in the average number of employees from 44,307 in the same period last year to 45,390 in 2012 coupled with wage increases led to personnel expenses rising € 281m to € 1,815m. As a result, the ratio of personnel expenses to revenue increased slightly from 60.0 % previously to 60.9 %. Strict cost management had an impact on the cost of materials, where the ratio fell from 22.8 % in 2011 to 22.1 %. The consolidated operating result (EBIT) for 2012 is € 164m, almost € 30m ahead of the previous year‘s figure of € 134m. Consolidated net income also rallied significantly from € 87m in 2011 to € 113m in the 2012 fiscal year. This figure does not include special depreciations relating to our Greek investment in the 2011 fiscal year, which impacted negatively on profits to the tune of € 51m. All three subgroups of the Asklepios Group contributed to the growth in sales 2012: the nationwide hospitals of the Asklepios Kliniken Verwaltung (AKV), as well as Asklepios Kliniken Hamburg (AKHH) and the MediClin Group. The contribution to earnings from the individual subgroups corresponded both to the size and structure as well as to the main emphases of the range of services on offer as well as the associated legal and specific reimbursement conditions.
6
Asklepios annual report 2012
Transparent delivery of the best medical quality The rising level of specialization among medical disciplines is creating an increasingly complex hospital landscape. So it‘s all the more important that patients and referring doctors can access reliable information that will enable them to select a suitable clinic. As a cofounder and member of the clinic portal www.qualitaetskliniken.de, Asklepios clinics bear objective comparison of medical and nursing performance and quality with competitors. Certified emergency rooms designed to the highest international standards or stroke units that offer the very latest stroke treatments represent important examples. However, they are not enough: Standardized, certified and secure processes of the highest standard must be a matter of course in the hospital and nursing environments. For this reason, Asklepios has introduced an Asklepios quality seal which is issued on-site by independent TÜV experts following a successfully passed inspection. We are working intensively on further developing and establishing this quality standard on a group-wide basis.
The entire spectrum of care – nationwide Our facilities cover the entire spectrum of care stages – from the standard-care clinics all the way to maximum-care hospitals. These are supplemented by medical centres and rehabilitation clinics as upstream and downstream care stages. In this context, even comparatively small hospitals offer highly specialised medical expertise. Just one example: The Asklepios specialist clinics at Munich-Gauting and Ludwig Maximilian University are working together to develop Munich into one of the leading centres in Germany for the treatment of lung disease. By adding services with a focus on cardiology, neurology, psychiatry, geriatrics or pulmonology, for example, we are also securing general acute care in rural areas. At the same time, specialist clinics along with appropriate training concepts are attracting young and dedicated junior staff, thus securing the future viability of facilities outside the major urban areas. We are growing by giving each of our hospitals a specific profile that is tailored to the local and competitive conditions.
Preventing the lack of qualified staff Our Group provides the Asklepios employees with that kind of opportunities that would not be possible in smaller structures. We offer medical and nursing staff at all facilities tried and tested training and advanced training options, which can of course be availed of across various locations. We will emphasize these advantages to an even greater extent in future when it comes to attracting and maintaining qualified staff for Asklepios.
Outlook Since the legal parameters for the sector in 2013 remains unchanged compared to the previous year, the ambitious economic challenges that the Asklepios Group and its facilities set themselves in 2012 still apply. In 2013, we will continue to focus on the issues of quality, personnel, efficiency and cost optimisation – on a group-wide scale. We have brought together numerous issues and individual measures in the “nextStep“ efficiency
7
programme. The associated investment and restructuring programmes have been assigned top priority and will be swiftly implemented. These targeted activities will secure continued internal growth. We will generate external growth by taking over facilities insofar as they represent a good regional and strategic fit for the Group and offer corresponding earnings potential. Demand for medical care will continue to grow. To secure a share of this growth and to meet our responsibilities to patients, employees and society, we must be commercially successful. Our position as the only family-run company among the leading healthcare providers helps us in this respect. We offer a high quality of patient care, we are innovative and commercially successful – which is why we will also continue to grow during the current fiscal year 2013. Asklepios ranks among the leading private clinic operators in Germany. This is also largely down to our 45,390 dedicated employees, who care about our patients’ well-being and thus make a key contribution to the success of Asklepios. I would like to express my sincere thanks to you all. Hamburg, April 2013
Dr. Ulrich Wandschneider CEO of the Asklepios Group
8
Asklepios annual report 2012
interview with CFO Stephan Leonhard Stephan Leonhard, Deputy Chairman of the Asklepios group management (CFO), talks about the challenges in the hospital market and the financing of the Asklepios Group Mr Leonhard, once again Asklepios successfully delivered strong results “below-theline“ last year. I assume that you are fully satisfied with the 2012 fiscal year? We are happy with what we achieved in 2012. And indeed, we have now also brought unadjusted consolidated net income almost back to the positive level of recent years. And with a margin of close to 11 per cent on an EBITDAR basis, I think we can also be justly proud of ourselves. However, developments on the income and cost side for hospitals in Germany were, in turn, extremely challenging in 2012 – and Asklepios is no exception. Unfortunately, the organic sales growth rate is slightly decreasing. Does this mean that you have demands in relation to healthcare policy? Asklepios has operated successfully in the German healthcare market for 28 years and will continue to do so. We are also seeing clear signs that politicians are aware of the key
» Asklepios has operated successfully in the German healthcare market for 28 years and will continue to do so «
role played by the hospital sector in the healthcare system and they are seeking to provide financial relief for the hospitals. We hope that these efforts will continue irrespective of the current record surpluses at the statutory health insurance providers. No responsible health policy can do without a functioning – also adequately remunerated – in-patient and outpatient sector. In this context, there‘s a lot of discussion about discounts for additional hospital services and, currently, the introduction of the orientation value. Can you explain what it‘s all about and how these developments impact on Asklepios? Ultimately, it‘s always about remuneration for hospital services. The consequence of discounts for additional hospital services is that services that exceed the level of the previous year‘s approved budget can only be remunerated through discounts and an additional rebate on the additional services that must be freely negotiated with the social service providers. Whereas the discounts are supposed to curb costs, for us they ultimately mean lower income per case. We believe that additional services, which are primarily the result of our high quality standards and of the demographic change, should not be penalised. Put simply, the orientation value determines the annual rate of increase of the remunerations starting in 2013 and is actually designed to reflect the actual cost burden. Unfortunately, the corresponding review period for this year ends in mid-2012, when the enormous cost burdens imposed, for example, by wage settlements first started to take effect. At this point, the two per cent recognized just about covers the general price increase. Compared with the previous system, the hospitals will certainly not be any better off in the future.
interview with cfo stephan leohnhard
At the start of this year, political experts from the government coalition declared one in five clinics in Germany to be superfluous. The closure of hospitals is one of those decisions that politicians are obliged to take given the scale and distribution of healthcare spending. However, I believe that increasing efficiency in the hospital sector does not necessarily have to involve closures. In terms of healthcare delivery, we see ourselves as a service provider to federal states and municipal authorities and we can turn loss-making facilities into efficient and profitable hospitals. However, no significant growth was achieved in 2012 through new takeovers – is that a problem for Asklepios? No, our revenues of three billion euro mean that we have already reached a critical size that will ensure our continued success independently. Our ownership structure means that we are not obliged to deliver a growth story to the capital market every quarter, but can concentrate on further developing the hospitals in our portfolio. Hospitals that emerge as potential candidates for a takeover are examined in detail. Ultimately, we want to include them as permanent members of our Group. However, the fact that our assumption that a wave of takeovers in the German hospital market will fail to materialise for the time being has proved so correct gives us no great pleasure. We are always interested in facilities that match our requirements. And we will also be in a position to complete transactions again. In the final analysis, we offer municipal hospitals, for example, interesting prospects, as our previous locations show. Asklepios still has a high but reducing level of liquid funds at its disposal. Do you envisage a further issue on the capital market in the near future? We still feel that we are in a very strong financial position. This applies for the liquid funds as well as for our open credit lines with which we comfortably finance on-going business, investments and growth. As regards the reduction in financial assets you refer to, it goes without saying that our investment in Rhön-Klinikum AG is an influencing factor. Since we are a family-owned company that is not listed, our ability to raise finance from our own funds is an inherently important issue for us. The fact that profits are fully reinvested in the Group enables Asklepios to maintain an increasing equity ratio despite the growth of the company, which also gives us access to loan capital at attractive rates. To come back to your question about an issue: We are happy to access loan capital in different ways. Of course, our long-standing relationship with the banks is our main focus, but we have also had positive experiences with our bond. So we could envisage availing of other borrowing instruments. Basically, we are experiencing growing demand from investors who rate our stable business model with its strong cash flow.
» We offer municipal hospitals interesting prospects, as our previous locations show «
9
10
Asklepios annual report 2012
How will you develop the financing structures at Asklepios further? Historically, most of the financing initiatives have been concentrated independently from one another at the level of the operating companies – AKV, AKHH and MediClin. Group financing is taking place at group level issue. Today, most of our important new financing initiatives are at holding level. Furthermore, we continuously optimize our treasury in the Group and we also made significant progress in this area in 2012. Thus, we were able to reduce our cost
» We are experiencing growing demand from investors who rate our stable business model with its strong cash flow «
of capital by roughly five million euro through the refinancing of expensive, already existing loans during 2012 fiscal year. The past year saw Rhön-Klinikum and Fresenius initiate a large-scale merger in the German hospital market, which also attracted significant media attention. How do you see the role of Asklepios in this context? A merger involving two of the major providers in the healthcare market would naturally have consequences for the sector as a whole. For our part, I come back to what I said previously: As a family business, Asklepios is geared towards the long term and intends to keep all options open in relation to Rhön-Klinikum AG. The latest decision by the German Federal Antitrust Office (Bundeskartellamt), which permits us to acquire 10.1 per cent of RhönKlinikum subject to certain conditions, confirms our view in this context.
interview with cfo stephan leohnhard
11
12
Asklepios annual report 2012
Report of the Supervisory Board of Asklepios Kliniken GmbH During the 2012 financial
to the final outcome of the Supervisory Board‘s own review,
year, the Supervisory Board
no objections were raised regarding the consolidated
monitored
activities
financial statements, the annual financial statements and
of the management and
the management reports. The Supervisory Board took
informed itself on regular
note of the annual financial statements and consolidated
basis of the performance
financial statements presented by the management.
of Dr. Stephan Witteler
the
the
business,
the
position and the planned
The Supervisory Board recommends that the shareholder
operating
of
meeting adopts the 2012 annual financial statements of
policy
Asklepios Kliniken GmbH
Asklepios Kliniken GmbH and approves the consolidated
based on written and verbal reports provided by the
financial statements for 2012. The Supervisory Board
management.
endorses the proposal by the management to carry forward the annual result. The Supervisory Board would like to thank
The Supervisory Board was promptly and comprehensively
the management as well as all members of staff for their
informed of all events of significance to the company.
hard work during the past fiscal year.
During the 2012 fiscal year, the Supervisory Board held four ordinary meetings as well as one extraordinary meeting. At
Falkenstein, 25 April 2013
these meetings, the management reported the performance of the business along with all events of significant importance to the Supervisory Board. The Supervisory Board carefully examined and – where necessary – approved matters of significant importance, namely transactions requiring its approval in accordance with the law, articles
Dr. Stephan Witteler
of association and by-laws. The General Committee of
Chairman of the Supervisory Board
the Supervisory Board dealt with various issues during the 2012 fiscal year and took the relevant decisions. The consolidated financial statements, the annual financial statements as of 31 December 2012 as well as the group management report and the management report were examined by the auditors, PriceWaterhouseCoopers AG Wirtschaftsprüfungsgesellschaft, and approved without reservation. The auditor‘s reports were supplied to all members of the Supervisory Board and were dealt with in detail by the Audit Committee on 24 April 2013 and at the balance sheet meeting of the Supervisory Board on 25 April 2013. The auditors also took part in these meetings and reported to the Supervisory Board regarding the main findings of their audit. The Supervisory Board acknowledged the findings of the audits of financial statements. According
Report of the Supervisory Board of Asklepios Kliniken GmbH
13
14
Asklepios annual report 2012
The bond
Asklepios on the capital market Asklepios Kliniken GmbH has been present on the capital
The new year saw this positive price trend continue. On
markets since September 2010. The issue of a company bond
27 February 2013, the Asklepios bond reached its highest
with a volume of € 150m coincided with the first significant
level to date of 107.0%. When the annual report went to
financing measure at group holding level. Previously,
press on 26 April 2013, the price stood at 104.0 %. The
Asklepios Kliniken Verwaltung GmbH and Asklepios Kliniken
bond was placed for issue to end investors, most of whom
Hamburg GmbH were financed separately by the subgroups.
will retain the bond to maturity. However, the reporting year also recorded good liquidity of the bond, with the Stuttgart
The seven-year bond was placed on the market with a
and Frankfurt exchanges guaranteeing tradability of the
fixed interest rate of 4% at an issue price of 99.754 %.
security on a daily basis.
The favourable interest level and long-term maturity make the bond an attractive source of financing for Asklepios. Investors profit from a debtor with a high credit rating, and the bond is currently listed significantly above the
The Asklepios bond
issue price. The funds received from the issue were used to extinguish existing liabilities and for general financing of corporate development. At the same time, the bond which matures in September 2017 broadens the loan capital basis and optimises the maturity profile of Group financing.
Issuer Guarantor
Asklepios Kliniken GmbH Asklepios Kliniken Verwaltungsgesellschaft mbh
ISIN
XS0542428833
As a company in the healthcare sector and due to the long-
WKN
term orientation of its business model, Asklepios generates
Issue date
28.09.2010
predictable, stable cash flows. The Group‘s strong equity
Maturity date
28.09.2017
ratio, high level of liquid funds and leading position in
Nominal interest rate
4.00 % p.a.
the German hospital market combine to create a highly attractive investment for institutional and private investors
Issue price*
A1EWQ8
99,754 %
Volume
€ 150 m
particular importance to the timely and comprehensive
Face value
€ 1,000
reporting of business developments. In addition to the
Coupon type
annual report, investors are informed by quarterly interim
Interest payment
reports including an interim financial statement for the
Interest date
both in Germany and abroad. In addition, Asklepios attaches
Group. The company also publishes current corporate news
Fixed Annual 28.09.
about events of relevance to the financial markets.
Price on 31 Dec. 2012*/**
103.0 %
The bond price continued along a positive trend during 2012.
Price on 26 Apr. 2013*/**
104.0 %
Following an issue price of 92.0 % on 2 January 2012, the bond was listed above its nominal value for the first time at the middle of the year. The beginning of November saw the high for the year of 104.4%. At year-end 2012, the bond price lag was at 103.0% on the Stuttgart exchange.
* As a percentage of nominal value ** in Stuttgart
the bond
Asklepios Bond 2010 (2017) in % 107.5
105.0
102.5
100.0
97.5
95.0
92.5
90.0 2012
2013
15
16
Asklepios annual report 2012
The size of the Asklepios Group also allows it to think beyond the immediate future. Projects like the Green Hospital or the Asklepios Future Hospital are already delivering an important impetus, but will only set standards for the hospital of the future in the medium to long term.
17
The whole is more than the sum of its parts Healthcare facilities in the Asklepios Group (consolidated)
2004: 47
2006: 67
2008: 74
2010: 78
2012: 141
Asklepios is one of three major clinic operators in
nursing facilities and eleven medical care centres
Germany and has developed since the mid-eighties to
complement the Asklepios service offering, it is safe
become Europe‘s largest family-owned business in the
to say that we are represented nationwide. We are now
hospital sector. In this context, we use our size as a
offering our services to an even greater extent across
means to an end. Our structure enables us to realise
the entire spectrum of healthcare levels and medical
benefits for patients in all Asklepios facilities. And it
disciplines.
helps us make our contribution to the long-term security and expansion of nationwide healthcare delivery in
Asklepios and MediClin facilities are already establishing
Germany.
healthcare clusters that allow us to deliver even more targeted treatment. In this case, we work together
People are at the heart of the Asklepios philosophy. At
not only within the Group, but naturally also in close
the same time, we firmly believe that we can only meet
cooperation with physicians in private practice as well
our objectives if our medical care is provided in the
as other specialist and acute clinics or medical care
context of an efficient and economically viable policy
centres. We will continue to expand our cooperation
for the industry. And if we can find solutions to the
within the Group and with external medical networks
long-term challenges that the healthcare system faces.
and, by shortening treatment duration, we will increase
Rising expenditure due to demographic changes and a
patient benefits and drive efficiency in the healthcare
scarce supply of qualified personnel, particularly in rural
system in equal measure. As an integrated healthcare
regions, are just two examples of this.
group, we also want to further expand our service offering both in medical and geographical terms,
Following our majority shareholding in MediClin AG,
thereby delivering a service to patients, employees and
whose total of around 8,100 beds in 34 clinics, seven
society simultaneously.
18
Asklepios annual report 2012
A strong group of clinics
The acquisition by Asklepios of a majority stake in MediClin
of companies very well – and is particularly aware of our
AG in September 2011 completed the final key growth step on
strengths across a range of medical disciplines. Of course,
the way to reaching a critical mass that will secure the long-
this is a significant help in ensuring seamless cooperation
term independence of the Group in the healthcare market. As
under the Asklepios umbrella.
the most recent subgroup, MediClin was fully included in the consolidated financial statements of the Asklepios Group for the first time in the 2012 fiscal year. Today, Asklepios is an integrated healthcare provider that is represented throughout Germany and across all levels of in-patient and out-patient care.
Frank Abele, Chairman of the Management Board of MediClin AG since November 2011, explains how cooperation takes place in the Asklepios Group. Mr Abele, it will soon be two years since Asklepios took a majority holding in MediClin. Is your membership of this new Group making itself felt at this stage? It certainly is. We are already realising synergies in relation to procurement, for example. Also in the medical area, such
» Our common goal is to combine highquality healthcare with efficient structures and processes «
as providing advanced training for our clinic staff or applying collective quality standards, the level of cooperation is intensifying. In my view, however, the most important and
How do you see MediClin and Asklepios developing in
exciting issue in the medium term is the establishment of
the future?
regional clusters, which will enable us to offer integrated
Together, we are capable of implementing our strategy of
treatment and further improved care structures. We are
cross-sector and integrated medical services even more
working intensively to bring this about and have already
effectively and quickly. At present, the main focus is
established concrete projects. Our Soltau clinic with its
explicitly on organic growth, which will see us, a group
strong focus on rehabilitation, for example, complements
of clinics, systematically expand our capacities in areas
our neurology services. By working with the Asklepios
of buoyant demand and pursue more intensive market
acute clinics in Hamburg, we are jointly enabling integrated
penetration. However, as MediClin, we also profit in general
treatment in this field.
terms from our strong Group, for example, in what are referred to as ‚shared services‘ and when competing for new
What‘s cooperation like between MediClin the listed
clinics. At the same time, we bring a great deal of experience
company and Asklepios the major family-run company?
and expertise, particularly in the fields of post-acute and
We‘re a very good match with no need for either of us to
nursing care, into the Group. I am certain that these areas
significantly alter our corporate strategies. Above all, however,
will remain attractive in the long term and will become
our corporate philosophies are very compatible. Our common
increasingly important simply because of demographics.
goal is to combine high-quality, innovative healthcare with
This pooled knowledge is of benefit not only to patients and
efficient structures and processes. This is due not least to
the Asklepios Group bit also to the shareholders of MediClin
the fact that Dr Wandschneider, my predecessor of many
AG.
years at MediClin is currently the chairman of the Asklepios group management. Dr Wandschneider knows both groups
A strong group of clinics
19
The next step Today, the Asklepios Group combines 108 hospitals, a further 33 healthcare facilities and nine associated clinics in three subgroups under its umbrella. In many cases, these facilities still operate largely independently and are sometimes in competition with each other. Due to the rapid growth in recent years - from a small base of just 25 clinics as recently as 2000 - individual solutions applied for the most part, even in the administrative area. The stated objective of the Asklepios Group is to change this. With regard to our service offering, we aim to develop a medical portfolio that is coordinated across locations while at the same time allowing for further organic and inorganic growth. From an administrative perspective, the clear division of responsibilities and processes at local, regional and central level is a particular priority. The “nextStep“ project is the group-wide programme of measures that will enable the achievement of these goals
“Southern MecklenburgWestern Pomerania is an example of how the links between Asklepios and Mediclin locations can form medical clusters“
by 2015. Divided into ten sub-areas, it deals with both with projects in market development and with measures aimed at increasing efficiency and thus reducing costs and resource
Kai Hankeln is a member of the Asklepios group
consumption. The provision of a uniform IT environment
management since July 2012. He is responsible
with the group-wide implementation of SAP represents a
for the Asklepios locations in northern and eas-
key component. One thing is certain: Notwithstanding the
tern Germany outside Hamburg and for psychiatry.
measures in the medical and administrative area, Asklepios
From 2007 to 2012, Kai Hankeln was director of
will certainly not abandon its successful principles of
the largest Asklepios clinic in the Hamburg Nord
decentralized management in the future.
district.
Acute hospital somatic Acute hospitalAsklepios: somatic Asklepios: Other healthcare facilities Other healthcare facilities (among others: day hospital, healthcare centre, care facilities)
s: day hospital, healthcare centre, care facilities) MediClin: Acute hospital somatic MediClin: Specialist hospital psychiatry MediClin: Post-acute/rehabilitation clinic somatic MediClin: Other healthcare facilities
Acute hospital (among others: day hospital, healthcare centre, care facilities) Specialist hospital psychiatry Post-acute/rehabilitation clinic Other healthcare facilities
s: day hospital, healthcare centre, care facilities)
Usedom
Crivitz Parchim
Crivitz
Parchim
Werder
Waren Plau am See Röbel
Werder
Waren
Usedom Pasewalk Schwedt
Plau am See Röbel
Pasewalk Schwedt
20
Asklepios annual report 2012
Asklepios operates the public sector healthcare contracts in a responsible manner. The nationwide acute-care clinics included in the hospital plan for the federal states represent our core business. In 2012, 85 per cent of our sales came from the statutory health insurance providers.
21
Successfully privatising clinics 120
120
120
120
120
0
0
0
0
0
-60
-60
-60
-60
-60
2004
2006
2008
2010
2012
Earnings trend (EBITDA) in € m at the Hamburg clinics since the Asklepios takeover
The acquisition of what are frequently loss-making
Irrespective of how the acquired clinics differ, also in
public hospitals and their development into successful
economic terms, restructuring is based on a broadly
healthcare facilities - the development of the Asklepios
standardised and proven approach. Integration into
Group has been founded on this tried and tested
the Asklepios medical and nursing concept and the
business model for three decades. During this time,
leveraging of economies of scale and synergies share
Asklepios has accumulated extensive integration and
equal priority on the agenda with making good the lack
turnaround expertise and applied it to many hospitals
of investment that applies in most cases. We implement
in the Group. In this way, we are helping to secure the
our measures in defined phases over a period of some
provision of community-based medical care and are
five years in order to bring about the desired turnaround
opening up new horizons for hospitals.
that will secure the long-term viability of the facilities.
In cases where Asklepios takes over individual clinics
At the same time, the issue of improving healthcare
or clinic locations, these generally offer significant
efficiency
potential for restructuring. This manifests itself as a
important aspect: Since the equity holders do not
negative or merely weak positive operating result and
receive any dividends, all profits - even those achieved
inadequate investment in buildings and equipment in
through efficiency gains - are reinvested in the Group
the long term. When it comes to acquisitions, we focus
and are therefore available for further investment in the
primarily on hospitals a difficult economic situation
locations.
where we can apply our restructuring expertise in order to permanently integrate them into our network. Asklepios takes over the public sector health care contracts that are transferred along with the facilities in a responsible manner.
at
Asklepios
always
includes
another
22
Asklepios annual report 2012
Asklepios Kliniken Hamburg – providing better healthcare for the metropolis As Germany‘s biggest hospital privatisation to date, the
Harburg in 2012 marked one of the last major steps in the
majority takeover of the clinics in the City of Hamburg
modernization process at the Hamburg locations. However,
represents a special milestone in the corporate history
the level of investment also remains high after the most
of Asklepios. Every second hospital patient in the City of
important refurbishment steps were completed. This is
Hamburg is cared for in a facility operated by Asklepios
illustrated by the fact that Asklepios is currently planning a
Kliniken Hamburg.
dormitory for student nurses on the grounds of the Asklepios Klinik Barmbek. In total, Asklepios will have invested around
For Asklepios, the Hamburg clinics are also an example of
half a billion euro of its own funds in the Hamburg clinics
how only the interaction between targeted investments,
by 2015.
synergies within a strong group of clinics, the optimization of processes and the expansion of high-quality medical
The success is reflected by rising patient numbers and a
services can bring about the economic turnaround of
high level of organic growth. With sales of 1.1 billion euro
healthcare facilities. Since the gradual majority takeover that
and an operating margin consistently above ten per cent, the
commenced at the end of 2004, 40 specialist departments
Hamburg health cluster is currently both a medical and an
at the ten Hamburg locations have been refurbished or
economic powerhouse in the Asklepios Group. Eight years
substantially extended. While the administrative headcount
on from the start of privatisation, Hamburg as a healthcare
was reduced during the course of cutting out unnecessary
centre enjoys a much broader spectrum of medical services
bureaucracy, the number of full-time jobs in the medical
while Asklepios Kliniken Hamburg gives the city a hospital
field has increased considerably - by approximately 30 per
company that has been transformed from a loss-making
cent in 2012 compared to 2004. Overall, the Asklepios
enterprise into a reliable contributor to the exchequer.
Kliniken Hamburg employed an average of 10,632 full-time employees in 2012.
And last but not least, Asklepios is now a Hamburg company: As part of the takeover of the former Landesbetrieb
The construction of a new emergency clinic at a cost
Krankenhäuser, Asklepios Kliniken GmbH relocated its head
of over 50 million euro on the site of Asklepios clinic in
office to Hamburg.
By 2015, Asklepios will have invested half a billion euro of its own funds in the Hamburg clinics. Construction of the new emergency clinic in Harburg
Asklepios Kliniken Hamburg – providing bet ter healthcare for the metropolis
“Our goal is to retain competent, experienced and motivated staff for the long term at a hospital acquired by us“ Dr. h.c. Peter Coy, Group Managing Director of AKV
A proven privatisation strategy
treatment is offered in specialised medical disciplines at
In the long term, Asklepios is targeting a sustainable
clinics in Germany, including those outside metropolitan
operating margin in the double-digit range for the hospitals
areas.
it has acquired, depending on their location and service spectrum. Put simply, the restructuring of a facility acquired can be divided into three phases over a period of five
Retaining skilled jobs
years: Within a few months, the clinic will be integrated
As part of a privatisation, Asklepios takes on all employees,
into the structures of the Asklepios Group so that it can
including senior executives and senior consultants. Equal
already start to benefit from possibilities offered by the
importance is attached to training positions and existing
new Group. Staff members familiarise themselves with
training facilities are maintained and integrated into the
the strategy and philosophy of Asklepios, medical and
national education and training concept operated by
administrative personnel are actively involved in the transfer
Asklepius. One example of how long-term job security was
of knowledge within the Group. The main renovation phase
ensured following a successful restructuring is the Asklepios
takes place during the first eighteen months or so, with
Klinik Pasewalk in Mecklenburg-Western Pomerania. New
the aim of getting the operational side back into the black.
departments for multi-disciplinary early rehabilitation and
During this phase, for example, treatment procedures are
respite care, as well as the setting up of a medical care centre
standardised, cost-cutting measures initiated and existing
resulted in 35 new jobs. In total, 530 jobs and over 120
investment deficits reduced. At the same time, the clinic‘s
training positions were retained in a structurally weak region.
profile is raised by the development and expansion of areas of medical specialisation. The transparent Asklepios quality
Guaranteed local healthcare
management system is also introduced.
The aim in Pasewalk and at all Asklepios locations is to Further
optimization
frequently
involves
completely
secure sustainable, expert healthcare close to home. The
rebuilding functional buildings such as operating theatres,
range of existing departments and services will be further
intensive care units or emergency rooms. The improved
developed and supplemented in accordance with regional
medical reputation among patients and referring physicians
needs. Regional bottlenecks in the delivery of treatment can
and the integration with other out-patient and in-patient
be prevented by linking several clinics that offer different
care services in the region help to generate organic growth.
and complementary services. Cooperation with physicians
Additional income is derived from service offerings that
in private practice, therapy, rehabilitation and nursing
go beyond the spectrum of services available through the
facilities also makes it possible to treat suitable symptoms
statutory health insurers. The Asklepios International Patient
with appropriate integrated concepts.
Service transfers international patients to whom expert
23
24
Asklepios annual report 2012
Hospitals probably focus more closely on people than any other company. This confers an obligation on Asklepios to ensure that patients‘ well-being always comes first in all its decisions.
25
Treatment to Asklepios standards A standardised group-wide complaint management system helps us continuously improve the relationship especially with our patients. If the worst comes to the worst, our CIRS (“Critical Incident Reporting System“) error-reporting system offers all employees the opportunity to report adverse events and “near misses“ anonymously. Particularly in those areas where standards or day-to-day practices have yet to be optimised, we focus our attention on ensuring the We promise our patients in all hospitals treatment to
safety of patients and staff.
Asklepios standards. This means: Outstanding medical services based on our own exacting quality standards
So it‘s clear that the highest quality of diagnosis and
– which far exceed the legal requirements. In addition
treatment is no coincidence at Asklepios. We verify this
to the quality of the medical outcome, our focus is on
quality: with recognized independent certification, such
safety and patient satisfaction. Our aim is to provide
as the KTQ® method of cooperation for transparency
the best possible medical care for our patients.
and quality in healthcare. KTQ certification scrutinises the areas of patient care as well as work organisation,
Over the past few decades, Asklepios helped develop
further
hospital quality systems now regarded as authoritative
certification is accompanied by a detailed quality
training,
safety
and
management.
and was the first company to apply them. For more than
report, which is published by every inspected clinic.
ten years, we have been implementing the Asklepios
This transparency reassures our patients at Asklepios
Model for Integrated Quality Management (AMIQ)
that they are receiving the best possible care.
across our network of clinics. AMIQ draws on a range of recognized quality management systems – bringing
Hamburg, April 2013
the best of all systems together in a single model. Quality
management
at
Asklepios
clinics
goes
beyond discussing the success of the treatment. The configuration of functioning processes, comprehensive measures to ensure for patient safety, external
Dr. med. Roland Dankwardt
independent certifications and surveys of patients,
Medical Director of the Asklepios group
referring physicians and staff are examples of this all-
Group management
inclusive approach.
The
26
Asklepios annual report 2012
Quality is not a matter of opinion
Get better! To meet this requirement, the Asklepios clinics
thoroughly investigated. This takes place in various ways
measure the quality of their treatment. It is assessed using
that include internal dialogue and the medical board audit,
scientific methods along with the nationally established
which equates to a peer-review process.
system of external quality assurance. What do the facts and figures reveal? What do others do better? Several times a
Different professional groups work together in our hospitals
year, the Asklepios clinics ask themselves these questions
and must coordinate with one another.
and derive consequences from the results. Regular exchanges of information between senior consultants at the
Increasingly complex technical devices are used in ever-
individual clinics help find answers and disseminate good
growing numbers. A wide range of medical products is
ideas.
available. Even people suffering from severe secondary conditions or patients of advanced years are undergoing
Monitoring of results using a system of quality indicators
complicated surgical procedures. In these situations, it is
specially developed for Asklepios – he Asklepios quality
essential to avoid risks. When it comes to surgical safety,
monitor – highlights compliance with all quality indicators
Asklepios
throughout the group. This system has sensitive settings that
beginning of 2010, the “Asklepios surgical safety check-list“
enable immediate detection of even the smallest changes
has been introduced in all clinics as a binding regulation
and implementation of quality management programmes.
based on recommendations from the WHO.
follows
international
standards.
Since
The individual Asklepios clinics are supported in exercising their functions by a central office, the quality department. To optimise the treatment of diseases,
various
Asklepios
clinics have set up medical centres
that
multidisciplinary
can
provide treatment
Group division quality certified according to DIN EN ISO 9001:2008
for patients. All of the services required to treat a specific group of diseases - such as vascular diseases - are bundled and provided in a coordinated manner at a single location. Specialist medical societies have already defined important quality requirements for the centres. Asklepios complies with these quality requirements and obtains the relevant certification from the respective professional bodies. Certification from specialist medical societies is renewed on
This check-list is used to query safety-relevant
a regular basis.
aspects in the surgical team before the use of anaesthesia, before surgery commences and
The Medical Boards are available as an advisory body to
before post-operation recovery. In this way, the risk
the Asklepios clinics. The boards include senior consultants
of mix-ups or complications, for example, can be
from the same disciplines. Their duties in this context
significantly reduced. The additional use of patient
include providing advice in relation to medical innovations
wristbands ensures that the identity of the patient
and quality assurance for existing medical procedures. The
being moved to the operating theatre can be reliably
Medical Boards systematically assess the results from the
checked, even if the patient is unable to respond.
quality assurance. Any unusual results are promptly and
the
Qualit y is not a mat ter of opinion
arranged in a way that avoids delays in receiving treatment? Are discharge reports available? Is the GP involved in the treatment? These are just some of the questions whose At present, it is very difficult for patients and their families
answers provide us with valuable information at first-hand.
to obtain objective information about the performance and quality of a clinic. Even the existing Internet search engines or portals scarcely provide any more information than the statutory quality reports or they are restricted regionally. Some of these are financed through advertising, thus raising doubts about their objectivity. The Qualitätskliniken.de portal bridges this gap. The Asklepios Group is a co-founder and member of this portal. The aim of this new portal is to enable patients,
Minor cause – major effect?
their families as well as the referring physicians to compare
The CIRS (Critical Incident Reporting System) error reporting
hospitals in terms of quality. As a result, the Asklepios
system is a key component of clinical risk management at
clinics subjecting themselves to this objective comparison.
Asklepios. It is used to ensure early detection of errors and adverse events, thus minimising risk. The “Asklepios CIRS concept“ was developed by the quality department based on
Complaint management
recommendations issued by the German coalition for patient
In our facilities, we operate a positive complaints culture that
safety Aktionsbündnis Patientensicherheit e.V. (APS). Prior
aims to address the concerns and needs of our patients and
to its introduction in the Group, it was extensively tested at
their families in a constructive manner. For Asklepios, the
a pilot clinic and has undergone continuous development
priority is to learn from such events and to critically review
since then.
our performance at all times. Supporting this objective is our standardised group-wide complaints management
All staff members are directly involved in CIRS and events
system - which includes qualified contacts at the clinics
that jeopardize patient safety or indicate weak points can
and mandatory procedures designed to enable a solution
easily be reported by any employee from a PC. The message
to be found together with the patient and family members
is anonymous to the extent that it is not possible to trace its
as quickly and efficiently as possible. A quality seal gives
origin. Messages received are systematically recorded and
us the opportunity to have our high standards of customer
processed in the reporting loop. This enables the valuable
service independently verified.
information from employees across all departments can be promptly and effectively used to bring about improvements
Regular surveys of patients and doctors in private practice
and prevent errors. Following a decision by the group
contribute to a continuous improvement process. Are the
management, CIRS will gradually be rolled out at all
doctors and nursing staff who administer treatment friendly
Asklepios clinics. The first sub-target is to implement it in
and attentive? Does the food taste good? Are processes
all acute clinics by the end of 2014.
27
28
Asklepios annual report 2012
Preventative care for employees includes many aspects. With this in mind, the central pharmacy at Hamburger Asklepios Kliniken supplied some 1,200 doses of influenza vaccines for the preventative treatment of employees at the Hamburg location alone during the last influenza season.
29
Prevention – the earlier, the more effective
70 % of all clinics* offer all three topics • Stress management • Exercise and diet • Addiction prevention
ACTIVE
of the “Asklepios Aktiv“ programme. United for Health
A further
14 % offer two of the three topics. * in the area of AKV and AKHH
Prevention is an issue of personal importance to
To maintain a permanent awareness of health promotion
Asklepios founder and sole shareholder Dr. jur. Bernard
in clinical practice, Asklepios plans to appoint prevention
gr. Broermann. Back in his student days, Dr. gr.
officers. They are responsible for all preventative
Broermann wanted to set up a pharmaceutical company
measures at the clinics and try – for example, using
to produce causal medication remedies. He also believes
initiatives like “Asklepios Aktiv“ – to inspire as many
that prevention is the most effective remedy when
of our employees as possible to take an interest in this
it comes to medicines. Compared with conventional
topic.
medicines that are mostly effective against symptoms, a causal therapy fights the causes of a disease. If these
As part of the “Asklepios Aktiv“ programme, information
causes can be counteracted in advance, the likelihood of
about health issues has been provided, for example, on
an infection is minimised.
the Group‘s Intranet since 2010. The clinics themselves hold courses on topics such as stress management,
Dr. Broermann retained these ideas down through the
nutrition and addiction as well as sports activities.
years. And it was these ideas that inspired him to found
Suggestions from employees that go beyond the scope
the “Dr. Broermann Stiftung“ over twenty years ago to
of the “Asklepios Aktiv“ programme are also welcomed
focus on the issue of prevention – as a ‚foundation for
and supported! The promotion of health at the Asklepios
the prevention of disease in children and adolescents‘.
Group is therefore based on a successful principle: The company is responsible for providing a healthy
Over and above the foundation, the issue of prevention
workplace and provides additional practical guidance so
is an important priority throughout our company. The
that employees can themselves take responsibility for
“Asklepios Aktiv“ initiative focuses on all aspects of
following a healthy lifestyle.
prevention at the clinics. Sports and fitness programmes are offered free of charge to employees at all locations.
30
Asklepios annual report 2012
Preventative care for employees – the key to employee health Particularly in social professions and therefore also in
with the challenge of managing themselves and their staff
hospitals, people often have to cope with severe physical
through periods of high stress, a large variety of tasks and
and mental stress. In many cases, doctors and nurses are
change processes. The aim of this seminar was to help them
people who want to help others and who develop a strong
overcome this task,“ explains Anja Rhode.
sense of empathy. If ever-increasing workloads resulting from, among other things, proliferating bureaucracy leave little time for the actual job, disillusionment and a sense of personal insult are often the result. Physical exhaustion is then compounded by mental exhaustion and leads, in the worst case scenario, to a syndrome such as burnout. For this reason, it is important to create a sufficient distance from
Representatives for health
the work environment on a regular basis to prevent a state of exhaustion from setting in. To better assess and promote their own health - this is the goal of the prevention programmes for stu-
Active together
dents of nursing, for example, at the Asklepios Klinik
Three years ago, Asklepios founder and sole shareholder Dr.
Pasewalk. Individual prevention programs prepare
Bernard gr. Broermann announced the “Asklepios Aktiv“
students at this clinic for the day-to-day challenges
programme to enable employees to keep fit and healthy.
of the work environment. Almost 90 per cent of stu-
The programme now not only includes sports courses, but
dents consider their daily work as either stressful or
also nutritional counselling, courses for giving up smoking or
very stressful - and an equally high percentage rates
events for reducing stress. “Asklepios Aktiv“ motivates our
the programme as a valuable aid to help them cope
employees not only to become active together, but also to
better with the requirements. Particularly for nurses,
become actively integrated into the initiative, for example,
physical activity is also part and parcel of the daily
as group leaders. In addition to boosting staff motivation
routine in hospitals and a good level of fitness is a
through group dynamics, the courses also provides them
basic requirement if they are to cope.
with the opportunity to get to know colleagues from other departments. “We want to help our employees achieve
Therefore, a weekly training programme of 90 minu-
a good balance between their workload and personal
tes was added to the timetable. Individual analyses
fitness,“ explains Anja Rhode, who heads the group division
are carried out to systematically promote personality
responsible for HR and social matters. The program is
aspects. In addition to relaxation and movement exer-
set to expand further and will offer additional courses
cises, the programme also includes muscle toning
and promote the establishment of gyms in the hospitals.
and endurance exercises.
Employee health is permanently established as a key area of personnel management. Incorporating two practical approaches, the seminar “Health as an Executive Function“ is aimed at management levels I (senior consultants, clinic managers, department directors) and II (assistant medical directors, head nurses and other team leaders). By the end of April 2013, 162 executives at level I and 542 at level II had already taken part. “Executives are today faced
Preventative care for employees – the key to employee health
Dr. Broermann stiftung
This includes, in particular, the avoidance of risk factors
“Asklepios is aware of its social responsibilities. We have therefore made the commitment to health maintenance and preventative care an integral part of our corporate philosophy. Every Asklepios clinic develops joint projects with local partner schools. And I‘m delighted with every hospital and school that follows our initiative.“ Dr. Bernard gr. Broermann
through media-based information, active education and medical training programs in the area of age-appropriate disease prevention. The foundation‘s purpose is realized in particular by its implementation of and support for sustainable prevention projects, such as those dealing with alcohol abuse, drug addiction, eating and nutritional disorders, behavioural disorders, child delinquency, youth crime and violence in schools. In addition to these important primary prevention activities, the foundation also promotes projects and measures
The Dr. Broermann Stiftung has been committed to
associated with secondary prevention - which includes
preventative and therapeutic health care for over twenty
preventing the advance of the early stages of an existing
years. The foundation‘s key aims are to promote healthy diets
disease. The foundation also engages in tertiary prevention
and the application of information and findings from holistic
- which focusses on preventing any further aggravation of
medicine. It seeks to avoid diseases through information and
diseases that have already manifested themselves.
education, especially for children and adolescents. With the goal of sustainable preventive health care, the foundation
www.broermannstiftung.com
also provides targeted funding in support of this cause.
Health and leisure activities complement each other perfectly when it comes to water skiing. So with this in mind, another water ski camp was also organized in 2012 in Bad Griesbach for children and young people aged 8 to 16 years. “Under the heading ‚Partnering Sports’, we support work with children and young adults in many sports clubs,“ explains Managing Director of Asklepios Klinik Bad Griesbach, Frank Tamm. The project was first implemented in 2011 with the financial support of the Dr. Broermann Stiftung, with organisational and financial assistance provided by Asklepios Klinik Bad Griesbach and the Obernzell water-ski team as the event hosts. What was particularly surprising was the commitment and enthusiasm of the children, despite the changeable weather conditions. As with many other initiatives of the Dr. Broermann Stiftung, the camp employs the slogan “It‘s cool to be healthy and to stay healthy“.
31
32
Asklepios annual report 2012
Group management report
group management report Economic report
35
Subsequent events
54
Risk and opportunity management
55
Forecast 62
33
34
Asklepios annual report 2012
Group management report
Group management report for the fiscal year 2012 A. Economic report I. Operating activities and business performance a. Overview of fiscal 2012 Asklepios maintained its position as a leading private hospital group in Germany and presented good figures in fiscal 2012. Despite the nationwide trend towards an increase in collective wage agreements and ongoing high pressure on prices owing to discounts for additional hospital services, earnings before interests, taxes, depreciation, amortisation and rent (EBITDAR) increased by 33.5 % while revenue rose by 16.5 %. The level of organic revenue growth was 3.4 %. The figures presented below are comparable with the prior-year figures to a limited extent only since MediClin AG was included in consolidation for only four months of 2011. Asklepios Kliniken GmbH is composed of three subgroups: Asklepios Kliniken Verwaltungsgesellschaft mbH (AKV), Asklepios Kliniken Hamburg GmbH and MediClin AG. Together with MediClin AG, the Asklepios Group enjoys a nationwide presence. In 2012, almost 83 % (previous year: 89 %) of the business volume related to acute care hospitals and around 13 % (previous year: 8 %) to the rehabilitation sector, while the remaining revenue related to the other medical facilities. The Asklepios Group employed 34,037 fulltime equivalents (previous year: 33,152). Asklepios posted a 14.7 % rise in patient numbers which now total 1,999,018. The newly acquired clinics of MediClin AG were recognised for the whole year for the first time. Organic growth of 3.4 % was achieved thanks to new medical offerings, occupancy management and performance-based compensation agreements. The operating result on the basis of EBITDAR, which represents one of our key performance indicators due to the significance of the rental and financing structure in the business model of our sub-group MediClin AG, amounted to EUR 322.9 million in the fiscal year 2012 on the back of a margin of 10.8 % (previous year: EUR 241.8 million with a margin of 9.5 %); this represents a margin improvement of 14.6 %. EBITDA climbed from EUR 215.9 million in the previous year to EUR 267.2 million in the current year, due chiefly to the rise in patient numbers and the associated higher revenue. Despite being diluted due to rental expenditure at MediClin, the EBITDA margin increased to 9.0 % (previous year 8.4 %). Our negotiations on the hospital budgets for performance-based remuneration in particular had a positive impact here. In addition, the further reduction of the average length of stay also contributed to the increase in the operating result. In the past year, we also achieved initial success in integrating MediClin AG in the Asklepios Group. The initial creation of regional structures already generated value added.
35
36
Asklepios annual report 2012
We consider the rise in EBITDA to be very positive, particularly in light of the general market environment (wages increases, for instance due to the agreement with the Marburger Bund association for physicians, in the high single-digit millions) and a number of operational challenges and necessary restructuring (termination benefits and other non-recurring negative effects relating to collective wage agreements totalling EUR 18.5 million). EBIT amounted to EUR 163.8 million on the back of a margin of 5.5 % (previous year: EUR 134.2 million and 5.2 %). EBIT increased in absolute terms despite the rise in depreciation, amortisation and impairment resulting from the increase in write-downs on completed buildings. Consolidated net income totalled EUR 112.9 million after EUR 35.7 million in the previous year. Adjusted for the non-cash extraordinary item of EUR 51.3 million in the previous year due to the write-down on our Greek holding, the Athens Medical Center clinic group, consolidated net income for the previous year amounted to EUR 87.0 million. Consolidated net income was increased by 29.7 %, not including extraordinary effects. The return on sales in fiscal year 2012 amounted to 3.8 %. In light of the forecasts of a slowdown in the German economy, the situation on the healthcare market will remain difficult in the coming year. In the healthcare industry, earnings are being impacted by the negative effect of falling prices, which ultimately mean lower income per case, and the collective wage agreements that are not covered on the income side due to pressure on prices. In August 2012, the government responded to this divergence by resolving a staff cost aid package with a volume of EUR 300 million. Under the package, one-third of the increase in personnel expenses that is not covered by regular increases in payments (base rate) will be financed via a collective wage adjustment. This corresponds to an increase in the case-based lump sum of 0.5 % for 2012 as a whole. Accordingly, we expect the rise in personnel expenses in the current year to be offset to a certain extent, but not in full. According to the most recent figures from the German Federal Statistical Office, 18.3 million patients were treated in 2011, around 1.7 % more than in the previous year. The average length of stay decreased from 7.7 days in 2010 to 6.7 days. Despite the higher patient numbers, however, hospital operators are being forced to grant high discounts for additional services. On the other hand, social benefit institutions are reporting net income in the billions. As such, profitability is suffering due to the price pressure resulting from these discounts for additional services as well as high collective wage agreements. In this environment, Asklepios nonetheless succeeded in increasing its operating result on the basis of EBITDAR (earnings before interest, taxes, depreciation, amortisation and rent) by 33.5 % to EUR 322.9 million.
Group management report
At EUR 225.5 million, net cash from operating activities developed positively in the year under review and is consistent with a good industry average. As such, Asklepios continues to possess strong internal financing power. Accounting and financing structures remain sound, balanced and geared towards the long term. The Group‘s equity ratio stood at 32.2 % on 31 December 2012 and was thus up on the previous year‘s figure of 31.2 %. As of 31 December 2012, net debt amounted to EUR 625.4 million, of which EUR 118.4 million related to subordinated capital. Excluding subordinated capital, the debt ratio is therefore 1.9 times EBITDA (as of 31 December 2011: 1.5 times). This means that Asklepios still has extremely solid financial structures. Compared to German industry and the relevant competitors within the industry, this leverage can been considered moderate. Cash and cash equivalents, which totalled EUR 145.9 million as at the balance sheet date, and undrawn lines of credit of EUR 209 million enable the Group to invest in the quality of medical care and to continue to play an active role in consolidating the German hospital market in the future. On 27 June, Asklepios Kliniken notified the German Federal Financial Supervisory Authority and Rhön-Klinikum AG that it exceeded the thresholds of 3 % and 5 % of the voting rights in Rhön-Klinikum AG. Its share of the voting rights amounted to 5.01 % as of this date. As a family business, Asklepios is geared towards the long term and intends to keep all options open with this step in relation to Rhön Kliniken.
b. Group structure The Asklepios Group is one of the three largest private operators of hospital and healthcare facilities in Germany. The Group pursues a responsible, sustainable growth strategy that is geared towards high quality and innovative strength. Together with MediClin AG, the Asklepios Group enjoys a nationwide presence. The operating entities are mainly consolidated subsidiaries, with just a small number of operating companies being run on the basis of management agreements or via non-controlling interests. Asklepios Kliniken GmbH is composed of three subgroups: •• the wholly owned subsidiary Asklepios Kliniken Verwaltungsgesellschaft mbH •• the 74.9 % majority shareholding in Asklepios Kliniken Hamburg GmbH (the remaining 25.1 % is held by the city of Hamburg) •• the 52.73 % majority shareholding in MediClin Aktiengesellschaft.
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Asklepios annual report 2012
Numerous functional synergies are realised at operating level, for example in the areas of quality management, medicine and science, finance and financing, procurement and IT. Asklepios Kliniken GmbH (AKG) forms a consolidated tax group for VAT purposes with the majority of the group companies. Standard intercompany agreements on exchanging services and cooperation agreements have been concluded between the group entities. As the parent company of the Group, Asklepios Kliniken GmbH is responsible for the areas of strategy and financing, as well as for carrying out monitoring, management and controlling functions.
Asklepios Kliniken GmbH, Hamburg
21.98% MediClin AG, Offenburg
100% Asklepios Kliniken Verwaltungsgesellschaft mbH, Königstein im Taunus
74.9% Asklepios Kliniken Hamburg GmbH, Hamburg
30.75%
As of the end of 2012, Asklepios still operates a total of 108 clinics and 33 additional healthcare facilities such as nursing homes, medical centres for shared practices and other medical centres. Furthermore, Asklepios has management responsibilities for nine further facilities (previous year: 25). We have retained our investment in Athens Medical Center S.A., Athens, Greece, as a purely financial investment.
c. Corporate management The Group is managed and controlled by group management. The supervisory board and the shareholder meeting serve as further corporate bodies. The supervisory board appoints the members of the management. It also advises and monitors the management in their managerial activities. The bylaws and the Asklepios approval catalogue stipulate that the management must obtain the approval of the supervisory board and the shareholder meeting to carry out certain transactions.
Group management report
Asklepios‘ operations are organised on a decentralised basis, where responsibility for achieving goals is passed onto the regional entities, which also take care of patients in organisational terms. The decentralised organisational structure is accompanied by central functions, namely purchasing, IT, diagnosis-related groups (DRG) / care rate law, construction, finance, personnel, corporate communications and marketing. The most important indicators for managing economic success are EBITDAR, EBITDA, EBIT, cash flow and consolidated net income for the year. These are complemented by ratios such as the equity ratio, debt ratio (net debt / EBITDA), interest coverage (EBITDA / interest result) and key performance indicators (KPIs) on working capital. The KPIs are aggregated for reporting purposes at the level of the Group; they are also prepared for individual facilities and monitored by management. The internal audit as a management tool supports management in its control function by providing targeted, independent reviews. It also includes regular monitoring of the proper functioning of the internal control system and of risk management. Group management bears overall responsibility for the internal control and risk management system with regard to the financial reporting processes of the companies included and the group financial reporting process. All consolidated entities are included using defined management and reporting structures. With regard to the financial reporting processes of the companies included and the group financial reporting process, we consider those aspects of the internal control and risk management system that have a material influence on group accounting and the overall picture conveyed by the consolidated financial statements and group management report to be significant. These are the following aspects in particular: •• Identification of major areas of risk and aspects to be monitored that are relevant to the group financial reporting process •• Monitoring of the group financial reporting processes and examining the results at the level of management and group management and at the level of the entities included in the consolidated financial statements
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Asklepios annual report 2012
•• Control measures in the finance and accounting of the Group and the individual consolidated companies, as well as in operating business processes, which generate the key figures for the preparation of the consolidated financial statements and group management report, including separation of functions in predefined approval processes in the relevant areas •• Measures to ensure the proper computerised processing of content and data relating to group financial reporting Asklepios has further implemented a risk management system relating to the group financial reporting process that includes measures to identify and assess material risks as well as the corresponding risk-mitigating measures in order to safeguard compliance of the consolidated financial statements.
d. Employees An average of 34,037 employees (full-time equivalents) were employed in the fiscal year 2012, as compared to 33,152 full-time equivalents in the previous year. This corresponds to an increase of 2.7 %. The average number of employees (headcount) in the fiscal year 2012 was up 2.4 % at 45,390 (previous year: 44,307). Asklepios provides around 3,000 training posts in all medically relevant occupational profiles. A modern training system, which includes the largest healthcare training centre (BZG) in Northern Germany with more than 1,000 trainees, secures trainees, particularly in nursing and medical fields. As well as nursing training, young people are offered initial training in almost all healthcare occupations requiring training. An extensive range of advanced training is also offered to develop and establish new career paths, such as anaesthetic technicians and surgical operation assistants. The Asklepios clinics are therefore able to train new employees themselves to a large extent.
e. Quality management and innovation In order to promote transparency in hospital services, the government introduced structured quality reports with key figures for the operation of hospitals. The system should enable patients and physicians to select a hospital using objective criteria. In Germany, every hospital is required to publish the results of its medical treatment. Asklepios is committed to publishing this information in an easily understandable form for both referring doctors and interested patients. Patient orientation, patient safety and treatment quality are the pillars of Asklepios quality management.
Group management report
In the past fiscal year, the Asklepios clinics presented the results of their clinical treatment in a transparent manner and published them in the report on the quality of medical outcomes. Interested parties can also download the results from the internet. It is important to Asklepios to compare itself with other German clinics and ensure the necessary transparency for this. Together with its competitors Rhön-Klinikum AG and SANA AG, the Asklepios Group is therefore a shareholder of “4QD-Qualitätskliniken. de GmbH” and a co-initiator of the “Qualitätskliniken.de” clinic portal. The objectively assessable quality of individual facilities provides not only patients and their relatives but also referring doctors with the information to make an informed decision on which is the right clinic. The portal is open to all interested clinics, but is intended primarily as an information platform for patients. The assessment is based on independent and objective data collected by BQS (Bundesgeschäftsstelle Qualitätssicherung gGmbH), a nationwide quality monitoring organisation. In light of dwindling natural resources, ways of achieving greater sustainability and environmental awareness in the organisation of the health sector are in greater demand than ever before. The wellbeing and health of patients and staff alike are closely linked to ecological aspects. The Group is working on environmentally sound and efficiencyenhancing measures to introduce environmentally viable solutions in daily clinical practice, in clinic buildings and in healthcare facilities. Several innovative projects for the healthcare sector were processed in the Group in the fiscal year 2012, too. Numerous doctor-initiated research projects, ranging from basic research to patient-related studies, are being promoted, improving treatments in the interest of the patient. In the past fiscal year, research and development was appropriately prioritised at our hospitals. A growing portion of this research relates to examining the effectiveness of conventional treatment approaches compared to innovative ones. The Group is a German leader in the further development of treatments as part of the care of a large number of patients. Based on the statutory care duties, the physicians that are qualified to do so concentrate on the improvement and refinement of scientifically proven diagnosis and therapy concepts. The clinics in the Hamburg subgroup (AKHH) conduct some 400 studies and research projects each year. Around 70 % of these studies deal with new drugs. Medical products such as cardiological or orthopaedic implants are also tested for the medical industry. At the same time, Asklepios supports research of scientific interest to senior consultants, from diagnosis techniques using medical products or devices to health economics or empirical studies. Biologists and clinical researchers specialised in cardiology, haematology, diabetology, and oncology conduct basic research on new therapeutic methods in AKHH‘s research laboratories.
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Asklepios annual report 2012
II. General conditions a. General economic conditions Whereas the euro zone and the EU as a whole slid into recession in 2012, German gross domestic product increased again, albeit at a much slower pace. Issue 11 / 2012 from the European statistical office Eurostat and the joint diagnosis by the leading German economic research institutes from October 2012 both anticipate a 0.8 % increase in German gross domestic product in 2012 as a whole. The forecast increase for 2013 is also modest at 1.0 % (joint diagnosis). In January 2013, the German Federal Government again significantly reduced its growth forecast for 2013 from 1 % to 0.4 %. The slowdown of the German economy is due chiefly to the recessionary situation in Europe, particularly in the euro zone, and the decline in economic growth in emerging economies. According to the latest available figures from the German Federal Statistical Office (Statistical Yearbook 2012), total spending on healthcare in Germany amounted to EUR 287.3 billion in 2010, accounting for 11.5 % of GDP. At EUR 74.3 billion, a good quarter of this spending was attributable to hospitals. Another EUR 8.2 billion related to preventive care and rehabilitation clinics, and EUR 21.7 billion to inpatient and semi-inpatient care. A good 4.8 million employees work in the healthcare sector (Statistical Yearbook 2012), including 1.5 million part-time employees. This means that roughly one in nine employees in Germany work in healthcare. The financial position of the statutory health insurance companies, which represent by far the most significant payers in the healthcare sector, improved considerably again in 2012 (German Federal Ministry of Health, 5 December 2012). According to the German Federal Ministry of Health, statutory health insurance providers – i.e. health insurance companies and health funds – posted a surplus of EUR 4 billion in the first three quarters of 2012. The financial reserves of the statutory health insurance providers therefore totalled approximately EUR 23.5 billion as of the end of the third quarter of 2012.
b. General sector conditions According to the most recent figures from the German Federal Statistical Office in Wiesbaden dating from 2011, around 502,029 (2010: 502,749) beds in a total of 2,045 (2010: 2,064) hospitals in Germany were available for inpatient care for the population. While the number of hospitals fell by 0.9 %, available beds remained almost unchanged year-on-year (down 0.1 %). In relation to the population of Germany, there were 614 beds per 100,000 residents. Bed utilisation decreased by 0.1 percentage points as against the previous year to 77.3 %. According to DRG statistics from the German Federal Statistical Office dated 25 October 2012, the average length of a hospital stay in 2011 was just 6.7 days (2010: 7.7 days).
Group management report
The number of inpatients treated rose by around 310,000 or 1.7 % to a total of 18.3 million, while the number of billing and hospitalisation days for them fell by 266,000 to 141.7 billion in 2011. Interventionist healthcare policies have put hospitals under considerable pressure in recent years to make changes in the way that hospitals are run. This development is due to the remuneration system based on diagnosis-related groups (DRGs) introduced in 2004, according to which patients are allocated to certain groups depending on the diagnosis and the planned method of treatment. Each treatment group corresponds to a certain DRG value, which is fixed on the basis of the average costs of comparable hospitals. This is to allow patients‘ illnesses to be classified based on the costs incurred. Compensation for complicated methods of treatment is better than for standard operations. As a result of the introduction of this compensation system and the associated separation of treatments through to specialisation, outpatient operations have replaced inpatient services in some instances. Despite the ageing population, this development has led to a tail-off in the growth rate of cases in inpatient care and a sharp increase in cases in outpatient care. Hospitals in Germany remain under severe pressure to invest. They are entitled to public subsidies to cover their capital expenditures. Subsidies under the German Hospital Financing Act (Krankenhausfinanzierungsgesetz – KHG) fell significantly over the past few years, however, decreasing on a sustained basis from EUR 3.4 billion in 2000 to EUR 2.7 billion in 2011. The Asklepios Group consequently reported an increased selffinancing ratio (investments in property, plant and equipment and intangible assets not including subsidies / total investments) of 61.5 % in 2012 (previous year: 47.9 %). The relatively high self-financing ratio is due to the fact that efficiency gains for investments in the business model can be exploited and Asklepios can finance itself on the capital market. The financing situation at German hospitals remains under pressure. While revenue has stagnated, there has been a disproportionately high increase in the personnel costs governed by collective bargaining agreements and in operating expenses (e.g. energy). According the German Federal Statistical Office, personnel costs amounted to around 70 % of total costs on average for all hospitals in Germany. Additional investments to maintain the level of medical services are therefore made primarily using new financing models. These circumstances offer competitive advantages and further growth opportunities for privately financed clinic chains, and for Asklepios in particular as one of the largest chains, because they have access to the capital market, for example.
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c. Overall statement on general conditions In Germany, hospital financing is based on two pillars: whereas the health insurance companies finance ongoing operating costs in the context of hospital compensation, the hospitals are legally entitled to government subsidies for their capital expenditure under the German Hospital Financing Act (KHG), provided they are included in the hospital plan of the relevant federal state. According to a study by the German hospital institute, Deutsches Krankenhausinstitut e.V. (DKI), only just under half of hospitals’ investment funds in 2009 came from public subsidies received as individual and global subsidies. The availability of own funds in particular, but also access to loans, is therefore crucial to maintain a high level of medical technology and generally ensure the attractiveness of a hospital. Hospitals assess their economic situation as remaining critical. According to the “Krankenhaus Barometer 2012”, the annual survey by Deutsches Krankenhausinstitut e.V. (DKI), only 55.3 % of licensed general hospitals with 50 or more beds generated a net profit in 2011, as compared to 68.0 % in 2010. A net loss for the year was reported by 30.6 % of the hospitals, while the rest generated a roughly break-even result in 2011. Expectations for their economic development in 2013 are cautious on the whole. 39.6 % of the hospitals expect their profits to deteriorate significantly and 37.6 % anticipate a general stagnation. Only 22.2 % of the hospitals expect an improvement. The hospital market is highly regulated and characterised by strong regional influences, particularly in the field of acute care. Asklepios faces competition from other public, nonprofit and private hospitals with regard to its services, and it is not uncommon for these to also be cooperation partners for patient care at the same time. The complete or partial takeover of clinics as part of privatisation and the advancing consolidation of the market forms part of Asklepios’ business model. Regular competitors in the context of privatisation measures include private hospital groups – particularly RhönKlinikum AG, Helios Kliniken GmbH (a subsidiary of Fresenius SE), Sana Kliniken AG and the AMEOS Group – as well as smaller regional chains of clinics which also bid to take over municipal hospitals. In addition, further consolidation among privately managed hospitals could also be observed in 2012, for instance in the acquisition of the Damp Group by Helios Kliniken.
Group management report
III. Financial position and performance The consolidated business figures of MediClin for the whole year had an effect for the first time on the 2012 business figures presented in the following. In this respect, there is only limited comparability with business figures from the previous year. The fiscal year 2012 was characterised by the challenging market environment in the hospital and rehabilitation sector. Nevertheless, revenue increased as a result of the firsttime consolidations in the previous year. New medical services, occupancy management and performance-based compensation agreements also had a positive impact on revenue. Due to the high significance of the rental and financing structure in the business model of MediClin which we have acquired, it makes sense to present the operating result on the basis of EBITDAR (earnings before interest, taxes, depreciation, amortisation and rent).
a. Financial performance 2012
Revenue Other operating income Cost of materials Personnel expenses
2011
EUR million
%
EUR million
%
2,980.0
100.0
2,557.3
100.0
35.2
1.1
21.1
0.9
-659.6
-22.1
-582.1
-22.8
-1,815.1
-60.9
-1,534.5
-60.0
Other operating expenses (excluding rental expenditure)
-217.6
-7.3
-220.0
-8.6
EBITDAR
322.9
10.8
241.8
9.5
Rental expenditure
-55.7
-1.8
-25.9
-1.0
EBITDA
267.2
9.0
215.9
8.4
Depreciation, amortisation and impairment
-103.4
-3.5
-81.7
-3.2
EBIT
163.8
5.5
134.2
5.2
Investment result
1.9
0.1
-48.9
-1.9
Interest result
-30.1
-1.0
-29.4
-1.1
Income taxes
-22.6
-0.8
-20.2
-0.8
Consolidated net profit
112.9
3.8
35.7
1.4
The organic growth rate stood at 3.4 %. The Asklepios management was able to improve the Company‘s position as a high-performing healthcare provider through new medical services and optimised occupancy management.
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Asklepios annual report 2012
This was achieved particularly through our negotiations on the hospital budgets for performance-based remuneration. Asklepios succeeded in agreeing long-term budget improvements with regard to services and compensation. In the past year, we also achieved initial success in integrating MediClin AG in the Asklepios Group, with the initial creation of regional structures generating value added in the sense of an increase in revenue. In addition, Asklepios also participates in the general trend in healthcare driven by demographic change, multimorbidity and medical technological advances. The largest impact of both factors is the good development of case numbers and patient acceptance of the Asklepios facilities. Development of case numbers No. of inpatient cases No. of outpatient cases
2012
2011
Absolute change
Relative change
674,267
588,828
+ 85,439
+ 14.5 %
1,324,751
1,153,525 *
+ 171,226
+ 14.8 %
* prior-year figure restated to allow comparability
Despite the difficult market environment, patient numbers for our medical services, which are in line with demand, increased from 1,742,353 in the same period of the previous year to their current level of 1,999,018 (+14.7 %). Patient numbers increased in major urban areas in particular. The rise in patient numbers is reflected in revenue growth of 16.5 % to EUR 2,980 million. As well as the price increase for base rates at state level, this revenue growth reflects changes in the severity of cases, meaning that there has been a greater increase in revenue than in patient numbers in 2012 to date. Utilisation saw encouraging growth to 84.0 % (previous year: 82.6 %). 83.3 % (previous year: 89.2 %) of revenue was generated in acute-care hospitals, 13.2 % (previous year: 8.3 %) in rehabilitation clinics and 3.5 % (previous year: 2.5 %) in social and welfare facilities and in other facilities. Other operating income of EUR 35.2 million (previous year: EUR 21.1 million) resulted in particular from income arising from the adjustment of variable contractual obligations, income from granting rights of usage and customary income from operating activities. The item also includes income from clinical studies and research projects.
Group management report
The ratio of the cost of materials to revenue improved year-on-year to 22.1 % (previous year: 22.8 %). In absolute terms, the cost of materials increased by EUR 77.5 million year-on-year to EUR 659.6 million (+13.3 %). The measures implemented at the start of the year with a view to cutting operating expenses (mainly implants) are taking effect, with the regulated use of external personnel service providers and management measures in the field of highpriced implants having a particular impact in these areas. With personnel expenses of EUR 1,815.1 million (previous year: EUR 1,534.5 million), the ratio of personnel expenses to revenue increased from 60.0 % to 60.9 %. In absolute terms, personnel expenses rose by 18.3 %. Overall, the rise in personnel expenses is due to an increase in the average number of full-time equivalents (34,037, previous year: 33,152) and to wage increases. The wage increases, for example in the form of collective wage agreements with the Marburger Bund association for physicians, led to additional expenses in the high single-digit millions. In addition, there were a number of operational challenges and necessary restructuring in the fiscal year (termination benefits and other non-recurring negative effects relating to collective wage agreements totalling EUR 18.5 million), which had a non-recurring negative impact on the ratio of personnel expenses. Disregarding these non-recurring effects, the ratio of personnel expenses amounted to 60.2 % in the fiscal year and was thus at the previous year’s level. Asklepios reported a decline in other operating expenses (excluding rental expenditure) of EUR 2.4 million to EUR 217.6 million (previous year: EUR 220.0 million). Other operating expenses were thus reduced by 1.1 %. The ratio of other operating expenses to revenue also improved significantly to 7.3 % (previous year: 8.6 %). EBITDAR increased considerably year-on-year to EUR 322.9 million (previous year: EUR 241.8 million) on the back of a margin of 10.8 % (previous year: 9.5 %). Taking into account rental expenditure, which rose to EUR 55.7 million largely as a result of the consolidation of MediClin AG, EBITDA also increased substantially by EUR 51.3 million to EUR 267.2 million (previous year: EUR 215.9 million). Despite being diluted due to rental expenditure at MediClin, the EBITDA margin improved to 9.0 % (previous year: 8.4 %). As of 31 December 2012, the ratio of depreciation and amortisation to revenue amounted to 3.5 % (previous year: 3.2 %), and is therefore within the long-term forecast range. The absolute year-on-year increase is due in particular to the write-downs in connection with company acquisitions that are required to be recognised for the whole year in accordance with IFRS 3 and increased write-downs on completed buildings and medical equipment. EBIT amounted to EUR 163.8 million on the back of a margin of 5.5 % (previous year: EUR 134.2 million and 5.2 %). The rise in EBITDA meant that EBIT increased despite the higher level of depreciation, amortisation and impairment as described above.
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Asklepios annual report 2012
The investment result comprises dividend payments received. In addition, an extraordinary item resulting from a non-cash write-down on our Greek holding in the amount of EUR 51.3 million was reported in the investment result in the previous year. As such, a comparison with the prior-year period is not possible. The interest result changed by EUR 0.7 million or 2.4 %. Interest income declined by EUR 3.4 million, while interest expenses also fell by EUR 2.6 million. Finance with higher interest rates, such as subordinated capital, was reduced by means of active treasury management, targeted liquidity management and optimised interest management. Income taxes rose from EUR 20.2 million in the same period of the previous year to EUR 22.6 million. The tax rate for the period under review was 16.7 % (previous year, not including extraordinary effects: 18.9 %). All in all, consolidated net profit improved significantly year-on-year as a result of the above effects, increasing from EUR 35.7 million to EUR 112.9 million in the period under review. Adjusted for the extraordinary item of EUR -51.3 million, consolidated net income for the corresponding period of the previous year amounted to EUR 87.0 million, meaning that adjusted consolidated net profit for the period under review increased by 29.7 % to EUR 112.9 million.
b. Net assets 2012 Summarised statement of financial position Non-current assets Current assets Available-for-sale assets
2011
EUR million
%
EUR million
%
1,966.2
74.4
1,776.8
72.3
675.3
25.6
682.2
27.7
0.0
0.0
0.2
0.0
2,641.5
100.0
2,459.2
100.0
Equity
851.5
32.2
767.0
31.2
Participation capital / subordinated capital
118.4
4.5
181.6
7.4
1,106.6
41.9
887.7
36.1
565.0
21.4
622.9
25.3
2,641.5
100.0
2,459.2
100.0
ASSETS
Non-current liabilities and provisions Current liabilities and provisions EQUITY AND LIABILITIES
Group management report
Our balance sheet and financing structures are sound. In the same way as at 31 December 2011, non-current assets are financed at a rate of over 100 % with matching maturities via equity or long-term borrowings. Total assets increased from EUR 2,459.2 million in the previous year to EUR 2,641.5 million. The rise in non-current assets is due chiefly to an increase in the financial assets item, which includes the equity investment in Rhön-Klinikum AG. Equity rose by EUR 84.5 million to EUR 851.5 million in the period under review. The equity ratio increased slightly to 32.2 % of total assets (31 December 2011: 31.2 %). Asklepios has permanent interest-free and redemption-free access to subsidies of approximately EUR 1,290.1 million (31 December 2011: EUR 1,301.6 million). As these subsidies will fall due for repayment only in the hypothetical event of no longer being included in the hospital plan, these funds are in effect similar to equity. Days sales outstanding (receivables turnover rate – trade receivables / revenue x 360) improved as a result of active control by the management. Participation certificates totalling EUR 43.2 million were repaid in the fiscal year. Other subordinated capital and high-interest loans at the level of MediClin AG were repaid in the amount of EUR 80 million as scheduled. By means of optimised financial management in the form of repayment of finance with higher interest rates, such as subordinated capital, Asklepios generated savings of approximately EUR 5 million ceteris paribus. Non-current liabilities amount to EUR 1,106.6 million (previous year: EUR 887.7 million). These comprise pension provisions, other non-current provisions, financial liabilities and liabilities due in more than one year and deferred taxes. The increase in liabilities results chiefly from the utilisation of a syndicated loan. Non-current financial liabilities include a fixed-rate capital market bond with a volume of EUR 150 million. This bond will mature on 28 September 2017 and has a coupon of 4.0 %. The interest is paid in arrears on an annual basis as at 28 September each year. The non-current capital, comprising equity, participation capital and subordinated financing, non-current liabilities and provisions covers the noncurrent assets by over 100 % as in the previous year. Besides cash and cash equivalents of EUR 145.9 million, the Group also has unutilised lines of credit totalling EUR 209 million. EUR 94.4 million of this (previous year: EUR 96.0 million) is collateralised with land charges. The Group therefore has financial reserves of EUR 354.9 million available at short notice.
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Asklepios annual report 2012
Internal financing power is still at a very good level. The successive optimisation of cash management is also leading to the repayment of financial liabilities and favourable refinancing of financial liabilities, allowing for further optimisation of interest expenses. The strong net cash from operating activities, particularly from a long-term perspective, is attributable to the rise in EBITDA from EUR 215.9 million in the previous year to EUR 267.2 million. Capital expenditure was financed primarily from the net cash from operating activities and the utilisation of available credit facilities. The following table shows the areas in which cash and cash equivalents have changed over the course of the year: EUR million
2012
2011
EBITDA
267.2
215.9
Cash flow from operating activities
225.5
202.6
Cash flow from investing activities
-309.2
-119.7
Cash flow from financing activities
47.1
-162.9
Change in cash and cash equivalents
-36.6
-80.0
Cash and cash equivalents on 1 January
182.6
262.6
Cash and cash equivalents on 31 December
145.9
182.6
Cash and cash equivalents fell by EUR 36.6 million to EUR 145.9 million in 2012. Net cash from operating activities amounted to EUR 225.5 million. Net cash from operating activities increased year-on-year due to the higher EBITDA in 2012. Cash flow from operating activities is offset by cash flow from investing activities including acquisitions of EUR -309.2 million (previous year: EUR -119.7 million). Net cash used in investing activities in the amount of EUR 309.2 million related primarily to acquisitions and capital expenditure. By contrast, net cash from financing activities amounted to EUR 47.1 million, largely as a result of loans extended to the Group.
c. Capital expenditure Regular capital expenditure is vital in order to increase optimum patient care and maintain the physical fabric of the hospital. The further increase in the Company’s earnings power in the fiscal year 2012 enables Asklepios to finance itself internally. Access to the financial markets is also possible. Alongside subsidies, Asklepios intends to use own funds averaging between 7 % and 9 % of revenue for maintenance and capital expenditure in order not only to maintain its competitive
Group management report
position, but also to continue expanding it. In line with the trend of recent years, we continue to anticipate a rise in the self-financing ratio, as subsidies are declining due to the strained budgetary situation of the federal states and municipal authorities. As a growth-oriented group, Asklepios is dependent on capital expenditure and is able to compensate for the loss of subsidies, including in light of its internal financing power. Capital expenditure in fiscal year 2012 was as follows: Capital expenditure 2012 Total in EUR million
Thereof subsidised in EUR million
Self-financing ratio
Intangible assets
11.1
3.0
73.0 %
Land and buildings
31.3
9.3
70.3 %
Technical equipment
10.9
2.3
78.9 %
82.1
31.8
61.3 %
Assets under construction
Operating and office equipment
109.6
47.9
56.3 %
Total
245.0
94.3
61.5 %
The majority of capital expenditure in the fiscal year related to the following locations: Location
Capex in EUR million
Mainly includes
Schwedt
7.1
New ward construction
AK St. Georg
6.1
Ward
AK Harburg
5.8
Construction of power facilities
Harzkliniken
4.0
Ward
AK St. Georg
3.9
Radiotherapy
AK West
3.2
New construction
Bad König
3.2
New construction
AK St. Georg
2.8
Outpatient clinic
AK Harburg
2.7
New construction
Westerland
2.7
Seehaus clinic
Wiesbaden
2.7
Extension of operating theatres / radiology
ZIT, Hamburg
2.5
Land with buildings
Schwalm-Eder
2.4
Construction of new wing
Teupitz
2.4
Building 3: general psychiatry
AK Altona
2.3
Stroke unit and IMC
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After deducting subsidised capital expenditure, net capital expenditure totalled EUR 150.7 million (previous year: EUR 111.0 million), or 5.1 % of revenue (previous year: 4.3 %). This represents an increase of EUR 39.7 million on the prior year and is fully financed by cash flow from operating activities. Without deducting subsidies, capital expenditure amounted to EUR 245 million (previous year: EUR 231.6 million), or 8.2 % of revenue (previous year: 9.1 %). Compared to the prior year, maintenance and servicing expenses rose from EUR 84.0 million to EUR 85.6 million. Expressed as a percentage of revenue, 2.9 % (previous year: 3.3 %) was invested in ongoing maintenance. This means that Asklepios used 8.0 % (previous year: 7.6 %) of revenue for internally funded capital expenditures and maintenance work.
d. Financial position One of the central elements of the Company‘s financing strategy consists of maintaining and further developing an investment grade standard in order to optimise our capital costs in the long run. The Group has a solid and long-term financing structure. Besides the cash and cash equivalents of EUR 145.9 million, the Group has unutilised lines of credit of more than EUR 209 million at its disposal. In light of this situation and the relatively moderate level of net debt, the Group is well protected from further financial market risks. It is in a position to leverage further growth potential through acquisitions as well as being able to meet all of its repayment obligations in the coming years from financial reserves. An optimised cash management system (cash pooling, long-term projects to reduce capital being tied up in current assets) meant that financial liabilities were paid back. The funds bearing low interest were reduced, saving on the respective credit margins. Financial liabilities including subordinated capital total EUR 771.3 million (31 December 2011: EUR 681.6 million). Participation certificates totalling EUR 43.2 million were repaid in the fiscal year 2012. In addition, subordinated capital in the amount of EUR 20 million was also repaid. Non-current financial liabilities include a fixed-rate capital market bond with a volume of EUR 150 million and a coupon of 4.0 %. The interest is paid in arrears on an annual basis as at 28 September each year. Through the conclusion of interest rate hedges, the Group is hedged against rising interest rates and therefore for the most part is not exposed to any interest rate risk. The debt ratio – measured as net debt / EBITDA – increased. According to internal guidelines, this ratio must not exceed 3.5 x to 4.0 x. The following table illustrates how this performance indicator was calculated in the period under review:
Group management report
EUR million
2012
2011
Financial liabilities (excluding subordinated capital)
652.9
499.9
Cash and cash equivalents
145.9
182.6
Excluding subordinated capital
Net liabilities (excluding subordinated capital)
507.0
317.4
EBITDA
267.2
215.9
1.9 x
1.5 x
Net debt / EBITDA
The performance indicator was therefore within the specified range in the fiscal year at 1.9 x (previous year: 1.5 x). Even taking into account subordinated capital, the indicator amounted to 2.3 x (previous year: 2.3 x). EUR million
2012
2011
Including subordinated capital Financial liabilities (including subordinated capital)
771.3
681.6
Cash and cash equivalents
145.9
182.6
Net liabilities (including subordinated capital)
625.4
499.0
EBITDA
267.2
215.9
Net debt / EBITDA
2.3 x
2.3 x
Compared with German industry as a whole and the relevant competitors within the industry, this leverage can be considered positive. The interest coverage factor (EBITDA / interest result) stands at 8.9 x (previous year: 7.4 x). As a conservative company in terms of finance, our financing strategy is generally long term in nature and contains only a small amount of short-term refinancing risks. Accordingly, some of the underlying credit volumes are hedged against interest fluctuation risks in the long term. The operating management of cash and cash equivalents and the financing of Group entities are performed centrally on the basis of careful investment and with a view to creditworthiness, involving broad diversification across banks within the three major deposit protection systems in Germany.
53
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Asklepios annual report 2012
In addition, a limiting system keeps individual external counterparty risks to a minimum. An efficient cash pooling system that manages short-term liquidity of all entities is the cornerstone of financing within the Group. On the other hand, the Group‘s medium and longterm financing is obtained centrally from banks and the capital market. The funds are then allocated to the respective group entities as needed.
e. Overall statement on financial position and performance Despite the nationwide trend towards an increase in collective wage agreements and ongoing high pressure on prices owing to discounts for additional hospital services, revenue increased by 16.5 % to EUR 2,980 million with organic revenue growth of 3.4 %. Due to the high significance of the rental and financing structure in the business model of MediClin which we have acquired, it makes sense to present the operating result on the basis of EBITDAR (earnings before interest, taxes, depreciation, amortisation and rent). EBITDAR increased slightly from EUR 241.8 million in the previous year to EUR 322.9 million in 2012, while the margin improved from 9.5 % in the previous year to 10.8 % in fiscal year 2012. The balance sheet and financing structures remain sound and balanced. In the same way as at 31 December 2011, non-current assets are financed at a rate of over 100 % with matching maturities via equity or long-term borrowings. The Group has a solid and long-term financing structure. Besides the cash and cash equivalents of EUR 145.9 million, the Group has unutilised lines of credit of more than EUR 209 million at its disposal.
C. Subsequent events According to a press release dated 14 March 2013, the German Federal Antitrust Office (Bundeskartellamt) has approved Asklepios Kliniken Verwaltungsgesellschaft mbH’s plan to invest in up to 10.1 % of the shares in Rhön-Klinikum AG, subject to a suspensive condition. This plan would have resulted in reinforcement of a dominant market position in the Goslar region. For this reason, Asklepios would firstly have to sell the clinic and the medical care centre that it operates there to an independent hospital operator. On 5 March 2013, the WestLB profit participation certificates were terminated as of the end of the next three-month period defined in the agreement. The termination is subject to the suspensive condition that the counterparty accepts the termination. Until then, it is unclear when a repayment will be made.
Group management report
D. Risk and opportunity management Due to the growth dynamics and complexity of the business fields in which it operates, Asklepios is exposed to a number of challenges and risks. A systematic and comprehensive approach to identifying risks and opportunities alike puts the Company in a position to secure long-term economic success, thus also generally offering secure jobs to employees. The reconciliation and evaluation of opportunities and risks is an integral part of entrepreneurial duties. Rapid changes in healthcare policy as well as structural, social and economic conditions need to be recorded and managed. Managing the associated risks and opportunities is an ongoing challenge and major component of corporate governance. Our risk and opportunity management system is closely linked to corporate strategy. The combination of our internal control system, risk controlling and the associated early warning system allows us to recognise developments which could jeopardise the continuing existence of the Group or its entities at an early stage and to take appropriate countermeasures. At the same time, this situation gives rise to opportunities to develop the Company, because risk and opportunities often directly correlate. The risk management process is broken down into the stages of risk identification and assessment, risk reporting, risk management and risk controlling. The various stages form a feedback loop: Risk identification: The risk officers in the regions / clinics and the central group departments identify individual risks and document them in a standardised way on a regular basis. Risk reports essentially consist of a detailed description of the risk, a depiction and explanation of the risk assessment and selected control measures. If major risks arise that could jeopardise the continued existence of one of our companies, group management must be informed directly and without delay. The system of regular reporting (e.g. liquidity, financial reporting, reports on the quality of medical care) supplements and offers a plausibility check for the identification of opportunities and risks. Risk assessment: Risks are assessed with regard to the probability of their occurrence and their impact (potential influence on achieving the budgeted EBITDA and on liquidity, e.g. with regard to financing and subsidy issues). The managers with operational responsibility are required to report any relevant changes in the risk profile on a regular basis. On the basis of risk assessment, the central risk management function aggregates the effects of the individual risks in categories that are as homogenous as possible.
55
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Asklepios annual report 2012
Risk reporting: Risk reporting consists of this risk report, which forms part the management report for the consolidated financial statements, as well as the methods of risk reporting listed above under ‘risk identification’ and a summary of the reporting. Risk management: The information gathered can be used as a basis to develop a risk management strategy in order to control potential risks in a targeted and suitable way. This means that countermeasures can be implemented in good time if apparently negative developments are detected. Risk controlling: Risks are reviewed with regard to their occurrence and risk management measures with regard to their impact. The corresponding findings are reported to group management on an annual basis in order to ensure the transparency of the Company‘s risk position. The risk manual describes the risk areas relevant to Asklepios, transportation, communication and escalation mechanisms as well as the cooperation with the different departments and persons responsible in the various facilities. It also provides clear regulations for the reporting cycles as well as criteria for identifying risk areas and individual risks. Risks are recorded on a decentralised basis using a software solution. This allows risks and opportunities to be recorded and measured as and where they occur. All material entities / clinics and group departments are linked to the system. The risk management system is reviewed and adapted regularly to address market changes in good time. Besides the risk management system, there is also a monitoring system made up of organisational security measures and internal controls and reviews.
Current risk assessment Risk areas are grouped within a transparent risk matrix according to the assessed probability of occurrence and potential financial impact. Areas assessed as low risk are initially monitored at local level in accordance with our decentralised approach. Once areas are assessed as medium risk or above, the risks and measures as well as implementation of the same are monitored centrally by the group department responsible. Any areas assessed as high risk are additionally monitored by the group management between the reports submitted on a quarterly basis. Regardless of the assessment of how relevant risks are from the perspective of the Group, the respective risk officers remain responsible for dealing with the individual risks pertaining to specific departments.
Group management report
There were no serious risks and risks that jeopardise the existence of the Company as a going concern or risks classified as high in the reporting period. A detailed explanation of all risk areas that are classified as at least “medium” within the risk matrix is provided below: Political risks: There is a long history of healthcare being a special focus of policy makers. This means that it is heavily dependent on decisions of the existing and future healthcare legislation. At present, there are plans in particular to launch a lump-sum compensation system for psychiatric facilities starting from 2013. The changes in legislation may cause the financial position, financial performance and cash flows to deteriorate. As a private hospital company, however, Asklepios is focusing at the same time on the opportunities that may arise from these changes. Due to its favourable cost structures and the above average competence in the area of DRG revenue management, Asklepios considers itself in a good position to transform the change process into additional competitive advantages. Additional opportunities arise from the growing interconnection of outpatient and inpatient services, which we actively promote with flexible cooperation offers. This intensive, crosssector cooperation minimises risks for us. Liability and legal risks: Risks arising in connection with legal disputes are identified, evaluated and communicated within the Company on an ongoing basis. In addition, the Group is involved in various legal disputes which result from business operations. Even if it is not possible to forecast the outcome of these disputes, Asklepios is not expecting any significant negative effects on the financial position, financial performance and cash flows from the proceedings currently pending. In the area of liability cases, it is impossible to rule out a negative impact on the financial position, financial performance and cash flows despite all existing precautions. Asklepios uses liability insurance policies, mostly with deductibles, to cover potential risks. Suitable provisions are created and adjusted as necessary for the deductibles. In the area of liability insurance, we are seeing substantial increases in premiums. By extending the established deductible model, Asklepios has an opportunity – compared to its competitors in the hospital market – to obtain greater independence from the insurance market and partly disengage itself from the trend towards rising premiums.
57
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Asklepios annual report 2012
Investment risks: Asklepios understands investment risks to be the issue arising when failure to make investments or unprofitable investments result in an obsolete infrastructure and impedes the ability to tap into new market potential. This could lead to revenue targets not being met (including due to the expiry of authorisations for use) or market shares being lost to competitors in the respective regions and sectors and a risk of fines in the event of nonfulfilled obligations under purchase agreements. Asklepios currently deems the probability of this risk occurring to be high, primarily on account of the development of subsidy financing. Here we anticipate constantly decreasing subsidy ratios, with corresponding consequences for investing activities. However, the Company expects this risk to have only a minor financial impact at first. Asklepios is not dependent on the development of subsidies to the same extent as the majority of the competition thanks to its relatively high internal financing power. Risks from acquisition and integration: Risks may arise from the integration of acquired clinics and facilities. Our task is to integrate the infrastructure of the acquired company. We also bring processes and logistical workflows in line with our standards. In addition, any legal and contractual issues that may arise in connection with the acquisition must be resolved. The loss of key management staff during the integration could have a critical impact. We aim to minimise the risks relating to the acquisition by making use of the transaction expertise that the Group has gathered over many years and the associated people and methods. As only relatively small acquisitions in comparison to the size of the company took place in 2012 and in the previous years, the risk is currently of minor significance. Financing and liquidity risks: The Group is generally exposed to risks from the capital market. The management of short-term liquidity and longer-term financing risks is one of the central duties of the Group financing and investor relations department, which employs a treasury system in this context, focusing on efficient management of current cash and cash equivalents. As a conservative company in terms of finance and in light of the investment terms of the assets, the financing strategy of Asklepios is generally long term in nature and contains hardly any short-term refinancing risks. The high levels of cash and cash equivalents, the constant cash flow, the favourable capital structure (low level of debt), broad diversification of financing partners as well as the extensive undrawn lines of credit are a sign that we are largely independent of general developments on the capital markets. In addition, most of the financial liabilities are hedged by interest rate hedges (cash flow hedges). Accordingly, Asklepios continues to consider the probability of occurrence of financing and liquidity risks that could also lead to rising interest expenses as medium.
Group management report
Other financial risks: Credit and counterparty risks result if a customer or another counterparty to a financial instrument fails to meet its contractual obligations in terms of due dates and del credere. Asklepios is exposed to only a low level of risk from an unexpected loss of cash or income. Asklepios enjoys a low level of risk of default on account of a large portion of debtors consisting of German statutory health insurance funds, complemented by a smaller portion of public social security authorities and private patients. In contrast to this, the risk of late payment in the case of trade receivables, and thus the risk of an increase in capital being tied up in current assets, can be considered medium in light of the growing impact of the economic crisis on social security contributions. The investment policy on the assets side is similarly conservative and involves broad diversification. The investment counterparties are banks belonging to deposit protection systems. Investments are also monitored continuously via investment controlling. The Company reacts with measures to correct any differences compared to its expected targets. In addition, we have concluded hedges against changes in fair value fluctuations (fair value hedges). Medical, nursing and quality risks arise from competition regarding quality and efficiency. As a result of the government’s aim of a denser healthcare network and increasing competition on quality, clinics without the level of quality to compete with other facilities in the vicinity are coming under pressure. There are also potential risks in the natural fluctuation in occupancy rate. The availability of specialist staff and the manageability of the treatment including the necessary technical equipment is an ongoing organisational challenge. The risks named may cause the financial position, financial performance and cash flows to deteriorate. Asklepios counters this efficiency competition with target planning for the individual clinics in order to provide proof that the medical services on offer are in line with demand. The developments on the market are seen as an opportunity to capture a greater share of the market. Competition on quality is countered by the high quality of treatment. This is the basis for gaining patients‘ trust in the work of our clinics, while at the same ensuring that operating and litigation risks are minimised. Income, documentation and budget risks: The high level of state regulation means that Asklepios is exposed to risks in the day-to-day documentation and billing of cases as well as in the medium-term developments in income budgets. This currently applies not only to the fact that the health insurance funds are slower to pay but primarily to details of budgetary law, such as differing opinions on case specifications and remuneration; pending
59
60
Asklepios annual report 2012
arbitration proceedings, where in some cases the outcome is impossible to predict; delayed budget negotiations; and potential changes to budgetary law and the supplementary billing regulations. The risks named may cause the financial position, financial performance and cash flows to deteriorate. On the other hand, the size of the Group, the knowledge it has acquired over the years and its available data sets mean that Asklepios has the opportunity to define standards and implement them via the market and to provide extremely effective support to the clinics locally with regard to the above issues. In the area of handling sensitive services, which also generally represent public authority tasks, there is also an inherent risk that the private sector may be pushed back. We currently consider this inherent risk to be low. A decline in processed contracts would entail a loss of revenue, whereas the effect on EBITDA depends on the product area concerned. The forecast demographic development in some areas will lead, ceteris paribus, to decreasing case numbers and revenue. However, in light of the measures initiated in some cases with regard to remuneration for medical services, it is not possible to make a definitive estimate of revenue and EBITDA. Personnel risks: There are always risks in the area of personnel and these may cause a deterioration in the financial position, financial performance and cash flows. The most significant individual risks include the lack of qualified staff, the migration of key personnel and the development of personnel costs. Asklepios proactively counters the risk of not having sufficient qualified personnel both centrally and locally by means of extensive recruiting campaigns and personnel development programmes. The structured development of new attractive professions in the field of nursing and special approaches to recruiting and retaining physicians puts the Company in a position to hire a sufficient number of trainees and staff to offset employee turnover. Furthermore, the general shortage of specialist clinic staff can be addressed by means of targeted recruiting measures. On the cost side, there is a significant risk inherent in how collectively bargained clinic staff wages develop. To reduce external dependency and to actively shape developments, the Group has significantly reduced the risks by using more flexible company agreements adopted to fit local circumstances and other alternative compensation models. These models are reviewed by the relevant group departments before the agreements are concluded. In light of the increasing stringent labour law and social security law framework (e.g. German
Group management report
Employee Assignment Act, German Labour Leasing Act), it cannot be ruled out that certain models may in future prove to require adjustments or to be incorrect despite having been reviewed by the relevant group departments. We have taken account of risks requiring recognition that we are aware of by setting aside provisions. As a result of the acquisitions, Asklepios is a member of a number of pension scheme structures of the former providers (ZVK, VBL). In view of the financing situation of these structures, which are generally financed on a pay-as-you-go basis, there is a risk of increasing contributions along with decreasing benefits for the individual employees, partly due to the restructuring contributions levied. At one clinic, participation in VBL was terminated in the fiscal year. According to the current but, in our opinion, unlawful bylaws, this would require a “current payment”. No ruling has yet been issued on this matter. Asklepios expects that no current payment will be required, including due to the unlawful bylaws of VBL. The payment would not have any impact on the Group’s financial performance. Construction risks, operating costs for buildings and technical risks (including IT): On account of the extensive construction work, the Group is exposed to risks from business interruptions and delays in construction work with the associated revenue losses and cost overruns in the budgeted construction work. The effects of these risks inherent in all major construction projects can be considered small on account of the measures we have taken. These measures include the provision of a high level of expertise within the Group with regard to construction planning and implementation, working if at all possible with standardised instructions and equipment, as well as own staff to monitor the construction work making it possible to react quickly to any problems that may arise. The development of internal standards together with many years of experience in this area provides the opportunity for high-quality construction at acceptable prices. This generates a major long-term competitive advantage, owing to the scarce resource that money represents. As a hospital group, Asklepios is dependent on a functioning IT structure. The successful course of treatment of a patient (from admission through diagnosis and treatment to documentation) depends to a large extent on an integrated IT system. Disruptions in IT integration or in related processes (e.g. authorisation concepts) may have a significant impact on the net assets, financial position and results of operations. At the same time, we see an opportunity here to enhance efficiency by means of intelligent use of IT possibilities. Risks to reputation may arise from uncontrolled negative media reporting, for example in the case of medical damages cases or unpopular company decisions or actions. These are latent risks inherent in the healthcare sector. Alongside preventive measures relating to potential
61
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Asklepios annual report 2012
causes for negative reporting, for instance the quality management measures detailed above, this risk is mitigated through proactive publicity work and marketing measures, group-wide guidelines on channels of communication as well as the corresponding links to relevant media representatives and associations. Risks to reputation may cause the financial position, financial performance and cash flows to deteriorate. Professional publicity work as carried out by Asklepios also provides the opportunity to increase the level of positive response.
Summary and outlook Risk management brings together all risks reported by the management of individual clinics and regions and the central group departments. With regard to the risks detailed in this report – taking into account the probability of their occurrence and the potential financial effects and the current prospects for business – the group management does not anticipate any individual or aggregate risks that could materially jeopardise the Group‘s ability to continue as a going concern. Management is confident that the Group‘s earnings power forms a firm foundation for the future business development and provides the necessary resources to exploit the opportunities available to the Group.
E. Forecast According to the RWI‘s Hospital Rating Report for 2012, hospital care has reached a watershed. Firstly, suitable instruments need to be found to curb the growth in volumes and hence reduce the burden on the healthcare system. Secondly, the ability of hospitals to invest needs to increase. The conversion of investment subsidies at federal state level into lump-sum grants has been under discussion for some time. And thirdly, the initial signs of accelerated market consolidation are now emerging, with national hospital groups continuing to reinforce their position and working in close cooperation with strong municipal and university partners. The report states that the proportion of hospitals at increased risk of insolvency is forecast to rise to 15 %. Costs are expected to continue to increase at a faster rate than income in the long term, meaning that the situation is likely to remain strained. Smaller hospitals in particular are set to suffer more than large or medium-sized facilities. Clinics with a
Group management report
high degree of specialisation are generally significantly better off than those without. For the first time, the report also investigated the connection between management structures and hospital ratings, coming to the conclusion that better management structures result in improved economic performance. According to the latest press reports, the federal states are cutting their expenditure on hospitals. Payments at state level fell by more than 20 % between 2001 and 2011. In addition, the revenue situation of hospitals was improved only slightly by the German Statutory Health Insurance Financing Act for 2011 and 2012, which was passed at the end of 2010, while there has been a larger increase in wages and salaries and the cost of materials. The only way to offset higher costs will be to increase the number of patients and improve productivity. In January 2013, the German Federal Government once again significantly reduced its growth forecast for 2013 from 1.0 % to 0.4 % in light of the crisis in the euro zone and an anticipated decline in foreign trade. The International Monetary Fund also expects the recovery from the global economic and financial crisis to be longer and harder than expected. Hospitals are also under enormous financial pressure which has not abated in spite of the injection of EUR 300 million granted by the German Federal Government to refinance the increased personnel costs. We expect the economic situation of hospitals to deteriorate further. The German Federal Ministry of Health has announced that the average adjustment rate for the assessable income of all members of health insurance funds will be +2.03 % from 2013. Starting from 2013, however, an adjustment value – replacing the adjustment rate in the area of the German Hospital Remuneration Act (KHEntgG) and the German Federal Regulation on Hospital Charges (BPflV) – will be agreed between the contractual parties at federal level for the first time. This will introduce the “orientation value”, which is intended to represent hospital-specific costs and will be calculated by the German Federal Statistical Office. Up to a third of the adjustment value, which represents the difference between the adjustment rate used to date and the orientation value, is to be offset in somatic treatment – but only if this is necessary in order to guarantee medical care. The orientation value has now been set at 2.0 % for 2013 and is still to be priced into the base rates at state level. It remains to be seen whether the possible increase in base rates at state level will extend to hospitals. In psychiatry, 40 % of the difference (without further investigation) will be financed. This arrangement underlines the fact that payment for hospital services is being disconnected from actual cost increases.
63
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In the medium term, it remains to be seen whether this will lead to a convergence of base rates, which currently still vary among the federal states. Furthermore, we expect additional states to announce plans to convert their investment subsidies into investment grants. Asklepios will continue to face increasing competition for specialist staff in the near future. In this respect, the consistent implementation of the measures that have been initiated will be particularly important. In addition to the key issue of attracting staff, the focus will increasingly be on retaining existing employees by making further improvements to working conditions. To this end, Asklepios will utilise and emphasise the benefits that only a large group can offer its employees. In light of the tightening of the market for hospital professional liability risks, the insurance structure in the healthcare liability sector is currently being adjusted. Across the industry, insurance premiums for healthcare liability insurance have increased dramatically on the back of a contracting market, meaning that it would be possible to conclude new policies only at significantly higher premiums. Accordingly, Asklepios has decided to expand the Asklepios Kliniken Hamburg GmbH deductible model that has been established since 1995 to the Group holdings of Asklepios Kliniken Verwaltungsgesellschaft mbH. Under this model, a (Group) healthcare liability insurance policy is concluded with an insurance company for all Asklepios clinic companies, but this policy comes into effect only to the extent that the total of all reimbursable healthcare damages exceeds a deductible that is selected at a high level. Furthermore, each clinic company is responsible for the healthcare damages that arise at its facilities. This ensures greater independence from the insurance market and means that Asklepios is not affected by the trend towards rising premiums, which generally increase significantly every year. In response to these economic challenges, we are intensifying Group-wide efforts to systematically leverage cost and efficiency potential at our clinics. Restructuring programmes are ongoing at the most recently acquired hospitals in our portfolio to provide complementary approaches to increasing operating margins. Within specialist medical areas, we offer services with a focus on orthopaedics, cardiology, neurology, psychiatry, geriatrics and pulmonology, as well as general acute care. In our opinion, diseases of modern life and new medical procedures are associated with growing demand and further growth prospects in these disciplines in particular. We have already entered into the current debate regarding the legal regulation of caseloadbased bonus payments with senior consultants. Under these regulations, hospitals must in future state whether they comply with the recommendations of the Hospital Association (DKG) on performance-related target agreements in their contracts with senior consultants. If this is not the case, they must provide information in the quality report on the types of performance for which performance-related target agreements are concluded. The aim of these regulations is to influence the quality of care in the facilities while also ensuring that
Group management report
medical decisions are made independently. The statements in the hospitals’ quality reports are intended to give patients and other interested parties the possibility to find out whether and for what types of performance the hospital has concluded target agreements that are not covered by the DKG’s recommendations. The regulations are to be drawn up by the DKG together with the German Medical Association ( BÄK) by the end of April 2013. Asklepios has reacted to the expected change at an early stage and has already included qualitative targets in the target agreements. In terms of acquisitions, we will continue to acquire medical facilities in the future only if they are absolutely right for us. From a commercial perspective, most of the available properties have problems, but it is precisely here that we can demonstrate our turnaround expertise. With these measures, we are laying the foundations for the continuous improvement in our cash flow and margins, as the process will take some years. In mid-2012 we took the step of acquiring 5.01 % of the voting rights in Rhön-Klinikum AG, allowing us to keep all options open. As a family business, we are geared towards the long term. On the basis of this analysis and the opportunities that it reveals, we consider our prospects with regard to the financial position and financial performance to be positive in light of these assumptions on the general economic and industry-specific environment. For 2013, we anticipate organic revenue growth of between 2 % and 4 % and an increase in the operating result. We expect revenue and earnings to develop similarly in 2014. Some of the statements made in the management report contain forward-looking statements. These are based on management‘s expectations and assessments of potential future events affecting the Group. Such statements relating to the future are based on assumptions that may lead to actual events deviating from the assumptions made. The forecast takes into account all events known at the time when the statement of financial position was prepared. Significant risks that may stand in the way of the forecast being met are listed in the risk report. Hamburg, 26 March 2013 Dr. Ulrich Wandschneider
Dipl.-Kfm. Stephan Leonhard
Dr. Roland Dankwardt
Kai Hankeln
65
Asklepios annual report 2012
Consolidated financial statement Consolidated statement of financial position
68
Consolidated income statement
70
Consolidated statement of comprehensive income
71
Consolidated cash flow statement
72
Statement of changes in group equity
73
68
Asklepios annual report 2012
IFRS Consolidated statement of financial position for the fiscal year ended 31 December 2012* Note no.
31.12.2012
31.12.2011
Goodwill and other intangible assets
VI.2
390,429
383,210
Property, plant and equipment
VI.3
1,282,875
1,243,891
Investments accounted for using the equity method
VI.4
1,922
1,922
Other financial assets
VI.5
241,121
98,575
in € k ASSETS Non-current assets
Trade receivables
VI.7
870
420
Non-current income tax assets
VI.8
2,202
2,629
Other assets
VI.9
84
49
VI.22
46,679
46,101
1,966,182
1,776,797
Deferred taxes Total non-current assets Current assets Inventories
VI.6
87,372
81,810
Trade receivables
VI.7
363,168
343,216
Current income tax assets
VI.8
1,583
4,269
Other financial assets
VI.5
72,154
65,918
Other assets
VI.9
5,067
4,403
VI.10
145,945
182,560
675,289
682,176
0
236
2,641,471
2,459,209
Cash and cash equivalents Total current assets Available-for-sale assets Total assets * Adjusted prior-year figures
VI.11
Consolidated financial statement
Note no.
31.12.2012
31.12.2011
Issued capital
VI.12ba
1,022
1,022
Reserves
VI.12bb
553,893
556,745
VI.12a
90,394
16,297
VI.12bc
206,218
192,917
VI.12
851,527
766,981
in € k EQUITY AND LIABILITIES Equity attributable to the parent company
Group net profit Non-controlling interests Total equity Non-current liabilities Trade payables
VI.15
224
218
Participation capital/subordinated capita
VI.13
55,100
118,425
Financial liabilities
VI.14
616,986
403,300
Finance lease liabilities
VI.18
9,621
9,921
Pensions and similar obligations
VI.19
80,438
55,131
Other provisions
VI.20
236,515
241,072
Deferred taxes
VI.22
28,858
34,119
Other financial liabilities
VI.16
119,790
130,634
Other liabilities
VI.17
14,148
13,349
1,161,680
1,006,169
Total non-current liabilities Current liabilities Trade payables
VI.15
74,809
74,122
Participation capital/subordinated capital
VI.13
63,295
63,200
Financial liabilities
VI.14
35,949
96,647
Finance lease liabilities
VI.18
126
140
Pensions and similar obligations
VI.19
1,643
1,386
Other provisions
VI.20
135,220
137,746
Current income tax liabilities
VI.21
9,236
9,984
Other financial liabilities
VI.16
114,906
124,095
Other liabilities
VI.17
193,080
178,739
628,264
686,059
2,641,471
2,459,209
Total current liabilities Total equity and liabilities
69
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Asklepios annual report 2012
IFRS Consolidated income statement for the fiscal year from 1 January to 31 December 2012* Note no.
2012
2011
Revenue
VII.1
2,980,038
2,557,332
Other operating income
VII.2
35,163
21,138
3,015,201
2,578,470
in € k
Cost of materials
VII.3
659,629
582,082
Personnel expenses
VII.4
1,815,067
1,534,544
VII.5
273,338
245,898
267,167
215,946
103,398
81,772
163,769
134,174
Other operating expenses Operating result/EBITDA
1)
Depreciation, amortisation and impairment - of intangible assets and depreciation and impairment of property, plant and equipment Operating result/EBITDA
VII.6
2)
Earnings from investments Impairment of investments accounted for using the equity method
1,858
2,369
0
-51,252
1,858
-48,883
Investment result
VII.7
Interest and similar income
VII.8
3,918
7,307
Interest and similar expenses
VII.8
-34,036
-36,685
Interest result
VII.8
-30,118
-29,378
Financial result
-28,260
-78,261
Earnings before income taxes
135,509
55,913
-22,587
-20,180
Income taxes Consolidated net profit
VII.10
112,922
35,733
of which attributable to the parent company
90,394
16,297
of which attributable to non-controlling interests
22,528
19,436
1)
Earnings before financial result, taxes and depreciation and amortisation
2)
Earnings before financial result and taxes
* Adjusted prior-year figures
Consolidated financial statement
IFRS Consolidated statement of comprehensive income for the fiscal year ended 31 December 2012* in € k Consolidated net profit Changes in the fair value of cash flow hedges Measurement of financial assets Income taxes
2012
2011
112,922
35,733
-871
-789
-1,138
0
318
125
-1,691
-664
-31,448
-7,551
4,977
1,195
Total changes in value not reclassified to profit or loss
-26,471
-6,356
Total changes in value recognised in equity (other comprehensive income)
-28,162
-7,020
Total comprehensive income (total consolidated net profit and other comprehensive income)
Total changes in value reclassified to profit or loss if certain conditions are met Change in actuarial gains (+) / losses (-) from defined benefit pension commitments and similar obligations Income taxes
84,760
28,713
of which attributable to the parent company
70,768
10,847
of which attributable to non-controlling interests
13,992
17,866
* Adjusted prior-year figures
71
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Asklepios annual report 2012
IFRS Consolidated cash flow statement for the fiscal year ended 31 December 2012* in € k
Note no.
Consolidated net profit
2012
2011
112,922
35,733
Income taxes
VII.9
22,587
20,180
Interest result
VII.8
30,118
29,378
Investment result
VII.7
-1,858
48,883
Amortisation and impairment of intangible assets and depreciation and impairment of property, plant and equipment
VII.6
103,398
81,772
267,167
215,946
-1,450
1,440
VI.6,7,8,9
-21,339
-2,663
VI.12,15,16, 17,18,19,21
-1,255
849
Gross cash flow (EBITDA) Other non-cash transactions Changes in inventories, receivables and other assets Changes in liabilities and provisions Dividend received
VII.7
1,858
824
Interest income
VII.8
2,548
4,239
Income taxes paid
VII.9
-22,076
-18,042
225,453
202,593
VI.2,3,18
-150,695
-111,056
VI.2,3
4,761
965
VI.1,4,5
-163,264
-9,655
-309,198
-119,746
Cash flow from operating activities/Net cash flow Investments in property, plant and equipment and intangible assets Proceeds from the disposal of non-current assets Acquisitions of subsidiaries, equity investments and financial assets Cash flow used in investing activities Borrowing (+)/repayment (-) of financial liabilities **
VI.14
145,859
-48,813
Borrowing (+)/repayment (-) of participation capital/subordinated capital
VI.13
-63,200
-66,700
Cash flow from dual hospital financing
VI.3
-4,258
-10,269
Interest expenses
VII.8
-29,467
-33,595
Distributions
-1,804
-3,478
Cash flow from financing activities
47,130
-162,855
-36,615
-80,008
182,560
262,568
145,945
182,560
Change in cash and cash equivalents Cash and cash equivalents as of 1 January Cash and cash equivalents as of 31 December * Adjusted prior-year figures ** Including share of financing from unfavourable contracts
VI.10
Consolidated financial statement
73
IFRS Statement of changes in group equity for the fiscal year ended 31 December 2012 Noncontrolling interests
Equity attributable to the parent company
in € k As of 1.1.2011 (as reported) Change in accounting and measurement methods As of 1.1.2011 (adjusted) Annual result
Equity
Issued capital
Revenue reserves
Reserve for market valuation
Group net-profit
Total
1,022
485,293
0
72,893
559,208
93,288
652,496
0
4,009
0
0
4,009
367
4,376
1,022
489,302
0
72,893
563,217
93,655
656,872
0
0
0
16,297
16,297
19,436
35,733
Other comprehensive income
0
-4,786
-664
0
-5,450
-1,570
-7,020
Total comprehensive income
0
-4,786
-664
16,297
10,847
17,866
28,713
Changes in the consolidated group
0
0
0
0
0
84,874
84,874
Distributions
0
0
0
0
0
-3,363
-3,363
Compensation payment obligations
0
0
0
0
0
-115
-115
Allocations to reserves
0
72,893
0
-72,893
0
0
0
Total transactions recognised directly in equity
0
72,893
0
-72,893
0
81,396
81,396
As of 31.12.2011 (adjusted)
1,022
557,409
-664
16,297
574,064
192,917
766,981
As of 1.01.2012 (as reported)
1,022
555,383
-664
15,663
571,404
192,640
764,044
0
2,026
0
634
2,660
277
2,937
1,022
557,409
-664
16,297
574,064
192,917
766,981
Change in accounting and measurement methods As of 1.01.2012 (adjusted) Annual result
0
0
0
90,394
90,394
22,528
112,922
Other comprehensive income
0
-17,936
-1,691
0
-19,627
-8,536
-28,163
Total comprehensive income
0
-17,936
-1,691
90,394
70,767
13,992
84,759
Changes in the consolidated group
0
0
0
0
0
291
291
Distributions
0
0
0
0
0
-133
-133
Change in equity interests in consolidated companies
0
478
0
0
478
822
1,300
Distribution to RKG
0
0
0
0
0
-1,671
-1,671
Allocations to reserves
0
16,297
0
-16,297
0
Total transactions recognised directly in equity
0
16,775
0
-16,297
478
-691
-213
1,022
556,248
-2,355
90,394
645,309
206,218
851,527
As of 31.12.2012
0
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Asklepios annual report 2012
notes to the Consolidated Financial Statements for the financial year 2012 in accordance with International Financial Reporting Standards I. Basis of the consolidated financial statements
76
1) G roup structure: principles and business segments
76
107
e) Financial liabilities
109
f) Relationship between classes, categories
Accounting principles
76
a) Rules applied
76
b) New standards and standards that have to be adopted for the first time
d) Derivative financial instruments
77
and recognition of financial instruments
11) Income taxes
110
111
a) Current tax assets and liabilities
111
b) Deferred taxes
111
c) Presentation and reclassifications
87
12) Inventories
112
d) Financial year
88
13) T rade receivables
112
88
14) Revenue recognition
112
15) O ther receivables and other assets
113
2) Approval of the financial statements II. Operating segment reporting
89
16) C ash and cash equivalents
113
III. Currency translation
90
17) Other provisions
113
IV. Consolidation, accounting and measurement methods
18) Pension provisions
114
90
19) Estimates and assumptions
115
1) Basis of consolidation
90
V. F inancial risk management
119
1) F inancial risk management objectives and policies
119
2) Liquidity and financing risk
119
3) Credit, counterparty and payment risk (default risk)
121
4) Market risk
122
5) P resentation of the interest risks to which Asklepios is exposed
122
6) Cash flow interest rate risk
122
7) Capital management
123
VI. Notes on items of the consolidated statement of financial position
125
1) B usiness combinations using the purchase method
125
2) G oodwill and other intangible assets
129
3) Property, plant and equipment
132
a) Subsidiaries
90
b) Associates
91
c) Other equity investments
92
d) Transactions with non-controlling interests
93
Basis of consolidation
93
2) Intangible assets
100
3) Goodwill
101
4) Property, plant and equipment
102
5) Government grants
103
6) Leases
103
7) Research and development costs
104
8) Borrowing costs
104
9) Impairment of non-financial assets
104
10) Financial instruments
105
a) F inancial assets at fair value through profit or loss
106
b) Loans and receivables
106
c) Available-for-sale financial assets
106
Notes
4) Investments accounted for using the equity method
7) Investment result
163
134
8) Interest result
163
5) Other financial assets
136
9) Income taxes
165
6) Inventories
137
7) T rade receivables
138
8) Income tax assets (non-current and current)
139
VIII. Notes to the statement of cash flows
166
9) Other assets
139
10) C ash and short-term deposits
139
IX. Other notes
166
11) Available-for-sale assets
140
1) A nnual average number of FTEs
166
12) Equity
140
2) C ontingent liabilities and other financial obligations
167
3) Management remuneration
168
4) G roup auditor fees (Section 314 (1) No. 9 HGB
168
5) R elated party disclosures
168
6) Litigation
170
7) Subsequent events
170
8) C orporate boards of Asklepios Kliniken Gesellschaft mit beschränkter Haftung
171
a) Components of equity
140
13) P articipation capital and other subordinated capital
141
14) Financial liabilities
142
15) Trade payables
143
16) O ther financial liabilities
144
17) Other liabilities
146
18) Finance lease liabilities
146
19) Provisions for pensions and similar obligations
148
20) Other provisions
155
21) C urrent income tax liabilities
156
22) Deferred tax assets and liabilities
157
23) A dd itional information on financial instruments158
VII. Notes to the income statement
159
1) Revenue
159
2) Other operating income
160
3) Cost of materials
161
4) Personnel expenses
161
5) Other operating expenses
162
6) D epreciation, amortisation and impairment162
75
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Asklepios annual report 2012
notes to the Consolidated Financial Statements for the financial year 2012 in accordance with International Financial Reporting Standards I. Basis of the consolidated financial statements 1) Group structure: principles and business segments The Company is named Asklepios Kliniken Gesellschaft mit beschränkter Haftung, Rübenkamp 226, 22307 Hamburg, Germany (hereinafter also referred to as “AKG”, the “Clinic”, the “Group” or the “Company”), and is entered in the commercial register at the Hamburg district court, HRB 98981. The Company was formed on 19 June 1985. Asklepios Kliniken Gesellschaft mit beschränkter Haftung and its subsidiaries operate primarily on the German market in the clinical acute care and rehabilitation as well as – to a very limited extent – nursing business segments. The purpose of the Company is the acquisition and operation of and the provision of consulting services for healthcare institutions. We operate facilities in numerous federal states in Germany. Our Group structure is geared towards regional differences in terms of personnel and company law. The operating entities are mainly equity investments in the three sub-group financial statements of Asklepios Kliniken Verwaltungsgesellschaft mbH, Königstein (100 % equity investment), Asklepios Kliniken Hamburg GmbH, Hamburg (74.9 % equity investment), and MediClin AG, Offenburg (52.73 % equity investment), included in the consolidated financial statements. We also have selected foreign operations; this relates almost exclusively to our investment in Greece (Athens Medical Center S.A.).
Accounting principles a) Rules applied The consolidated financial statements of AKG and its subsidiaries as of 31 December 2012 were prepared applying Section 315a (1) HGB (“Handelsgesetzbuch”: German Commercial Code) in accordance with the International Financial Reporting Standards (IFRS) and the corresponding interpretations of the IASB (IFRIC), as adopted by the European Union in accordance with Regulation No. 1606 / 2002 of the European Parliament and of the Council. All those standards and interpretations subject to mandatory adoption for financial year 2012 were observed. The consolidated financial statements are prepared on the basis of historical cost, restricted by the remeasurement of financial assets available for sale as well as by the measurement at fair value through profit or loss of financial assets and financial liabilities (derivative financial instruments).
Notes
The Group is therefore exempt from the obligation to prepare consolidated financial statements in accordance with HGB. AKG’s IFRS consolidated financial statements and Group management report are published in the electronic Federal Gazette (elektronischer Bundesanzeiger). As far as the individual consolidation, accounting and measurement methods used are concerned, we refer to the following comments in IV.
b) N ew standards and standards that have to be adopted for the first time: Accounting standards adopted for the first time Die Rechnungslegungsstandards wurden durch den IASB überarbeitet und veröffentlicht. Sie ersetzen vollständig oder partiell frühere Versionen dieser Standards / Interpretationen oder stellen neue Standards / Interpretationen dar. Der Konzern hat folgende IFRS erstmalig vollständig oder die entsprechenden geänderten Regelungen in Übereinstimmung mit den entsprechenden Übergangsvorschriften angewendet und - soweit erforderlich - die Vergleichsangaben in Übereinstimmung mit den neuen Rechnungslegungsstandards angepasst:
Amendment to IFRS 7
Disclosures – Transfers of Financial Assets
Amendments to IAS 1
Presentation of Financial Statements – Presentation of Items of Other Comprehensive Income
IAS 19 (revised)
Employee Benefits
Amendment to IFRS 7 – Disclosures - Transfers of Financial Assets In October 2010, the IASB issued amendments to IFRS 7 – Financial Instruments – Disclosures. They relate mainly to additional disclosure requirements for the derecognition of financial assets. With these amendments, the IASB aims to give financial statement users a better insight into the transactions for the purpose of transferring financial assets (such as factoring). When certain opportunities and risks of transactions of this kind remain with the transferring company, the new disclosure requirements should contribute to improving transparency. The amendments are effective for the financial year beginning on or after 1 July 2011. The new provisions had no effect on the Group‘s financial position and performance. The International Financial Reporting Interpretations Committee (IFRIC) published no new interpretations becoming effective as of the financial year 2012. In June 2012, the European Union published Regulation (EC) No 475 / 2012 of 5 June 2012 to amend Regulation (EC) No 1126 / 2008 regarding the adoption of certain international accounting standards in accordance with Regulation (EC) No 1606 / 2002 of the European
77
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Parliament and of the Council. This Regulation adopted IAS 1 (rev. 2011) Presentation of Financial Statements - Presentation of Items of Other Comprehensive Income and IAS 19 (rev. 2011) Employee Benefits. AKG is adopting both standards early, applying them to the financial statements of 31 December 2012 with retroactive effect from 1 January 2011. Amendments to IAS 1 – Presentation of Financial Statements - Presentation of Items of Other Comprehensive Income On 16 June 2011, the IASB issued amendments to IAS 1. According to these amendments, companies must divide items recognised in other comprehensive income into two categories, depending on whether they will in future be recognised in profit or loss (called ‘recycling’) or not. Items that are not recycled, such as revaluation gains from property, plant and equipment, are to be recognised separately from items that will be recycled in future, such as deferred gains and losses from cash-flow hedging. If the items of other comprehensive income are recognised before tax, companies must report the accompanying tax amount separately according to the two categories. The term used in IAS 1 for the statement of comprehensive income has been changed to “income statement and other comprehensive income”. However, according to IAS 1, other terms are permissible. The amendment must be applied retrospectively for the first time for reporting years beginning on or after 1 July 2012. Earlier adoption is permitted. Accompanying income taxes are now disclosed in other comprehensive income, separated according to circumstance. IAS 19 (revised) – Employee Benefits On 16 June 2011, the IASB issued the final version of the amendments to IAS 19 (rev. 2011). These amendments introduce new requirements for the recognition of employee benefits. The amendments are effective in the financial year beginning on or after 1 January 2013. Early adoption is permitted. The most significant amendment to IAS 19 (rev. 2011) stipulates that actuarial gains and losses must in future be recognised directly in other comprehensive income (OCI). The previous right to choose between immediate recognition in profit or loss, in OCI, or delayed recognition in accordance with the corridor method has been abolished. A second amendment to pensions accounting according to IAS 19 (rev. 2011) stipulates that management should in future no longer estimate the return on plan assets based on the returns expected, and instead a yield based on the expected return on the plan assets may be recognised only in the amount of the discount rate of the pension obligation.
Notes
The treatment of termination benefits has also been amended in IAS 19 (rev. 2011). This applies in particular to the time when a company recognises a liability for termination benefits. Previously, amounts set aside in connection with partial retirement were classified as termination benefits and provisions were accordingly recognised for the full amount on the date of the agreement of a partial-retirement contract. Due to the change of the definition of termination benefits, amounts set aside no longer meet the criteria to be considered termination benefits when applying IAS 19 (rev. 2011). Instead, it relates to other long-term employee benefits that are accumulated on a pro-rata basis over the relevant service period of the employees. The amended IAS 19 (rev. 2011) also requires more extensive disclosures. In future, companies must for the first time make disclosures on the financing strategy for their pension plans and not only describe the financing risks of their plans, but also quantify them; future requirements for this purpose include the presentation of a sensitivity analysis showing the extent to which pension obligations fluctuate in the event of changes to key measurement assumptions. The average remaining term of pension obligations must also be disclosed in future. AKG is adopting the amended standard prematurely in the financial statements of 31 December 2012 for better insight into the net assets, financial position and results of operations. In the previous year, a change to the accounting method had already been made on the basis of the previously valid IAS 19, namely the conversion from the corridor method to the OCI method. The corresponding figures for 2011 must be adjusted to this new method in accordance with IAS 8.19B in conjunction with IAS 8.22. As of 31 December 2011 the retroactive application resulted in a € 2,948k decline of provisions for partial retirement (1 January 2011: € 5,171k), a € 64k decline of pension provisions (1 January 2011: € 0k), a € 478k increase in other financial assets (1 January 2011: € 29k), a € 2,026k increase in revenue reserves (1 January 2011: € 4,009k) and a € 277k increase in non-controlling interests (1 January 2011: € 367k increase). The interest result for the financial year 2011 improved by € 3,192k. Staff costs rose by € 1,775k. After taking into account the change in net deferred taxes of € 554k (1 January 2011: € 823k), which was recognised in profit or loss at € -224k in 2011, consolidated net income for the financial year 2011 was € 35,733k (up by € 1,193k). The adoption of IAS 19 (rev. 2011) increases consolidated net income for 2012 by € 1,079k. Staff obligations decrease by € 988k as of 31 December 2012, deferred taxes by € 52k and equity increases by € 1,079k.
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In the financial year, the accounting guideline regarding the discount rate for calculating pension obligations was also clarified. On the basis of a bond universe that contains all bonds with an AA rating from at least one agency, an interest rate is derived that is appropriate for the term. Under the former method, a discount rate of 3.8 % was used. Accounting standards to be adopted from financial year 2013 or later that the Group has not applied prematurely. The list below shows the IFRS-IAS standards and interpretations that will be effective in subsequent years: Standard / Interpretation
Published in
Effective date
Amendments to IFRS 1 - Severe Hyperinflation and Removal of Fixed Dates
December 2010
1 January 2013 *
Amendments to IAS 12 - Deferred Tax Recovery of Underlying Assets
December 2010
1 January 2013 *
IFRS 10 - Consolidated Financial Statements
May 2011
1 January 2014 **
IFRS 11 - Joint Arrangements
May 2011
1 January 2014 **
IFRS 12 - Disclosure of Interests in Other Entities
May 2011
1 January 2014 **
IFRS 13 - Fair Value Measurement
May 2011
1 January 2013
New version of IAS 27 - Separate Financial Statements
May 2011
1 January 2014 **
New version of IAS 28 - Investments in Associates and Joint Ventures
May 2011
1 January 2014 **
October 2011
1 January 2013
December 2011
1 January 2013
Endorsed:
IFRIC 20 - Stripping Costs in the Production Phase of a Surface Mine Amendments to IFRS 7 - Disclosures Offsetting Financial Assets and Financial Liabilities
Notes
Not yet endorsed: IFRS 9 Financial Instruments - Classification and Measurement and amendments to IFRS 9 and IFRS 7 - Mandatory Effective Date and Transition Disclosures
November 2009 / October 2010 /
1 January 2015
Amendments to IFRS 1 - First-time Adoption of International Financial Standards Government Loans
December 2011
1 January 2013
March 2012
1 January 2013
Amendments to IFRS 10 - Consolidated Financial Statements, IFRS 11 - Joint Arrangements, IFRS 12 - Disclosure of Interests in Other Entities - Transitional Provisions
May 2012
1 January 2013 **
Amendments to IFRS 10 - Consolidated Financial Statements, IFRS 12 - Disclosure of Interests in Other Entities, IAS 27 Separate Financial Statements - Investment Entities
June 2012
1 January 2014
Amendments to IAS 32 - Offsetting Financial Assets and Financial Liabilities
October 2012
1 January 2014
December 2011
1 January 2013
Improvements to the International Financial Reporting Standards (May 2012)
Amendments to IFRS 7 - Disclosures Offsetting Financial Assets and Financial Liabilities
* Postponement of effective date for EU companies to 1 January 2013 ** Postponement of effective date for EU companies to 1 January 2014
The IASB and the IFRIC have published the standards listed in the above table under “Endorsed”, which have already been adopted by the EU in the comitology procedures, but whose adoption was not mandatory for the financial year 2012. The Group is adopting the amendments to IAS 1 (rev. 2011) and the amendments to IAS 19 (rev. 2011) early with retroactive effect. Amendments to IFRS 1 – Severe Hyperinflation and Removal of Fixed Dates On 20 December 2010, the IASB published two minor amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards (IFRSs). The first amendment replaced references to the fixed transition date (“1 January 2004”) with “date of transition to IFRSs”. The second amendment provided guidance on how to approach the presentation of financial statements in accordance with IFRSs if a company was unable to comply with the IFRSs for some time because its functional currency was subject to severe hyperinflation. The amendments are effective for the financial year beginning on or after 1 July 2011. The
81
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Asklepios annual report 2012
effective date of the original standard was postponed for EU companies to financial years beginning on or after 1 January 2013. The new provisions will not have any effect on the Group‘s financial position and performance. Amendments to IAS 12 – Deferred Tax - Recovery of Underlying Assets The amendment introduces a mandatory exception provision, according to which, in certain cases, deviation can be made from the basic principle of IAS 12.51, according to which deferred taxes must be measured according to the expected tax consequence of the expected manner of recovery of the underlying asset (or liability). This amendment is important mainly for countries in which the use and sale of assets are taxed differently. Specifically, deferred tax assets and liabilities for investment properties measured at fair value, intangible assets and property, plant and equipment (adoption of the fair value model of IAS 40 or the revaluation model of IAS 16 or IAS 38) and such assets recognised in connection with an acquisition – provided these are to be recognised at fair value in the subsequent measurement – are to be measured on the basis of the tax consequences of a sale, unless the entity can clearly prove that it will fully recover the carrying amount of the asset through use. As a result of this amendment, SIC 21 Income Taxes - Recovery of Revalued NonDepreciable Assets no longer applies to real property measured at fair value and held as financial investments. The other guidelines have been integrated into IAS 12 and SIC 21 has been withdrawn accordingly. The amendment to IAS 12 was issued in December 2010 and becomes effective for financial years beginning on or after 1 January 2012. The effective date of the original standard was postponed for EU companies to financial years beginning on or after 1 January 2013. This amendment will not have any effect on the Group’s financial position and performance. IFRS 10 – Consolidated Financial Statements, IFRS 11 - Joint Arrangements, IFRS 12 - Disclosure of Interests in Other Entities; new version of IAS 27 - Separate Financial Statements, new version of IAS 28 - Investments in Associates and Joint Ventures In May 2011, the IASB published three new IFRSs on consolidation, joint arrangements and disclosures. IFRS 10 - Consolidated Financial Statements, IFRS 11 - Joint Arrangements and IFRS 12 - Disclosure of Interests in Other Entities form part of an extensive project of reform. IAS 27 (2011) - Separate Financial Statements has also been amended, which now contains only the unamended requirements for IFRS separate financial statements. Finally, IAS 28 (2011) - Investments in Associates and Joint Ventures has been amended and the new standards IFRS 10, 11 and 12 have been adjusted accordingly. The new standards are mandatory for the financial year beginning on or after 1 January 2013. The effective date of the original standard was postponed for EU companies to financial years beginning on or after 1 January 2014. Earlier adoption is permitted.
Notes
On 28 June 2012, the IASB published amendments to the transitional provisions of IFRS 10 - Consolidated Financial Statements, IFRS 11 - Joint Arrangements and IFRS 12 - Disclosure of Interests in Other Entities. The amendments clarify that the “date of initial application” of IFRS 10 is the beginning of the reporting period in which the standard is applied for the first time. Consequently, decisions on whether investments are to be consolidated according to IFRS 10 or not must be made at the beginning of this period. In addition, the amendments determine that, on initial application of the new consolidation rules, comparative information for the mandatory disclosure requirements of IFRS 12 in connection with subsidiaries, associates and joint arrangements must be disclosed for the immediately preceding period only. Disclosures relating to unconsolidated structured entities are fully exempted from the requirement to present comparative figures. The amendments are first effective in reporting periods beginning on or after 1 January 2013. Here too, the effective date was postponed for EU companies to financial years beginning on or after 1 January 2014. In the event of earlier, voluntary application of IFRS 10, 11 and 12, the amendments must likewise be applied earlier. On 31 October 2012, the IASB published amendments to IFRS 10 - Consolidated Financial Statements, IFRS 12 - Disclosure of Interests in Other Entities, and IAS 27 - Separate Financial Statements, by which investment entities (the term is newly defined in IFRS 10), i.e. funds or similar entities that meet the definition of an investment entity, are exempted from the obligation to include the subsidiaries they control in their consolidated financial statements by way of full consolidation if the investment entity is the ultimate holding company. Instead, investments in subsidiaries must be measured at fair value through profit or loss. In addition, new disclosure requirements for investment entities were added to IFRS 12. The new regulations are mandatory in financial years beginning on or after 1 January 2014. Earlier voluntary adoption is permitted. AKG is currently examining the precise impact of this with regard to accounting and measurement. However, the new requirements are not expected to have any significant impact on the Group‘s financial position and performance as no additions to the consolidated group are to be expected. More detailed disclosures in the notes to the consolidated financial statements are anticipated.
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IFRS 10 – Consolidated Financial Statements IFRS 10 provides a uniform definition for the term control and therefore a uniform basis for the existence of a parent-subsidiary relationship and the delimitation of the consolidated group associated with this. The new standard replaces the standard relevant up to now: IAS 27 (2008) - Consolidated and Separate Financial Statements and SIC 12 Consolidation - Special Purpose Entities. According to IFRS 10, a (subsidiary) company is controlled by an investor participating in its variable returns if it has the legal right to influence the business activities of the (subsidiary) company that are of significance to its economic success. Although IAS 27 (2008) also contains similar definitions that can be used to examine control, a stronger causal connection has now been made between the individual criteria and a far-reaching economic approach emphasised for the interpretation of individual matters. The application examples given in IFRS 10 also substantiate a range of issues that IAS 27 (2008) had not addressed to date, e.g. rights of participation and property rights of third parties and principal-agent relationships. Based on the new regulations, changes to the consolidated group must generally be presented retrospectively. IFRS 10 also regulates fundamental consolidation issues, e.g. the use of uniform accounting methods, the treatment of non-controlling interests and deconsolidation. No major changes have been made to the previous regulations in IAS 27. IFRS 11 – Joint Arrangements IFRS 11 governs the recognition of situations where a company exercises joint control over a joint venture or carries out a jointly controlled operation. The new standard replaces IAS 31 - Interests in Joint Ventures and SIC 13 Jointly Controlled Entities - Non-Monetary Contributions by Venturers which up to now were the relevant regulations for issues concerning the recognition of joint ventures. The most significant amendment in IFRS 11 compared to IAS 31 is the abolition of proportionate consolidation for joint ventures: in future, joint ventures are always to be accounted for using the equity method. If a jointly controlled operation exists instead of a joint venture, the assets, liabilities, income and expenses that are directly attributable to the participating company are to be recognised directly in the consolidated financial statements of the participating company. These types of jointly controlled operations can under certain circumstances – and this is another significant reform compared to IAS 31 – also arise when the jointly controlled operations are carried out within a separate vehicle.
Notes
IFRS 12 – Disclosure of Interests in Other Entities IFRS 12 stipulates the disclosure requirements for companies that comply with the two new standards IFRS 10 Consolidated Financial Statements and IFRS 11 Joint Arrangements. The standard replaces the disclosure requirements currently included in IAS 28 Investments in Associates and Joint Ventures. The requirements must be applied from 1 January 2013. The first-time application will not have any effect on the net assets, financial position and results of operations. However, increased disclosure requirements are expected for associates. IFRS 13 – Fair Value Measurement The IASB published the joint standard IFRS 13 - Fair Value Measurement in May 2011. This standard deals with fair value calculation and associated explanatory notes. IFRS 13 includes regulations for calculating fair value if this is prescribed as a measure by other IFRSs; IFRS 13 therefore does not involve an extension to fair value measurement. The aim is standardisation of the term “fair value” across the standards and of the methods to be applied when calculating fair value, as well as in particular standardisation of the explanatory notes associated with fair value calculation. The new standard is mandatory in the financial year beginning on or after 1 January 2013. Earlier adoption is permitted. AKG is currently examining the precise impact of this with regard to accounting and measurement. The new provision is not expected to have any significant effects on the Group‘s financial position and performance. IFRIC 20 – Stripping Costs in the Production Phase of a Surface Mine IFRIC 20 considers when and how to recognise the benefit arising from stripping activity, as well as how to measure these benefits both initially and subsequently. IFRIC 20 deals only with waste removal costs that are incurred in surface mining activity during the production phase of the mine (‘production stripping costs’). Any ‘predecessor stripping asset’ is required to be reclassified as a part of the existing asset to which the stripping activity is related (to the extent there remains an identifiable component of the ore body to which it can be associated), or otherwise recognised in opening retained earnings at the beginning of the earliest period presented. The new provision will not have any effect on the Group‘s financial position and performance. Amendments to IAS 32 – Financial Instruments – Presentation – Offsetting Financial Assets and Financial Liabilities The IASB has revised the requirements on the offsetting of financial assets and financial liabilities and published the results on 16 December 2011 in the form of amendments to IAS 32 - Financial Instruments - Presentation and IFRS 7 - Financial Instruments Disclosures.
85
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The offsetting requirements set out in IAS 32 have been retained in principle and have been made merely more specific by means of additional guidance. Here, the standards body emphasises expressly that an unconditional, legally enforceable right of set-off must also exist in the event of the insolvency of an involved party. Criteria are also given by way of example, under which gross settlement of the financial asset and the financial liability still leads to offsetting. The supplemented guidelines are to be applied retrospectively for the financial year beginning on or after 1 January 2014. We do not expect the new guidelines to have any effect on the Group‘s financial position and performance. Amendments to IFRS 7 - Financial Instruments - Disclosures - Offsetting Financial Assets and Financial Liabilities. New disclosure requirements in connection with specific netting agreements have been added to IFRS 7. The disclosure obligation applies irrespective of whether the netting agreement has actually led to offsetting the financial assets and financial liabilities concerned. Disclosures can be made on an aggregated basis, either by type of financial instrument or by type of transaction. The amendments to IFRS 7 are to be applied retrospectively for the financial year beginning on or after 1 January 2013. We do not expect the new provisions to have any effect on the Group‘s financial position and performance. IFRS 9 – Financial Instruments – Classification and Measurement In November 2009, the IASB issued a new IFRS on the classification and measurement of financial instruments. This marks the completion of the first phase of a three-phase project to replace IAS 39 Financial Instruments - Recognition and Measurement with a new standard. IFRS 9 will introduce new provisions for the classification and measurement of financial assets. In October 2010, the IASB re-issued IFRS 9 – Financial Instruments, in which new requirements for the recognition of financial liabilities have been included and requirements for the derecognition of financial assets and liabilities have been transferred from IAS 39. At the same time, the Basis for Conclusions was restructured. On 16 December 2011, the IASB published amendments to IFRS 9 – Financial Instruments and IFRS 7 – Financial Instruments – Disclosures under the heading of “Mandatory Effective Date and Transition Disclosures”. In so doing, mandatory application of IFRS 9 was postponed to the financial year beginning on or after 1 January 2015. IFRS 9 (2011) also specifies exception provisions, under which a company can make additional disclosures in the notes to its financial statements instead of adjusting the previous year‘s disclosures when changing to IFRS 9. The additional explanatory notes required in IFRS 9 were also added as an amendment to IFRS 7. It must also be possible based on the information disclosed to reconcile the
Notes
measurement categories according to IAS 39 and IFRS 9 to balance sheet items as well as to classes of financial instrument. AKG is currently examining the precise impact of this with regard to accounting and measurement. Amendments to IFRS 1 – First-time Adoption of International Financial Accounting Standards – Government Loans On 13 March 2012, the IASB published a minor amendment to IFRS 1 – First-time Adoption of International Financial Reporting Standards. This amendment grants IFRS firsttime adopters the same relief with regard to accounting for government loans as existing adopters. The regulation becomes effective for the first time for financial years beginning on or after 1 January 2013. Early adoption is possible. The revised version of this standard has no effect on the consolidated financial statements of AKG because the IFRSs have already been applied for some time. Improvements to IFRSs 2009 – 2011 In May 2012, the IASB issued an omnibus of minor amendments to be made to various IFRS standards. The aim of these annual improvements is to make the content of the requirements more specific and to remove unintended inconsistencies between standards. The most recent publication includes amendments to five standards (IFRS 1, IAS 1, IAS 16, IAS 32 and IAS 34), which are all first effective retrospectively in reporting periods of a financial year beginning on or after 1 January 2013. Earlier adoption is permitted. We do not expect the amendments to have any effect on the Group‘s net assets, financial position and results of operations. IFRS amendments planned by the IASB with effects on the Group‘s net assets, financial position and results of operations The IASB draft on accounting for leases will result in a significant increase of the finance lease arrangements to be recognised in the Asklepios Group. We expect this to lead to an increase of non-current assets, standard market financial liabilities, total assets and, because of the omission of rental expenditure, an increase in EBITDA. Due to the large number of leasing arrangements, EBITDAR is already used for steering the Group.
c) Presentation and reclassifications Assets and liabilities and expenses and income have been offset in accordance with IAS 1.33 when offsetting reflects the substance of the transaction. Receivables and liabilities were netted at the level of each German federal state pursuant to the KHG (“Krankenhausfinanzierungsgesetz”: German Hospital Financing Act).
87
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The consolidated income statement, which is presented as a separate part of the consolidated financial statements in accordance with the option provided by IAS 1 (rev. 2011), has been prepared using the cost-summary method. All amounts in the consolidated financial statements are disclosed in thousands of euro (€ k) or millions of euro (€ m) if no other currency unit is specified. In order to improve presentation of performance, revenue and other operating income for financial year 2011 of € 0.4m have been adjusted in these financial statements on the basis of account reclassifications. Furthermore, interest expenses from pension provisions are now presented consistently in interest expense; in this respect, they have been reclassified from personnel expenses to interest expense at € 0.5m in the previous year. In addition, for clarity in the statement of financial position, financial and non-financial assets and liabilities have been differentiated, which in the previous year occurred via the classifications in the notes to the consolidated financial statements. Receivables from corporate tax credits have also been reclassified from other assets to income tax assets (31 December 2011: € 2.6m, 1 January 2011: € 2.8m). Liabilities from interest caps (cash flow hedges) were reclassified from other provisions to other financial liabilities (31 December 2011: € 0.8m, 1 January 2011: € 0m). The adjustments made improve clarity in the statement of financial position and have not had a significant impact on the Group‘s performance indicators.
d) Financial year The financial year is the calendar year.
2) Approval of the financial statements The management authorised the Company‘s consolidated financial statements for issue by signature. We point out that the previous year’s financial statements of the company consolidated in the Asklepios Kliniken Verwaltungsgesellschaft subgroup and of the parent company were not established, the parent company’s consolidated financial statements were not approved and the management were not granted discharge. However, the shareholder assured that there will be no change to the annual and consolidated financial statements of 2011.
Notes
II. Operating segment reporting According to IFRS 8 – Operating Segments, the segment information on operating segments must be presented in the way internal reporting is made to the chief operating decisionmaker (management approach). An operating segment is a component of an entity: a) that engages in business activities from which it may earn revenue and incur expenses (including revenue and expenses relating to transactions with other components of the same entity), b) whose operating results are regularly reviewed by the entity‘s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance; and c) for which discrete financial information is available. An operating segment may engage in business activities for which it has yet to earn revenue, for example, start-up operations may be operating segments before earning revenue. In our group, the chief operating decision maker is group management. This body makes the strategic decisions for the Group. It receives regular reports on the figures for the hospitals and entities. Based on our understanding of offering integrated healthcare services, we do not make a distinction in terms of control between services allocable to the inpatient or outpatient sector or rehabilitation or care sector as defined by the SGB (“Sozialgesetzbuch”: German Social Code). Based on this approach, we still have one reportable operating segment. All revenue for all of our activities is recorded in Germany and (with the exception of our service companies, which almost exclusively generate internal, consolidated revenue) with external customers or payers. For the breakdown of revenue by business segment, please refer to Section VII.
89
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III. Currency translation The consolidated financial statements are prepared in euro, which is the functional and reporting currency of the Group. Transactions in foreign currencies are translated to the functional currency at the rates prevailing at the date of the transaction. Gains and losses from the settlement of such transactions and from the translation at the closing rate of monetary assets and liabilities in foreign currencies are recognised in the consolidated income statement unless they are recognised as qualifying cash flow hedges and qualifying net investment hedges in equity (other comprehensive income).
IV. Consolidation, accounting and measurement methods The financial statements of the entities included in the consolidated financial statements of the Company were all drawn up on the basis of uniform accounting policies. The financial statements of all entities included are prepared as of the cut-off date of the consolidated financial statements.
1) Basis of consolidation a) Subsidiaries In addition to AKG as the ultimate parent, the consolidated group also includes the subsidiaries in which AKG exercises control, either directly or indirectly (generally voting right > 50 %). Subsidiaries are included in the consolidated financial statements by way of full consolidation from the date on which the Group obtains control, directly either or indirectly, meaning that it can control the financial and operating policy of the respective subsidiary. Potential, exercisable voting rights are taken into account in the assessment of whether there is control over a subsidiary. The date of acquisition is defined as the date on which control of the net assets and financial and operating policies of the acquiree is transferred to the acquirer. The subsidiaries are removed from the consolidated group as soon as control ends.
Notes
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value, and the amount of any non-controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree‘s identifiable net assets. Acquisition costs incurred are expensed and included in administrative expenses. Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of contingent consideration deemed to be an asset or liability will be recognised in accordance with IAS 39 either in the consolidated income statement or as a change to other comprehensive income. If the contingent consideration is classified as equity, it is not remeasured until it is finally settled within equity. Any hidden reserves and hidden liabilities disclosed during initial consolidation in the course of the fair value measurement of assets and liabilities are carried forward, amortised or reversed in subsequent periods based on the development of the assets and liabilities. Goodwill is tested for impairment at least once a year in subsequent periods and, if impaired, is written down to its recoverable value. If shares are acquired in stages, the difference between the acquisition cost and the pro rata equity is recognised as goodwill. In this case, the share of equity previously held by the acquirer is remeasured at the fair value on the acquisition date and the gain or loss arising is recognised in profit and loss. Intercompany expenses and income as well as receivables and liabilities between consolidated entities are eliminated. Intercompany profits and losses are eliminated if material. In the case of consolidation measures with an effect on income, the effects for income tax purposes are considered and deferred taxes reported.
b) Associates Associates are entities over which the Group has significant influence but no control. Investments in associates are reported using the equity method and initially measured at cost. The share of the Group in associates contains the goodwill incurred on acquisition. The share of the Group in gains and losses of associates is recognised in the consolidated income statement from the date of acquisition, while the share of changes in the reserves is recognised in the Group‘s reserves. The total changes after the acquisition are offset against the carrying amount of the investment. Dividend payments are subtracted accordingly from the amount recognised in equity. If the Group‘s share of losses in an associate corresponds
91
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to or exceeds the Group‘s interest in this entity, including other unsecured receivables, the Group will not recognise any further losses unless it has entered into obligations for the associate or has made payments for the associate. If the associate subsequently reports profits, the Group resumes recognising its share of those profits only once its share of the profits exceeds the share of losses not recognised. Unrealised gains resulting from transactions between group entities and associates are eliminated in proportion to the Group‘s interest in the associate. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. The accounting policies of associates were amended where necessary to guarantee uniform accounting within the Group. In the previous year, the investment in an associate was tested for impairment using an impairment test pursuant to IAS 28.33 in conjunction with IAS 39.58 et seq. and was written down to the lower value in the case of impairment. This was based on the parameters of a growth rate of 0.5 % to 2.5 % and a pre-tax discount rate of 7.9 % to 8.9 %. In accordance with the impairment test carried out pursuant to IAS 28.33 in conjunction with IAS 36, an impairment loss of € 51.3m was recognised in full on one company consolidated at equity in the previous year based on the planning parameters described above. The impairment was purely of an accounting nature and did not affect cash flows. Key factors for this were the generally difficult market conditions for hospital operators on the relevant market, which were caused by the financial and economic crisis and the national debt crisis. This led to a significant deterioration of performance. Market observers and local management ruled out a short-term trend reversal. Local management took steps to improve results despite the difficult market environment. On the basis of accounting using the equity method, the Group will monitor the development of the market continuously and examine the possibility of reversing the impairment of the investment in accordance with IAS 28.33 if the market environment does improve substantially and the planning parameters are fulfilled in subsequent periods.
c) Other equity investments Equity investments of the Group that are neither fully consolidated as subsidiaries (IAS 27) nor consolidated as associates (IAS 28) are accounted for in accordance with the principles of IAS 39. The Group reports such equity investments as “Available-for-sale financial assets”. When recognised initially, they are measured at fair value. During initial recognition, transaction costs are regarded as part of the purchase price. After initial measurement, available-for-sale financial assets are measured at fair value with unrealised gains or losses being recognised directly in other comprehensive income in the reserve for available-for-sale financial assets.
Notes
d) Transactions with non-controlling interests Non-controlling interests represent the portion of profit or loss and net assets attributable to shares not held by equity holders of the parent. Non-controlling interests are disclosed separately in the consolidated income statement, consolidated statement of comprehensive income and consolidated statement of financial position. They are presented in equity in the consolidated statement of financial position. Transactions with non-controlling interests without loss of control are treated as transactions with equity owners of the Group. When acquiring a non-controlling interest, the difference between the payment made and the related share of the carrying amount of the net assets of the subsidiary is recognised in equity. Gains and losses resulting from the sale of noncontrolling interests are also recognised in equity. Basis of consolidation The following entities belonged to the consolidated group as of 31 December 2012. Other supplementary information provided includes the amount of the interest (direct and indirect) and whether or not the respective entity made use of the exemption in Sec. 264 (3) HGB and Sec. 264b HGB not to prepare a management report or meet disclosure requirements.
Entity, registered office AKG Klinik Hohwald GmbH, Königstein
Share of capital in % 2012
Share of capital in % 2011
Sec. 264 (3) HGB and Sec. 264b HGB
100.00
100.00
yes
AKG Klinik Parchim GmbH, Königstein
100.00
100.00
yes
AKG Kliniken GmbH, Königstein
100.00
100.00
yes
Ambulantes Gesundheitszentrum Schwedt GmbH, Schwedt
100.00
100.00
yes
Asklepios - ASB Krankenhaus Radeberg GmbH, Radeberg
94.00
94.00
no
Asklepios Dienstleistungsgesellschaft mbH, Königstein
100.00
100.00
yes
Asklepios Dienstleistungsgesellschaft Hamburg mbH, Hamburg
100.00
100.00
no
Asklepios Fachkliniken Brandenburg GmbH, Brandenburg
100.00
100.00
yes
94.00
94.00
yes
Asklepios Gesundheitszentrum Bad Tölz GmbH, Bad Tölz
100.00
100.00
yes
Asklepios Gesundheitszentrum GmbH, Königstein
100.00
100.00
yes
Asklepios Fachklinikum Stadtroda GmbH, Stadtroda
93
94
Asklepios annual report 2012
Share of capital in % 2012
Share of capital in % 2011
Sec. 264 (3) HGB and Sec. 264b HGB
Asklepios International GmbH, Königstein
100.00
100.00
no
Asklepios International Beteiligungsgesellschaft mbH, Königstein
100.00
100.00
no
Asklepios e-Health GmbH, Königstein
100.00
100.00
no
Asklepios Hamburg Personalservice GmbH, Hamburg
100.00
100.00
no
94.00
94.00
yes
Asklepios Klinik Alsbach GmbH, Königstein
100.00
100.00
yes
Asklepios Klinik Bad Salzungen GmbH, Königstein
100.00
100.00
yes
Asklepios Klinik Bad Griesbach GmbH & Cie OHG, Königstein
94.00
94.00
Asklepios Klinik Eimsbüttel GmbH, Hamburg
Entity, registered office
Asklepios Harzkliniken GmbH, Goslar
94.00
94.00
yes
Asklepios Klinik Fürstenhof Bad Wildungen GmbH, Königstein
100.00
100.00
no
Asklepios Klinik Gauting GmbH, Königstein
100.00
100.00
yes
Asklepios Kliniken Hamburg GmbH, Hamburg
74.90
74.90
yes
Asklepios Kliniken Langen-Seligenstadt GmbH, Langen
94.00
94.00
no
Asklepios Klinik Lich GmbH, Lich
94.00
94.00
yes
Asklepios Klinik Lindau GmbH, Lindau
100.00
100.00
yes
Asklepios Klinik Lindenlohe GmbH, Königstein
100.00
100.00
no
Asklepios Klinik Sankt Augustin GmbH, Sankt Augustin
100.00
100.00
yes
Asklepios Klinik Pasewalk GmbH, Königstein
100.00
100.00
yes
Asklepios Klinik Schaufling GmbH, Königstein
100.00
100.00
yes
Asklepios Klinik Sobernheim GmbH, Königstein
100.00
100.00
yes
Asklepios Klinik Wiesbaden GmbH, Königstein
99.00
99.00
yes
Notes
Share of capital in % 2012
Share of capital in % 2011
Sec. 264 (3) HGB and Sec. 264b HGB
Asklepios Klinik Dr. Walb Homberg / Ohm, GbR, Königstein
94.00
94.00
yes
Asklepios Klinik Bad Wildungen GmbH, Königstein
94.00
94.00
N / A
Asklepios Kliniken Verwaltungsgesellschaft mbH, Königstein
100.00
100.00
yes
Asklepios Kliniken Weißenfels – Hohenmölsen GmbH, Weißenfels
100.00
100.00
no
Asklepios Klinikum Bad Abbach GmbH, Königstein
94.00
94.00
yes
Asklepios Klinikum Uckermark GmbH, Schwedt
94.00
94.00
yes
Asklepios Krankenpflegeschulen gGmbH, Königstein
95.00
95.00
no
Asklepios Hamburg Beteiligungsgesellschaft mbH, Hamburg
100.00
100.00
no
Asklepios medi top Pflegedienst & Service GmbH, Hamburg
95.30
95.30
no
Asklepios Medical School GmbH, Hamburg
100.00
100.00
no
Asklepios MZV Nord GmbH, Hamburg
100.00
100.00
no
Asklepios MVZ Nord Schleswig Holstein GmbH, Hamburg
100.00
100.00
yes
Asklepios MVZ Mitteldeutschland GmbH, Stadtroda
100.00
100.00
yes
Asklepios MVZ Weißenfels GmbH, Weißenfels
100.00
100.00
yes
99.00
99.00
yes
100.00
100.00
yes
Entity, registered office
Asklepios Nordseeklinik Westerland GmbH, Königstein Asklepios Pflegeheim Weserblick GmbH, Königstein Asklepios Poland sp. Z o.o w organizacji, Poznan
100.00
0.00
yes
Asklepios Privita GmbH, Hamburg
100.00
100.00
no
Asklepios Psychiatrie Langen GmbH, Langen
100.00
100.00
no
Asklepios Psychiatrie Niedersachsen GmbH, Göttingen
100.00
100.00
yes
Asklepios Reha - Klinik Bad Schwartau GmbH, Königstein
100.00
100.00
no
95
96
Asklepios annual report 2012
Share of capital in % 2012
Share of capital in % 2011
Sec. 264 (3) HGB and Sec. 264b HGB
Asklepios Schwalm-Eder-Kliniken GmbH, Schwalmstadt
94.00 1)
94.00 1)
no
Asklepios Schwalm-Eder-Kliniken Dienstleistungs-GmbH, Schwalmstadt
100.00
100.00
yes
Asklepios Services Hamburg GmbH, Hamburg
100.00
100.00
no
Asklepios Servicegesellschaft mbH, Königstein
100.00
100.00
no
Asklepios Stadtklinik Bad Tölz GmbH, Königstein
100.00
100.00
yes
Asklepios Stadtkrankenhaus Seesen GmbH, Seesen
100.00
100.00
no
Asklepios Südpfalzkliniken GmbH, Burglengenfeld
100.00
100.00
yes
Asklepios Therapie GmbH, Königstein (vormals: Asklepios Bad Salzungen Service GmbH)
100.00
100.00
no
Asklepios Universitätsklinika GmbH & Co KGaA, Königstein (in 2012 aufgelöst)
0.00
100.00
N / A
Asklepios Weserbergland-Klinik GmbH, Höxter
100.00
100.00
yes
Asklepios Westklinikum Hamburg GmbH, Hamburg
74.949
74.949
yes
Asklepios Wirtschaftsbetriebe GmbH, Königstein
100.00
100.00
yes
Cleaning in Gesundheitsbetrieben CleaniG GmbH, Hamburg
100.00
100.00
no
Cortex Software GmbH, Offenburg
100.00
100.00
no
DKL - Dienstleistungsgesellschaft Krankenhaus Lindau mbH, Lindau
100.00
100.00
no
Dr. Hoefer-Janker GmbH & Co. Klinik KG, Bonn
100.00
100.00
yes
Fachklinik Helmsweg GmbH, Hamburg
100.00
100.00
no
Fachklinik Rhein / Ruhr für Herz / Kreislauf- und Bewegungssystem GmbH & Co. KG, Essen
100.00
100.00
yes
Fachklinik Rhein / Ruhr für Herz / Kreislauf- und Bewegungssystem Verwaltungs GmbH, Essen
100.00
100.00
no
Entity, registered office
Notes
Share of capital in % 2012
Share of capital in % 2011
Sec. 264 (3) HGB and Sec. 264b HGB
Fachklinikum Wiesen GmbH, Königstein
100.00
100.00
yes
GFB medi GmbH, Alsbach
100.00
100.00
no
GKB Klinikbetriebe GmbH, Königstein
99.00
99.00
yes
HDG-Harzkliniken Dienste GmbH, Goslar
100.00
100.00
yes
Herzzentrum Lahr / Baden GmbH & Co. KG, Bad Rappenau
94.485
94.485
yes
Entity, registered office
HKW Hamburger Krankenhauswäscherei GmbH, Hamburg
51.00
51.00
no
KB Krankenhausbeteiligungsgesellschaft mbH & Co. KG, Essen
100.00
100.00
no
KB Krankenhausbeteiligungsverwaltungsgesellschaft mbH, Essen
100.00
100.00
yes
KLS – Facility Management GmbH, Langen
100.00
100.00
no
Kraichgau-Klinik Aktiengesellschaft, Bad Rappenau
94.485
94.485
no
Kraichgau-Klinik Bad Rappenau GmbH & Co. KG, Bad Rappenau
94.485
94.485
yes
MC Service GmbH, Offenburg
100.00
100.00
no
MediClin AG, Offenburg
52.73
52.73
no
MediClin a la Carte GmbH, Offenburg
100.00
100.00
no
MediClin Geschäftsführungs-GmbH, Offenburg
100.00
100.00
no
MediClin GmbH & Co. KG, Offenburg
100.00
100.00
yes
MediClin Immobilien Verwaltung GmbH, Offenburg
100.00
100.00
no
87.00
87.00
no
MediClin Medizinisches Versorgungszentrum GmbH, Offenburg
100.00
100.00
no
MediClin Medizinisches Versorgungszentrum Bonn GmbH, Bonn
100.00
100.00
no
0.00
100.00
N / A
100.00
100.00
no
MediClin Krankenhaus am Crivitzer See GmbH, Crivitz
MediClin Müritz-Klinikum GmbH & Co. KG, Waren (in 2012 auf MediClin GmbH & Co. KG verschmolzen) MediClin Pflege GmbH, Offenburg
97
98
Asklepios annual report 2012
Share of capital in % 2012
Share of capital in % 2011
Sec. 264 (3) HGB and Sec. 264b HGB
MediClin Therapie GmbH, Offenburg
100.00
100.00
no
MEDILYS Laborgesellschaft mbH, Hamburg
100.00
100.00
no
Medizinische Einrichtungs-Gesellschaft mbH, Schwedt
100.00
100.00
yes
MPS Medizinische Personal- und Servicegesellschaft mbH Kettwig, Essen
100.00
100.00
no
MVZ Bad Oldesloe GmbH, Königstein
100.00
100.00
yes
MVZ Hamburg-Ost HOG GmbH, Hamburg
100.00
100.00
no
51.00
51.00
no
100.00
100.00
no
Entity, registered office
MVZ Hanse Histologikum GmbH, Hamburg MVZ-Müritz GmbH, Waren MVZ Onkologie Barmbek GmbH, Hamburg
66.00
51.00
no
MVZ Vorpommern GmbH, Pasewalk
100.00
100.00
yes
Nordseeklinik Neubau GmbH, Königstein
100.00
100.00
yes
Personalagentur für Gesundheit GmbH, Alsbach
100.00
100.00
yes
ProCuraMed AG, Bern (Schweiz)
100.00
100.00
N / A
Asklepios Lindau Beteiligungsgesellschaft mbH, Lindau
100.00
100.00
no
PROMEDIG gemeinnützige Gesellschaft für medizinische Innovation mbH, Hamburg
100.00
100.00
no
ProVivere GmbH, Hamburg
100.00
100.00
no
Rehabilitationszentrum Gernsbach / Schwarzwald GmbH & Co. KG, Bad Rappenau
94.485
94.485
yes
0.00
100.00
N / A
Reha - Klinik Schildautal Investgesellschaft mbH, Königstein
99.00
99.00
yes
Sächsische Schweiz Kliniken GmbH, Sebnitz
74.90
74.90
no
Reha-Klinik GmbH & Co. KG, Soltau, Soltau (in 2012 auf MediClin GmbH & Co. KG verschmolzen)
Notes
Entity, registered office Überörtliche Berufsausübungsgemeinschaft Dr.Wegener & MVZ Bad Oldesloe, Bad Oldesloe
Share of capital in % 2012
Share of capital in % 2011
Sec. 264 (3) HGB and Sec. 264b HGB
75.00
75.00
N / A
VR-Leasing ABYDOS GmbH & Co. Immobilien KG, Eschborn
44.408
44.408
no
MC Kliniken GeschäftsführungsGmbH, Offenburg ( vormals Yvonne Mobilien-Leasing GmbH, Offenburg)
94.485
94.485
no
ZIT Zentralinstitut für Transfusionsmedizin GmbH, Hamburg
100.00
100.00
no
1) Economically allocable share: 99 %
In the financial year 2012, Asklepios Poland sp.z.o.o.w organizaciji, Poznan, was founded. By resolution dated 26 May 2011, the Schwedt / Oder town council resolved to sell the share of Asklepios Klinikum Uckermark GmbH belonging to the town of Schwedt / Oder and thus to accept the offer from Asklepios Kliniken Verwaltungsgesellschaft mbH with effect from 1 January 2012. Asklepios Kliniken Verwaltungsgesellschaft mbH named RKG Reha Kliniken GmbH as the buyer. In the financial year, MVZ Hanse Histologikum GmbH, Hamburg, MVZ Onkologie Barmbek GmbH, Hamburg, and KHW Hamburger Krankenhauswäscherei GmbH, Hamburg, were fully consolidated for the first time (in the previous year, they were recognised at cost). The change in the consolidated group resulted in an increase of goodwill that is already attributable to goodwill recognised in the separate financial statements in the form of practice goodwill.
99
100
Asklepios annual report 2012
The following companies are accounted for at acquisition cost as it was not possible to determine their fair values reliably (shares in capital unchanged year-on-year): Share of capital in %
Equity in € k
Annual result in € k
64.385
45
-17
MediServ GmbH, Essen
51.00
109
42
Medusplus GmbH, Essen
51.00
85
38
Müritz-Klinikum Service GmbH, Waren
51.00
129
31
Entity, registered office KDC-Krankenhaus-Dienstleistungsgesellschaft Crivitz mbH, Crivitz
MAH Medizinische Akademie Hamburg GmbH, Hamburg
49.00
26
-10
4QD – Qualitätskliniken.de GmbH
25.00
206
-214
Bad Griesbacher Tunnelanlagen GmbH & Co. Betriebs – KG, Bad Griesbach
15.50
-
--
KVMed Beteiligungsgesellschaft mbH
10.00
-
-
8.00
-
-
PCG proconsilio AG, Hamburg
The following companies are accounted for using the equity method (shares in capital unchanged year-on-year): Entity, registered office
Share of capital in %
Collm Klinik Oschatz gGmbH, Oschatz
25.00
Athens Medical Center S.A., Athen
30.73
INI International Neuroscience Institute Hannover GmbH, Hannover
49.00
2) Intangible assets Intangible assets are initially measured at cost. The cost of an intangible asset acquired in a business combination is its fair value at the acquisition date. After initial recognition, intangible assets are carried at amortised cost. The useful lives of these intangible assets are assessed to be either finite or indefinite.
Notes
Intangible assets with a finite useful life are amortised over their useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at the end of each financial year at least. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, and treated as changes in accounting estimates. Useful life in years Software and licenses Brands and customer bases
3–7 10 - 20
Impairment is recognised in the income statement in amortisation and impairment of intangible assets and depreciation and impairment of property, plant and equipment. With the exception of goodwill, there are no intangible assets with an indefinite useful life in the Group. The Group does not have any internally generated intangible assets.
3) Goodwill Goodwill arising from a business combination is initially measured at cost, which is the excess of the cost of the business combination over the Group‘s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities acquired. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment annually, or more frequently using an impairment test if events or changes in circumstances indicate that the carrying amount may be impaired. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group‘s cash-generating units, or groups of cash-generating units (CGUs), that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units. Each unit or group of units to which the goodwill has been allocated represents the lowest level in the Group at which goodwill is monitored for internal management purposes. Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cash-generating units) to which the goodwill relates. The recoverable amount is the higher of an asset‘s net selling price and its value in use. Where the recoverable amount of the cash-generating unit (group of cash-generating units) is less than the carrying
101
102
Asklepios annual report 2012
amount, an impairment loss is recognised. If the impairment exceeds the carrying amount of the goodwill, the difference shall be allocated proportionally to the CGU’s assets. If the reasons for impairment cease to exist, impairment of goodwill is not reversed. Impairment is recognised in the income statement in amortisation and impairment of intangible assets and depreciation and impairment of property, plant and equipment.
4) Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Depreciation is based on the following useful lives: Useful life in years Land rights
60 years
Residential and commercial buildings
20 – 52 years
Land improvements
10 – 20 years
Plant and machinery
6 – 30 years
Other equipment, furniture and fixtures
3 – 15 years
The carrying amounts of property, plant and equipment are tested for impairment as soon as there is any indication that the carrying amount of an asset exceeds its recoverable amount. Property, plant and equipment are derecognised upon disposal or when no further economic benefits are expected from their continued use or sale. The gain or loss on derecognition is determined as the difference between the net disposal proceeds and the carrying amount and recognised in the consolidated income statement in the period in which the item is derecognised. The residual values of the assets, useful lives and depreciation methods are reviewed at the end of each financial year and adjusted if necessary. The cost of repairing property, plant and equipment, including current maintenance costs, for example, are recognised in profit or loss.
Notes
5) Government grants The Company receives government grants for different programs subsidised by the state. Government grants are recognised according to IAS 20 (Accounting for Government Grants and Disclosure of Government Assistance) only if it is reasonably certain that the conditions attached to the grants will be fulfilled and the grants actually awarded. If government grants are made for the purchase of property, plant and equipment, these grants are offset against the cost of the asset in accordance with IAS 20.24. In addition, the Company receives grants which are earmarked for financing current expenses. These grants are recognised in profit or loss and deducted from the corresponding expenses in the appropriate period. Assistance granted to entities in the Group in the form of an interest benefit in the granting of non-interest bearing or low-interest bearing loans is determined at the time of granting and also deducted from the cost of the subsidised asset.
6) Leases The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset. Leases under which a material portion of the risks and rewards connected with ownership of the leased property are retained by the lessor are classified as operating leases. In this case, payments made are charged to the income statement on a straight-line basis over the period of the lease. Leases under which the Group bears the key risks and enjoys the benefits of ownership of the leased property are classified as finance leases. Finance lease assets are capitalised at the time of the lease’s commencement at the lower of the fair value of the leased property and the present value of the minimum lease payments. A leasing liability is recorded for the same amount. Each lease instalment is split into an interest component and a repayment component in order to keep the interest charged on the leasing liability at a constant level. The interest component of the leasing instalment is recorded in the income statement as expenditure so that a constant rate of interest is incurred over the term of the lease. The corresponding finance lease asset is depreciated over the term of the lease or, if shorter, the economic life of the leased property.
103
10 4
Asklepios annual report 2012
7) Research and development costs Research is original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding. Development is the technical and commercial application of research findings. Research costs are expensed as incurred. The portion of development costs for which the prerequisites for recognition as an intangible asset pursuant to IAS 38 – Intangible Assets are met in full is recognised as an intangible asset. Development costs that must be capitalised were not incurred (prior year: € 0.7m). Research costs were incurred at the amount of the reported income.
8) Borrowing costs Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of that asset (IAS 23.11). In financial year 2012, no borrowing costs were capitalised in connection with construction projects, as in the previous year. All other borrowing costs are expensed in the period in which they were incurred (IAS 23.10).
9) Impairment of non-financial assets Other intangible assets and property, plant and equipment are subject to impairment testing by the Company in accordance with IAS 36. An impairment loss is charged on other intangible assets and property, plant and equipment if, as a result of certain events or developments, the carrying amount of the asset is no longer covered by the expected proceeds from the sale or the discounted net cash flow from further use. If it is not possible to determine the recoverable amount for individual assets, the cash flows are determined from the next higher cash-generating unit. Impairment losses are reversed if the reason for impairment ceases to apply in subsequent years. The reversal of impairment losses is limited to the maximum amount of amortised cost that would have resulted had the impairment losses not been charged. The Company‘s impairment tests are carried out once every financial year. Net cash flows are determined on the basis of forecasts for the individual reporting units; for subsequent years, the net cash flow trend is determined. The expected net cash flows are discounted using a risk-adjusted interest rate. Other parameters are derived from standardised industry figures. We use the expertise of independent advisory firms for this purpose.
Notes
The following parameters were used consistently for all cash-generating units, or groups of cash-generating units (CGUs), when testing for impairment:
Planning horizon Growth rate Discount rate after tax
2012
2011
3-5 years
3-5 years
0.5 %
0.5 %
3.2 % to 4.3 %
4.8 % to 6.0 %
Our business model includes the turnaround of loss-making clinics / institutions, which generally takes up to five years in the industry.
10) Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial instruments recognised as financial assets or financial liabilities are reported separately. Financial instruments are recognised as soon as a group entity becomes a party to the financial instrument. Financial instruments are initially measured at fair value. Transaction costs are initially recognised as part of the purchase price (except for transaction costs incurred for financial assets, which are measured at fair value through profit or loss). For subsequent measurement, the financial instruments are allocated to one of the measurement categories listed in IAS 39 (Financial Instruments: Recognition and Measurement). Financial assets are derecognised if the rights to cash flows have expired or if the right to receive the cash flows has been transferred and the Group has substantially transferred all risks and rewards incidental to ownership. Financial assets as defined by IAS 39 are broken down into financial assets at fair value through profit or loss, loans and receivables, available-for-sale financial assets and derivative financial instruments. The classification depends on the purpose for which the financial asset in question was acquired. Regular way purchases and sales of financial assets are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of the asset within the period generally established by regulation or convention in the marketplace.
105
106
Asklepios annual report 2012
a) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss are financial assets classified as held for trading. Financial assets such as shares or interest-bearing securities are classified as held for trading if they are acquired for the purpose of selling in the near term. Gains or losses on financial assets held for trading are recognised in profit or loss. An exception to this relates to financial instruments designated for hedge accounting. Gains or losses on these are recognised in other comprehensive income.
b) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, such as trade receivables for example. These are disclosed under current assets, provided that they do not fall due in more than twelve months from the end of the reporting period. After initial recognition, loans and receivables are subsequently measured at amortised cost using the effective interest method minus any reduction for impairment. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired. The time value of money from using the effective interest method is also recognised in profit or loss.
c) Available-for-sale financial assets Available-for-sale financial assets are those non-derivative financial assets that are designated as available for sale or are not classified in any of the preceding categories. They are disclosed under non-current assets, unless the Group plans their disposal within twelve months of the end of the reporting period. After initial measurement, available-for-sale financial assets are measured at fair value with unrealised gains or losses being recognised in equity. If there is objective evidence that the asset is impaired or if there are changes in the fair value of a financial liability from exchange rate fluctuations, these are reclassified from equity to profit or loss. If the reasons for an impairment loss recorded in prior years no longer apply, the impairment loss is reversed through profit and loss to the extent that it does not exceed amortised cost. Should the reversal of impairment exceed amortised cost, the surplus is recognised in equity. When the investment is disposed of, the cumulative gain or loss previously recorded in equity is reclassified and recognised in the consolidated income statement. The Group determines the classification of its financial assets upon initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year-end.
Notes
The carrying amount of cash and cash equivalents, receivables, and current liabilities approximates fair value due to the relatively short-term maturity of these instruments. The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business at the end of the reporting period.
d) Derivative financial instruments Derivative financial instruments are financial contracts whose value is derived from the price of an asset (such as shares, obligations, money market instruments or commodities) or a reference rate (such as currencies, indices and interest rates). Little or no initial investment is required and they are settled in the future. Examples of derivative financial instruments include options, forward transactions or interest rate swaps. Unless used for hedging, derivative financial instruments are usually recognised at their fair value in profit or loss in accordance with IAS 39. The Company adheres to the requirements of IAS 39 with respect to cash flow hedge accounting. By definition, a cash flow hedge is a hedge of the exposure to variability in cash flows that (a) is attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction and (b) could affect profit or loss. Provided that the hedging relationship is effective, changes in the value of cash flow hedging instruments are initially recorded in other comprehensive income in a separate equity item (cash flow hedge reserve). The corresponding amount is released to income from the cash flow hedge reserve in the period in which the hedged transaction (e.g. a variable interest payment) has an effect on profit or loss. The disclosure option pursuant to IAS 39.98b is not applied. Under this option, associated gains and losses are removed and included in the initial cost or other carrying amount of the asset or liability. The ineffective portion of the gain or loss on a hedging instrument is recognised immediately in profit or loss. The Company uses cash flow hedges to hedge against the risk of increasing interest cash flows from liabilities subject to floating rates of interest. Accordingly, an appropriate interest cap that meets the main conditions is entered into when a liability subject to a floating rate of interest is accepted. Only the intrinsic value of the interest cap is designated as the hedging instrument. Since it qualifies as a derivative, the fair value of the interest cap is recognised in profit or loss. When designating the hedging relationship, the Company documents the relationship between the underlying transaction as well as risk management objective and strategy. Both the prospective and retrospective effectiveness of the hedging relationship is assessed upon designation and at the end of each subsequent reporting period.
107
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Asklepios annual report 2012
As of 31 December 2012, the Group holds derivative financial instruments in the form of interest caps (hedging) that must be measured at fair value. The fair value of the interest caps is recognised under other financial assets at a carrying amount of € 111k (prior year: € 421k), while the present value of the premium payments is recognised under other financial liabilities at a carrying amount of € 1,350k (prior year: € 1,880k). In addition, there are financial liabilities from interest caps in cash flow hedging relationships of € 1,660k (prior year: € 789k). A hedging reserve of € 1,398k (prior year: € 664k) is recognised in other comprehensive income. In future, interest rate hedges measured at fair value can be used to hedge against rising interest rates of financial liabilities with floating interest rates and the following volumes: Financial year
in € m
2013
169.4
2014
159.8
2015
148.9
2016
68.3
2017
59.0
The Company adheres to the requirements of IAS 39 with respect to fair value hedge accounting. Changes in the fair value of derivatives designated to hedge the fair value of the hedged item are recognised in the income statement together with the changes in the fair value of the hedged item. An offer available to the Group for the acquisition of financial assets was designated as a fair value hedge to hedge fluctuations of the market price. If the hedge can be considered effective, the carrying amount of the hedging object is adjusted for the changes in the fair value attributable to the hedged risk. The following table shows the changes in hedged items and hedging instruments in fair value hedge relationships recognised in profit or loss: in € m Expense from hedged items
-43.2
Income from hedging instruments
+43.2
Ineffective portion
0.0
Notes
e) Financial liabilities Financial liabilities as defined by IAS 39 are classified as financial liabilities at fair value through profit or loss or as other financial liabilities. The Group determines the classification of its financial liabilities upon initial recognition and, where allowed and appropriate, reassesses this designation at each financial year-end. Financial liabilities at fair value through profit or loss are measured at fair value upon initial recognition. Gains and losses from changes in fair value are recognised immediately in profit or loss. As in the prior year, the Group has not allocated any financial liabilities to the category “financial liabilities measured at fair value through profit or loss” as of the end of the reporting period. Financial liabilities, which are therefore all allocated to the category “financial liabilities measured at amortised cost”, are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, financial liabilities are subsequently measured at amortised cost using the effective interest method. They are reported under other liabilities. A financial liability is derecognised when the obligation underlying the liability is discharged, cancelled or expires.
109
110
Asklepios annual report 2012
f) Relationship between classes, categories and recognition of financial instruments The relationship between classes and categories and the allocation of the items in the statement of financial position to the classes is shown in the following table: Category Loans and receivables
Available-for-sale financial assets
Financial liabilities measured at amortized cost
Cash and cash equivalents Assets recognized at carrying amount
Not allocated to any category Cash and cash equivalents
Trade receivables Other assets (exception: derivatives designated as hedging instruments) Financial assets (if belonging to this category)
Assets recognized at fair value Liabilities measured at amortized cost
Financial assets (if belonging to this category) Trade payables Financial liabilities Participation capital / subordinated capital Other liabilities (exception: derivatives designated as hedging instruments)
Liabilities recognized at fair value Derivates designed as hedging instruments
Financial liabilities Other liabilities (if designated as a hedging instrument) Other assets (if designated as a hedging instrument)
Finance leases
Finance lease liabilities
Notes
11) Income taxes a) Current tax assets and liabilities Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities.
b) Deferred taxes Deferred tax is recognised using the liability method on all temporary differences as of the end of the reporting period between the carrying amounts of assets and liabilities in the consolidated statement of financial position and their tax bases. Deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Future changes in tax rates are taken into account as at the end of the reporting period, to the extent that their material effectiveness conditions are fulfilled in the course of the legislative process. Deferred tax assets are recognised for all deductible temporary differences and unused tax loss carryforwards to the extent that it is probable that taxable income will be available against which the deductible temporary differences and the unused tax loss carryforwards can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised. Unrecognised deferred tax assets are reviewed at the end of each reporting period and recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be realised. As in the prior year, a corporate income tax rate of 15 % plus a solidarity surcharge of 5.5 % assessed on the corporate income tax was used to determine deferred taxes as of 31 December 2012. The operating clinics are generally exempt from trade tax. For transactions and other events recognised directly in equity or in other comprehensive income, any taxes on income are either recognised directly in equity or in other comprehensive income, and not in the consolidated income statement. For 2012, this related to a change in the fair value of cash flow hedges of € 138k (prior year: € 125k), a change in the fair value of financial assets of € 180k (prior year: € 0k) and a change in pension commitments of € 4,977k (prior year: € 1,195k). Deferred tax assets and deferred tax liabilities are offset against each other when the Group has an enforceable right to offset the current tax assets against the tax liabilities and these assets and liabilities relate to income taxes levied by the same tax authority for the same taxable entity. Deferred taxes are not discounted.
111
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12) Inventories Inventories are measured at the lower of the cost and net realisable value in accordance with IAS 2, using their average cost price as a simplified measurement method. All identifiable risks in inventories resulting from an above-average storage period or reduced options for disposal of inventories are taken into account by carrying out appropriate impairments. Work in process concerns so-called ‘inpatients’. Work in process relates to inpatients whose treatment is still ongoing as of the end of the reporting period. We do not report any income realised in accordance with the percentage of completion method from estimates and assumptions from the measurement of these inpatients (zero profit method, see IV.19 for more details). The number of patients in the hospital is recorded as of the end of the reporting period. If we have to assume as of the end of the reporting period that the contract costs will exceed contract revenue, we initially write down the estimated contract costs. We also report provisions for potential losses as necessary.
13) Trade receivables Receivables are not secured and therefore subject to the risk of total or partial default. Specific bad debt allowances in a separate allowance account are recognised if receivables are fully or partially uncollectible or it is likely that they cannot be collected, and the amount can be determined reliably. Receivables are written off directly if there is objective evidence that it will not be possible to collect the debts. The bad debt allowances make provision for all recognisable risks based on individual risk estimates and past experience.
14) Revenue recognition Revenue is generated mainly from the running of hospitals and therefore exclusively relates to revenue from the rendering of services. Similar to all other hospitals in Germany, our hospitals are subject to statutory remuneration rules (including the KHEntgG (“Krankenhausentgeltgesetz”: German Hospital Fees Act) and the BPflV (“Bundespflegesatzverordnung”: German National Hospital Rate Ordinance)). The offering of the hospitals and the prices charged to the payers (mainly health insurance companies) are regulated by a large number of laws and ordinances at state and federal level. The inpatient services provided by our hospitals are supposed to be remunerated from budgets negotiated prospectively with the statutory health insurers. In practice, however, budgets are not negotiated until the course of a financial year and some are not concluded until after the financial year has ended. In such cases there is uncertainty surrounding the agreed volume of services and / or remuneration, for which we use appropriate estimates.
Notes
Most of our revenue stems from billing DRGs under the KHEntgG in our acute hospitals. No statutory DRGs are defined for some of our services (in particular psychiatry and treatment of psychologically disturbed criminals). Remuneration here is based on the budgets negotiated according to daily nursing charges pursuant to the BPflV or local provisions. The budgets negotiated, which are generally capped, result from multiplying the service volume by the price. The budgets are negotiated by our hospitals with the payers. Dividend revenue is recognised on the date on which the right to receive the payment arises and is reported in the investment result. Interest income is recognised using the effective interest method.
15) Other receivables and other assets Other receivables and other assets are stated at amortised cost. Adequate specific bad debt allowances are recognised for items subject to risk.
16) Cash and cash equivalents Cash and short-term deposits in the statement of financial position generally comprise shortterm, highly liquid monetary deposits with an original maturity of less than three months from the date of acquisition. Cash and cash equivalents correspond to the cash and cash equivalents in the consolidated statement of cash flows.
17) Other provisions Provisions are recognised when the Group has a present obligation (legal, contractual or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the consolidated income statement, net of the amount recognised for a reimbursement that is virtually certain. Non-current provisions are discounted. Where discounting is used, the increase in the provision due to the passage of time is recognised as an interest expense.
113
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18) Pension provisions The Group has various pension plans. The plans are financed by payments to insurance companies or pension funds or by creating provisions, the amount of which is based on actuarial calculations. The Group has both defined benefit and defined contribution pension plans. A defined contribution plan is a pension plan under which fixed contribution payments are paid to an independent company (insurance company or pension fund). Under defined contribution plans, the Group makes contributions to public or private pension plans based on statutory or contractual obligations. The Group has no other payment obligations apart from the payment of the contributions. The contributions are recognised as a personnel expense when they fall due. A defined benefit plan is a pension plan that does not fall under the definition of a defined contribution plan. Typically it involves a fixed amount of pension payments to be paid to an employee upon retirement, which is usually based on one or several factors such as the employee‘s age, years of service and salary. The provision for defined benefit plans recognised in the statement of financial position corresponds to the present value of the defined benefit obligation (DBO) as of the end of the reporting period less the plan assets existing to cover the obligations. The DBO is calculated annually by an independent actuary using the projected unit credit method. The present value of the DBO is calculated by discounting the future expected cash outflows using the interest rate on high-quality corporate bonds with the same maturities as the pension obligation. The pension obligations are measured on the basis of actuarial appraisals, which include the assets available to cover these obligations. Actuarial gains and losses based on experience adjustments and changes in actuarial assumptions are recognised immediately. They are shown as components of total comprehensive income outside the consolidated income statement in the statement of comprehensive income and are posted directly in the revenue reserves following first-time recognition in total comprehensive income; they are no longer recognised in profit or loss in subsequent periods. IAS 19 (rev. 2011) introduced net interest income. Net interest income is calculated by applying the actuarial interest rate to net liabilities / net assets. When calculating net interest income according to IAS 19 (rev. 2011), the actuarial interest rate is also implicitly applied to plan assets. The difference between the (expected) net interest income and the actual income is accounted for in equity (OCI).
Notes
Under collectively bargained agreements, the Group has to make contributions for a certain number of employees to federal or state benefit plans (VBL) and to other public-sector pension plans (supplemental pension plan ZVK). The contributions are made by way of cost sharing. These plans are multiemployer plans (IAS 19.8 (rev. 2011)), as the entities involved share both the credit risk and the biometric risk. The VBL / ZVK pension is generally classified as a defined benefit pension plan (IAS 19.30 (rev. 2011)). As the information required to make a more detailed calculation of the proportion of future payment obligations attributable to the Group is not available, the requirements of IAS 19.34 (rev. 2011) are applicable. The VBL is financed primarily by cost sharing, whereby the contribution rate for a certain coverage period is determined at the level of the entire pool of insured persons and not at the level of the individual insured risk. Asklepios therefore also bears the risks (biometric, capital investment) of the other sponsoring employers of the VBL. Therefore, the obligations are to be accounted for as a defined contribution plan. There are no agreements as defined by IAS 19.36 (rev. 2011), as a result of which it is not necessary to recognise a corresponding asset or liability. The recognition of any liability item in our statement of financial position is subordinate to warrantor obligations of public-sector entities. The current contribution payments to VBL / ZVK are reported as pension costs for the respective years as post-employment benefits in personnel expenses. The pension provisions also include indirect obligations covered by the welfare funds, provided that Asklepios Kliniken GmbH or its subsidiaries are responsible for fulfilling the obligations by way of payment of the corresponding amounts to the external pension funds. The obligations are recognised less the plan assets of the welfare fund. In addition, there are obligations to civil servants of the city of Hamburg on leave of absence and individual contractual obligations to retired members of the Management Board.
19) Estimates and assumptions The preparation of the consolidated financial statements requires that assumptions or estimates be made which have an effect on the values stated in the Company‘s statement of financial position, the recognition of contingent liabilities and the disclosure of income and expenses. The key assumptions concerning the future and other key sources of estimation uncertainty as of the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities in subsequent financial years are discussed below (the carrying amounts of receivables and liabilities as well as further explanations can be found in VI.).
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•• Acquisitions: Assumptions and estimates influence the purchase price allocation for acquisitions. Contingent purchase price liabilities are recognised at fair value in the context of purchase price allocation. •• Impairment of goodwill: The Group reviews goodwill for impairment annually. This involves an estimate of the value in use of the cash-generating units (CGUs) to which the goodwill is allocated. Calculating the value in use requires the Group to make an estimate of the expected future cash flows from the cash-generating unit and also to choose the discount rates in order to calculate the present value of those cash flows. The carrying amount of goodwill as of 31 December 2012 was € 346,975k (prior year: € 337,433k). Please refer to the explanations given in IV.9) on carrying out impairment tests and the corresponding notes on goodwill. •• Fair value of investments accounted for using the equity method: Where the fair value of financial assets recorded in the statement of financial position cannot be derived from active markets, their fair value is determined using valuation techniques including the discounted cash flow model. The input parameters used in the model are based on observable market data to the extent that this is possible, and on assumptions relating to growth and interest rates. In the previous year, an impairment loss of € 51.3m was recognised on one investment accounted for using the equity method. Please refer to the explanations in IV. Consolidation, accounting and measurement methods, 1) Basis of consolidation, b) Associates. In the event of a 10 % change in the results of Athens Medical Center S.A., Athens (Greece), the impairment loss would not have been reversed in 2012. •• Inpatients (work in process): When billing our patients, we receive fixed prices for the amount of the respective DRG, which is calculated based on the base rates that are uniform for each federal state and the Germany-wide coding. The number of patients in the hospital is recorded as of the end of the reporting period. This is based on the “length of stay” milestones as a percentage of the Germany-wide average length of stay as well as the date of the operation. As the cost of these inpatients cannot be reliably determined due to the their difficult-to-assess status and the difficulty in forecasting the development of their treatment, the costs for these inpatients are calculated based on the fixed prices to which we are entitled. Because the cost of these inpatients cannot be reliably estimated as a result, no
Notes
income realised in accordance with the percentage of completion method from the treatment of these patients is reported. The income reported is limited to the amount of estimated contract costs incurred by reducing the estimated costs per inpatient (zero profit method). As of 31 December 2012, the carrying amount was € 42,813k (prior year: € 38,878k). •• Pensions and similar obligations: The amount of provisions for pensions depends on a large number of actuarial assumptions. In detail these are: •• the discount rates •• the future wage and salary increases Due to the long-term nature of these provisions, such estimates are subject to significant uncertainty. Please refer to our explanations given in IV.18) Pension provisions. •• Taxes: The calculation of taxable income is based on the assessment of the matter pursuant to the applicable legal norms and their interpretations. The amounts reported as a tax expense, tax liabilities and tax receivables are based on the assumptions made. The recognition of unused tax losses in particular requires estimates regarding the amount of the unused tax losses and the future taxable income available for offsetting against these unused tax losses. There are uncertainties surrounding the interpretation of complex tax provisions in particular. Differences from the assumptions made arising at a later date are recognised in the period in which they arose. The income and expenses from such differences are recognised in the period incurred or recorded. Please refer to IV. 11 Income taxes. •• Revenue recognition: The inpatient services provided by our hospitals are supposed to be remunerated from budgets negotiated prospectively with the statutory health insurers. In practice, however, budgets are not negotiated until the course of a financial year and some are not concluded until after the financial year has ended. In such cases there is uncertainty surrounding the agreed volume of services and / or remuneration, for which we use appropriate estimates. Past experience has shown that the imprecision inherent in every estimate is immaterial in this case in proportion to revenue. •• Other provisions Estimates concerning the amount of the liability or the probability of occurrence, maturity
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In particular an estimate of the probability of occurrence for provisions for losses to cover self-insured damage Some group entities secure themselves against and settle actual and expected cases of losses up to a specified amount of losses. If this amount is exceeded, other external insurance companies are involved. The provisions recognised in the financial year are based on estimates of future payments for the cases of losses reported as well as for the cases already incurred but not yet reported. The estimates are based on past experience and current claims. This experience is based both on the frequency of claims (number) and the amount of claims (costs) and is combined with expectations regarding individual claims in order to estimate the amounts recognised. The obligations to pay damages were calculated based on actuarial methods by an external expert. The amount of the provisions recognised is determined in particular by the actuarial parameters established, the amount of the individual claim and the date on which payments are due in connection with the claim. The provision covers individual losses as well as claims settlement expenses. •• Trade receivables Discernible risks have been taken into account by bad debt allowances measured on the basis of the probable credit risk, i.e. the risk of non-recognition. Bad debt allowances are recognised immediately when there is any indication that a receivable is not recoverable in full or in part. Indications of impairment include insolvency on the part of the debtor, longer outstanding amounts or notification by the debtor of payment difficulties. A distinction is made for example between receivables from health insurance companies and from individuals when calculating allowances. The specific bad debt allowance rates range up to 100 % (insolvency), depending on the maturity structure. The income adjustments after the end of the reporting period made based on examinations by the MDK are not recognised in the allowances for trade receivables. The MDK risk is covered by a provision. As of 31 December 2012, the carrying amount of the provisions was € 32,268k (prior year: € 29,228k).
Notes
V. Financial risk management 1) Financial risk management objectives and policies A financial instrument is a contract that gives rise to both a financial asset of one entity and a financial liability or equity of another entity. The Group has various financial assets, including above all cash and cash equivalents, trade receivables and other receivables, which arise directly from its operations. The financial liabilities reported by the Group essentially comprise trade payables, liabilities to banks and finance lease liabilities. The main purpose of these financial liabilities is to raise finance for the Group‘s operations. The main risks arising from the Company‘s financial instruments can be grouped into the following three risk clusters: liquidity and financing risks, interest fluctuation and capital market risks (market risk) and credit, counterparty and payment risks (default risks). Group-wide risk management focuses on the uncertainty of developments on financial markets and aims at minimising potential adverse effects on the financial position of the Group. Risk management is performed by management and complies with the policies issued by management. Management identifies, assesses and hedges financial risks in close cooperation with the operating units of the Group. Management determines the principles for cross-functional risk management and issues policies for specific areas including handling of interest and credit risk, the use of derivative and primary financial instruments as well as investment of liquidity surpluses.
2) Liquidity and financing risk Liquidity risks stem from a possible lack of financing to settle liabilities as they fall due in terms of volume and maturity. In particular the latter fact leads to the need to accept unfavourable financing conditions in the event of potential liquidity bottlenecks. The central task of the Group‘s financing and investor relations division is to control short-term liquidity risks and longer-term financing risks, and it employs a group-wide integrated cash management system for this purpose – with a focus on efficient control of short-term cash and cash equivalents. Prudent liquidity management involves holding an adequate reserve of liquid funds, the option of financing an adequate amount using the lines of credit obtained and the ability to issue suitable financial instruments on the market.
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Due to the dynamic nature of the business environment in which the Group operates, the aim of management is to ensure that financing remains as flexible as needed by securing sufficient lines of credit and constant access to capital markets. All credit agreements are complied with on an ongoing basis. The table below shows the maturities of liabilities based on minimum contractual obligations (without discounting). 31.12.2012 Total
Up to 12 months
1 to 5 years
Over 5 years
75
74.8
0.2
0
869
80
501
288
Finance leases
15
1
3
11
Other financial liabilities (excluding derivatives)
262
120
56
86
31.12.2011 Total
Up to 12 months
1 to 5 years
Over 5 years
Trade payables
74.3
74.1
0.2
0
Financial liabilities including profit participation and subordinated capital
in € m Trade payables Financial liabilities including profit participation and subordinated capital
in € m
802
176
299
327
Finance leases
16
1
3
12
Other financial liabilities (excluding derivatives)
291
129
60
102
The subordinated capital matures on a date that is dependent on contractually defined terms and conditions. As of the end of the reporting period, we assume that the majority will fall due within up to five years.
Notes
3) Credit, counterparty and payment risk (default risk) Credit and counterparty risks result if a customer or another counterparty to a financial instrument fails to meet its contractual obligations in terms of due dates and del credere. Asklepios is exposed to only a low level of risk from an unexpected loss of cash or income. Firstly, financial contracts are entered into only selectively and are distributed over a broad group of banks with a good credit rating. The cash investment policy, which is mainly short term, follows the principle of ‚security over yield‘ and spreads excess group liquidity across different banks from the three major German deposit protection systems with a limit for each individual institution. Secondly, Asklepios has a low del credere risk thanks to the high share of debtors that are German (statutory) health insurance companies, supplemented with a smaller share of public welfare authorities and some private patients. By contrast, the growing influence of the economic crisis on the earnings situation of the social insurance schemes results in the risk of delayed payment of trade receivables, which in turn leads to a danger of more capital being tied up in current assets. There is also a risk that individual receivables will not be recognised by the MDK. As a result, provisions are recognised for bad debts that are measured by the management on the basis of the past experience. The income adjustments after the end of the reporting period made based on examinations by the MDK are not recognised in the allowances for trade receivables. The MDK risk is covered by a provision. Bad debt allowances are recognised immediately when there is any indication that a receivable is not recoverable in full or in part. As in the prior year, there are no significant concentrations of risk as of 31 December 2012. With respect to the other financial assets carried by the Group, the maximum exposure to credit risk arising from default of the counterparty is equal to the carrying amount of the corresponding instrument. For all payment transactions processed using an automated payment management system, at the very least the principle of dual control applies. The conclusion of financial contracts is also regulated in a volume-weighted approval catalogue.
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4) Market risk Market risk is the risk of a loss that may be incurred as a result of a change in market parameters that are relevant for measurement (currency, interest, price). Fluctuations in market interest rates affect future interest payments for floating-interest liabilities. Material increases in the base interest rate or the bank margin can therefore restrict the Group‘s profitability, liquidity and financial position. The same applies to the foreign currency risks, which are very limited. The Group controls these risks centrally – also using derivative financial instruments – on the basis of a group-wide manual that contains definitions of responsibilities for the identification of risks, for the conclusion of hedges and for regular reporting. The conclusion of transactions for trading or speculative purposes is prohibited. If the euro exchange rate were to increase or decrease by 1 %, earnings before income taxes would change only marginally in the financial year and in the prior year.
5) Presentation of the interest risks to which Asklepios is exposed Interest rate sensitivities The credit volumes are hedged against interest fluctuation risks, some of which in the long term. The Company uses cash flow hedges to hedge against the risk of increasing interest from long-term liabilities subject to floating rates of interest on the basis of interest caps with appropriate repayment and maturities. Their purpose is to hedge the cash flow interest rate risk arising from the Company‘s operations and its sources of finance. For further details on the hedging instruments used, please refer to the notes on the derivative financial instruments. Only the intrinsic value of the interest cap is designated as the hedging instrument in each case, with recognition at fair value through profit or loss.
6) Cash flow interest rate risk In the case of fixed-rate financial liabilities (subordinated loans, subsidised loans and participation capital), the operating cash flow and Group profit are largely unaffected by changes in the market interest rate. However, the Group is exposed to a cash flow interest rate risk relating to liabilities subject to floating rates of interest. These risks are hedged by the Group using interest rate hedges. The Group is for the most part not exposed to any interest rate risk in this respect.
Notes
The interest rate risk is presented using sensitivity analyses in accordance with IFRS 7. These present the effects of changes in market interest rates on interest income and expenses, other components of profit or loss and on equity. There is no interest rate risk within the meaning of IFRS 7 for financial instruments that are subject to fixed interest rates and measured at amortised cost. The Group uses cash flow hedges to secure liabilities that are subject to floating rates of interest. These affect both the hedge reserve in other comprehensive income and net interest and are therefore included in the sensitivity analysis. As the closing balance of cash and cash equivalents is not reliable for calculating interest sensitivities, the average balance was used. The average balance was taken to be the arithmetic mean of the opening and closing balances. in € k Floating: Interest level
31.12.2012
31.12.2011
+ 100 basis points
- 100 basis points
+ 100 basis points
- 100 basis points
-3,475
+3,586
-1,717
+1,717
Earnings before taxes
7) Capital management The primary objective of the Group‘s capital management is to ensure that it maintains a strong credit rating and healthy equity ratio in order to support its business operations. As of 31 December 2011, the equity ratio increased to 32.2 % (prior year: 31.2 %). The Company monitors its capital with reference to the ratio of net debt to EBITDA (debt ratio). This performance indicator has continued to improve. According to internal guidelines, this ratio should be limited to 3.5x. The financing strategy of the Group as a whole is guided primarily by the net debt / EBITDA ratio.
123
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The following table illustrates how this performance indicator was calculated in the period under review: in € m
2012
2011
Financial liabilities (excluding subordinated capital)
652.9
499.9
Cash and cash equivalents
145.9
182.6
Excluding subordinated capital
Net liabilities (excluding subordinated capital)
507.0
317.3
EBITDA
267.2
215.9
1.9x
1.5x
Net debt / EBITDA
This means that, at 1.9x (prior year: 1.5x), this indicator is well within the stipulated range in the financial year. Even taking into account subordinated capital, the indicator amounted to 2.3x (prior year: 2.3x): in € m
2012
2011
Including subordinated capital Financial liabilities (including subordinated capital)
771.3
681.6
Cash and cash equivalents
145.9
182.6
Net liabilities (including subordinated capital)
625.4
499.0
EBITDA
267.2
215.9
2.3x
2.3x
Net debt / EBITDA
Compared with German industry as a whole and the relevant competitors within the industry, this leverage can be considered very positive. Furthermore, the interest coverage factor (including interest on participation capital) stands at 8.9x (prior year: 7.4x). As of the end of the reporting period, AKG has cash reserves of € 145.9m (prior year: € 182.6m) in the form of cash and cash equivalents and undrawn lines of credit for a further € 209m (prior year: € 378m).
Notes
VI. N otes on items of the consolidated statement of financial position 1) Business combinations using the purchase method Acquisitions 2012 In the financial year 2012, no acquisitions were made using the purchase method.
Acquisitions 2011 With effect from 1 September 2011, a further 18.01 % of shares in MediClin AG, Offenburg, were acquired, meaning that we held a 52.73 % stake as of 31 December 2011. MediClin AG is a nationwide clinic operator and a major provider of services in the areas of neuroscience, psychological science and orthopaedics. With 34 clinics, seven care facilities and eleven medical centres in eleven federal states in Germany, MediClin AG has a total capacity of around 8,000 beds. Its clinics are standard care and maximum care acute-care clinics and specialist clinics for medical rehabilitation. Around 8,200 employees work for MediClin AG. With this acquisition, we have undertaken to strengthen our position on the German hospital market. We also consolidated Asklepios Gesundheitszentrum Aidenbach (formerly Geriatrisches Rehabilitations- und Pflegezentrum Aidenbach GmbH & Co. Betriebs-KG, Aidenbach), over which we gained control on 1 May 2011. We own 100 % of this facility. This health centre focuses on geriatric rehabilitation and outpatient treatment. The nursing home and respite care are also a key focus. This acquisition is not significant to the Group and is therefore presented in summarised form together with the acquisition of MediClin AG.
Remeasurement of assets and liabilities acquired in 2011 on the acquisition date The starting point is a systematic identification process in which all potential assets and hidden liabilities that have not yet been recognised are reviewed for their eligibility to be reported on the balance sheet within the context of the purchase price allocation on the basis of due diligence. An estimate of the fair values of all identified assets and liabilities is also required. For this purpose, the assets and liabilities of the companies acquired take the place of the purchase cost recognised as the carrying amount of the investment in the financial statements of AKG (imputed individual acquisition). Within the context of the application of the purchase method, only those identifiable assets acquired and liabilities assumed that comply with the definitions of assets and liabilities given in the IFRS framework at the time of acquisition may be recognised (IFRS 3.11).
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If the purchaser applies the recognition principle and the recognition conditions, some assets and liabilities may be recognised in this process which the acquired company had not previously recognised as assets and liabilities in its financial statements (IFRS 3.13). This may lead to the recognition of specific acquired assets and assumed liabilities. Specific acquired assets are specifically identifiable intangible assets. The identifiable assets acquired and the liabilities assumed are measured at fair value on the date of acquisition (IFRS 3.18). The fair values of identifiable assets and liabilities of the companies acquired break down as follows as of the acquisition date:
in € k
Fair value on the acquisition date
Assets Non-current assets
282,632
Cash and cash equivalents
43,000
Current assets
77,550
Total assets
403,182
Equity and liabilities Non-current liabilities
264,033
Current liabilities
190,245
Total equity and liabilities
454,278
Non-controlling interests measured at fair value (measured at the moving average for the official market value)
84,874
Consideration
99,840
Non-current assets are mainly property, plant and equipment, while current assets constitute trade receivables. Non-current and current liabilities include mostly provisions. The purchase method stipulates that the acquirer recognises all acquired intangible assets separately. This applies irrespective of whether or not the intangible assets had already been recognised in the financial statements of the acquired company prior to the business combination. Specific acquired assets are specifically identifiable intangible assets. For
Notes
example, this may be a brand name, portfolio of customers or internally developed software. Within the context of purchase price allocation, we have specifically identified brand names, customer relationships with an existing network of referring physicians and internally developed software (€ 32m) in the area of intangible assets. In terms of immovable and movable property, plant and equipment, we have recognised fair values that are different from those values recognised up to now by the acquired companies (€ 199m). As regards liabilities, any hidden liabilities present or liabilities or provisions that have not been accounted for to date are to be recognised and measured where necessary. Hidden liabilities arise if the market value of a liability is more than the recognised nominal amount or settlement value. Here, the conditions of a liability should be checked against current market values (interest rates), for example. As part of the company acquisitions, we have recognised provisions with a fair value of € 282m, in particular for non-market rental and lease obligations and maintenance obligations that have not yet been completely fulfilled, and other financial liabilities and other liabilities including deferred taxes with a fair value of € 47m. Furthermore, the acquirer must recognise contingent liabilities as an exception to the recognition principle (IFRS 3.23). In contrast to the requirements of IAS 37, the acquirer must recognise a contingent liability assumed as part of a business combination on the date of acquisition if this is a present obligation that has resulted from earlier events and whose fair value can be reliably determined. The contingent liability is recognised even if it is unlikely that an outflow of resources embodying economic benefits will be required to settle the obligation. A contingent liability may be a guarantee or the assumption of liability. We have recognised a contingent liability in the amount of € 21m as part of the company acquisitions. Within the context of purchase price allocation, we have assigned a different fair value for items including liabilities to banks that were contractually agreed in the past and for which the conditions negotiated at that time will continue to apply, based on more up-todate market conditions. Pension obligations were also assumed as part of the business combinations. These pension obligations are the result of defined benefit pension plans and are recognised according to the projected unit credit method, taking into consideration future trends in salaries and pensions as well as current biometric probabilities in accordance with IAS 19. Until now, actuarial gains and losses within the context of the acquired companies have been recognised using the corridor method. As part of the business combination, we have recognised the actuarial gains and losses within the context of remeasurement. We have also examined permanent obligations with regard to current market conditions. Here, we examined areas including rental obligations consisting of pure rental obligations
127
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and maintenance obligations that have not yet been completely fulfilled, and recognised these at fair value. Goodwill in the amount of € 236m also resulted from the company acquisitions. This primarily reflects the expected future earnings power that will arise as a result of utilising synergy effects with the newly acquired facilities. This includes in particular a larger share of the healthcare market which will allow considerable synergies to be achieved. It is assumed that the goodwill is not tax deductible. The goodwill is calculated using the full goodwill method, according to which the entire goodwill of the company acquired, including the part attributable to non-controlling interests, is to be recognised. With regard to income taxes, the acquirer must recognise and measure a deferred tax asset or a deferred tax liability from assets acquired and liabilities assumed during a business combination in accordance with IAS 12 (IFRS 3.24). In particular, potential tax effects arising from the temporary differences and loss carryforwards of an acquired company that already exist at the date of acquisition or come into being as a result of the acquisition must be accounted for in accordance with IAS 12 (IFRS 3.24). Both deferred tax assets and deferred tax liabilities are the result of the assets and liabilities recognised as part of the business combinations or of the differing measurement in accordance with IFRS 3. The consideration for the shares acquired, provided that there is no active market, is calculated on the basis of cost. In the event that an investment previously accounted for using the equity method is now to be consolidated in full, the results undistributed within the context of accounting to date also count towards the cost. In the event that there is an active market, the moving average price traded on the stock exchange for the company acquired has been used. In accordance with IFRS 3.42, this gave rise to a result of € 1.5m, which was reported within the investment result. The fair value of the equity interest in the acquired companies was € 62m before the date of acquisition. There were outflows of cash in the amount of € 95m in connection with the business combinations due to the gradual company acquisition over several years. The fair value of trade receivables totals € 57.0m. The gross amount of trade receivables totals € 60.0m. Specific bad debt allowances calculated on a flat-rate basis have been recognised for doubtful trade receivables; it is likely that the total defined amounts will be collected.
Notes
Since the date of acquisition, the company acquisitions had an impact of € 174m on revenue and € 9.2m on group earnings before income taxes. If the business combinations had taken place at the start of the year, revenue would have totalled € 2.9b and group earnings before income taxes € 56.3m.
2) Goodwill and other intangible assets
Goodwill
Other intangible assets
Prepayments for intangible assets
Total
Cost As of 1.1.2012
352,998
70,488
5,207
428,693
Changes in the consolidated group
1,058
39
0
1,097
Additions/ investments similar to acquisitions
2012 in € k
8,484
3,924
2,055
14,463
Disposals
0
-476
0
-476
Reclassification
0
421
-349
72
As of 31.12.2012
362,540
74,396
6,913
443,849
Accumulated depreciation and impairment As of 1.01.2012
-15,565
-29,918
0
-45,483
Changes in the consolidated group
0
-6
0
-6
Depreciation and impairment for the financial year
0
-8,361
0
-8,361
Write-downs on disposals
0
430
0
430
As of 31.12.2012
-15,565
-37,855
0
-53,420
Residual carrying amounts As of 31.12.2012
346,975
36,541
6,913
390,429
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Asklepios annual report 2012
Goodwill
Other intangible assets
Prepayments for intangible assets
Total
Cost As of 1.01.2011
116,044
34,639
1,831
152,514
Changes in the consolidated group
235,805
31,910
-1,450
266,265
1,174
4,300
5,031
10,505
-25
-723
0
-748
0
362
-205
157
As of 31.12.2011
352,998
70,488
5,207
428,693
Accumulated depreciation and impairment As of 1.01.2011
-15,565
-24,377
0
-39,942
0
-6,023
0
-6,023
2011 in € k
Additions/ investments similar to acquisitions Disposals Reclassification
Depreciation and impairment for the financial year Write-downs on disposals
0
482
0
482
As of 31.12.2011
-15,565
-29,918
0
-45,483
Residual carrying amounts As of 31.12.2011
337,433
40,570
5,207
383,210
Notes
In detail, the goodwill reported by AKG relates to: Goodwill in € k
2012
2011
234,085
234,085
Asklepios Kliniken Hamburg Gesellschaft mit beschränkter Haftung, Hamburg
37,776
37,776
Asklepios Fachkliniken Brandenburg GmbH, Brandenburg
MediClin AG, Offenburg
27,486
27,486
Asklepios Klinikum Uckermark GmbH, Schwedt
9,754
9,638
Asklepios MVZ Nord und Schleswig-Holstein GmbH, Hamburg
6,895
5,237
Asklepios Klinik Sobernheim GmbH, Königstein
6,423
0
Pro Cura Med AG, Bern (Schweiz)
4,908
4,908
Asklepios Klinik Eimsbüttel, GmbH, Hamburg
4,542
4,542
Reha-Klinik Schildautal Investgesellschaft mbH, Königstein
2,273
2,273
Asklepios Gesundheitszentrum Aidenbach, Königstein
1,695
1,695
Fachklinik Helmsweg GmbH, Hamburg
1,658
1,658
Asklepios Klinik Wiesbaden GmbH, Königstein, Klinik Birkenwerder
1,155
1,155
Other
8,325
6,980
Total
346,975
337,433
The addition to goodwill is the result of practice goodwill acquired and already recognised in the separate financial statements. The recoverability of all goodwill included in the consolidated statement of financial position and allocable to cash-generating units was substantiated via its value in use. No impairment losses were necessary in the reporting period. The sensitivity analysis carried out assumed a change in the pre-tax discount rate of + 0.5 % or - 0.5 %. In addition, EBIT was changed 5 % higher or lower than the current assumption. No matter what the configuration, goodwill will not need to be written down. Software, customer bases and brand names are all reported under other intangible assets.
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3) Property, plant and equipment Property, plant and equipment Land and buildings including buildings on third-party land
Plant and machinery
Operating and office equipment
Assets under construction
Finance lease property, plant and equipment
Total
Cost As of 1.1.2012
1,327,595
77,410
322,827
44,219
1,359
1,773,410
Changes in the consolidated group
0
0
234
0
0
234
23,077
8,644
52,205
61,723
0
145,649
-7,905
-4,715
-10,064
-3,296
0
-25,980
2012 in € k
Additions/ investments similar to acquisitions Disposals Reclassification
25,127
2,655
4,964
-32,818
0
-72
As of 31.12.2012
1,367,894
83,994
370,166
69,828
1,359
1,893,241
Accumulated depreciation and impairment As of 1.1.2012
-335,068
-34,015
-160,322
0
-114
-529,519
0
0
-57
0
0
-57
-42,175
-6,825
-46,008
0
-29
-95,037
Changes in the consolidated group Depreciation and impairment for the financial year Write-downs on disposals
600
4,567
9,080
0
0
14,247
As of 31.12.2012
-376,643
-36,273
-197,307
0
-143
-610,366
Residual carrying amounts As of 31.12.2012
991,251
47,721
172,859
69,828
1,216
1,282,875
Notes
Land and buildings including buildings on third-party land
Plant and machinery
Operating and office equipment
Assets under construction
Finance lease property, plant and equipment
Total
Cost As of 1.1.2011
1,132,735
62,923
254,098
38,643
1,359
1,489,758
Changes in the consolidated group
146,650
9,891
42,182
3,650
0
202,373
Additions/ investments similar to acquisitions
25,416
2,794
36,743
42,433
0
107,386
Disposals
-6,129
-721
-15,511
-3,589
0
-25,950
2011 in € k
Reclassification
28,923
2,523
5,315
-36,918
0
-157
As of 31.12.2011
1,327,595
77,410
322,827
44,219
1,359
1,773,410
Kumulierte Abschreibungen Stand 1.1.2011
-300,993
-29,527
-138,137
-8
-85
-468,750
-37,171
-5,194
-33,356
0
-29
-75,749
Changes in the consolidated group Depreciation and impairment for the financial year
3,096
706
11,170
8
0
14,980
As of 31.12.2011
-335,068
-34,015
-160,322
0
-114
-529,519
Residual carrying amounts As of 31.12.2011
992,527
43,395
162,505
44,219
1,245
1,243,891
Furthermore, there are also rental and lease agreements for real property, medical equipment and office equipment, which are classified as operating leases. The rental and lease expenses incurred are reported under other operating expenses. Amounts recognised as finance leases under buildings and buildings on third-party land total € 55.4m (prior year: € 58.2m). Amounts from finance leases in plant and machinery under property, plant and equipment total € 2.1m (prior year: € 2.0m). Properties subject to long-term rental are recognised as finance leases in the amount of € 12.4m (prior year: € 12.9m).
133
13 4
Asklepios annual report 2012
Receivables and government grants for financing investments are deducted from the cost of the assets and therefore reduce current depreciation. These were grants earmarked for specific investments in accordance with the KHG [“Krankenhausfinanzierungsgesetz”: German Hospital Financing Act] with a residual carrying amount of € 1,144.3m (prior year: € 1,149.3m) as well as other government grants and third-party grants with a residual carrying amount of € 145.8m (prior year: € 152.3m). Grants issued in accordance with the KHG are repaid only in the event that hospital operations are discontinued in accordance with Sec. 8 (1) KHG (no longer included in the hospital plan). Thus, total grants of € 1,290.1m (prior year: € 1,301.6m) are permanently available to the Company interest-free and redemption-free. Write-downs after reduction due to income from the reversal of special items of € 89.5m (prior year: € 92.4m) amount to € 103.4m (prior year: € 81.8m).
4) Investments accounted for using the equity method Shares developed as follows: in € k Beginning of the year
31.12.2012
31.12.2011
1,922
98,391
Purchase of further shares (net)
0
47,935
Transition to IAS 27 full consolidation
0
-94,696
Impairment
0
-51,252
Investment result
0
2,369
Dividend payment in the current year
0
-825
1,922
1,922
End of the year
The market capitalisation of the shares, for which a publicly quoted market price exists, is € 22.1m.
Notes
The shares of the assets, liabilities, selected revenue and expenses of the entities accounted for using the equity method as of 31 December 2012 and 2011 respectively that can be allocated to the Group are as follows: in € k Current assets Non-current assets
31.12.2012
31.12.2011
2,738
2,710
848
901
1,130
1,348
0
0
1.1. – 31.12.2012
1.1. – 31.12.2011
6,293
6,413
Personnel expenses
-4,049
-3,990
Cost of materials
-1,608
-1,860
-48
10
Current liabilities Non-current liabilities
Revenue
Financial result
135
136
Asklepios annual report 2012
5) Other financial assets Other financial assets break down as follows: in € k
31.12.2012
31.12.2011
107,016
0
Receivables from grants
81,471
85,718
Derivatives
43,247
0
Receivables pursuant to the BPflV and KHEntgG
23,170
12,821
Receivables pursuant to the KHG
18,792
19,120
Receivables from trustors
13,132
5,603
Receivables from insolvency insurance for special German phased retirement / employer’s pension liability insurance
7,680
7,845
Investments
2,546
2,332
Receivables from loans granted
1,673
8,321
Receivables from employees
Securities
1,234
1,311
Receivables from supplier bonuses
890
1,278
Receivables from sponsors / third-party funds
858
710
Receivable from Landeskrankenhausgesellschaft
841
575
Receivables from KV [“Kassenärztliche Vereinigung”: Association of Statutory Health Insurance Doctors]
736
832
Receivables from the tax authorities / social security schemes
721
957
Receivables from security deposits
715
654
Receivables from state
690
675
Investee receivables
621
589
Receivables from the city of Hamburg
543
234
Receivables from OIK
433
919
Receivables from the Employment Agency
368
478
Receivables from insurance
290
2,568
Receivables from energy services
271
1,171
Receivables from government grants
203
887
Receivables from former payers
0
4,626
5,023
3,848
Other financial assets
313,275
164,493
of which non-current
241,121
98,575
72,154
65,918
Sundry assets
of which current
Notes
With respect to securities and derivatives, please refer to our explanations under IV. 10d) Derivative financial instruments. Investments include companies in which AKG has a shareholding of between 20 % and 50 %. These are not consolidated and are accounted for at cost. Receivables from grants to finance a hospital in Hamburg are counterbalanced by a loan obligation. This obligation is reported under other financial liabilities (note 16). Receivables pursuant to the KHG relate to outstanding claims to state subsidies. Receivables pursuant to the BPflV and KHEntgG relate to compensation claims. By netting the receivables pursuant to the KHG with the corresponding liabilities at the level of the German federal state, receivables of € 18,792k remained at Group level (prior year: € 19,120k). These are counter-balanced by liabilities of € 32,100k (prior year: € 27,783k). Under the KHG, the Company discloses total gross liabilities of € 136,176k (prior year: € 166,798k). The amounts reported under receivables from former payers in the previous year related primarily to a restructuring subsidy that was due to be paid out in the financial year. Other financial assets were impaired in the amount of € 8,559k as of the end of the reporting period (prior year: € 7,198k). In financial year 2012, a total of € 1,014k attributable to the ‘loans and receivables’ measurement category was recognised in profit or loss.
6) Inventories Inventories break down as follows: in € k
31.12.2012
31.12.2011
Materials and supplies
43,112
41,782
Inpatients (work in process)
42,813
38,878
Finished goods and merchandise Total
1,447
1,150
87,372
81,810
Materials and supplies include mainly medical supplies. Work in process relates mainly to the cut-off of DRG inpatients as of the end of the reporting period. No impairment was recognised in the financial year (prior year: € 109k).
137
138
Asklepios annual report 2012
7) Trade receivables in € k
31.12.2012
31.12.2011
Gross receivables
391,587
370,154
Less impairment
-27,549
-26,518
Net receivables
364,038
343,636
870
420
363,168
343,216
of which non-current receivables of which current receivables
Trade receivables are valued at amortised cost. An amount of € 363,168k (prior year: € 343,216k) falls due in less than one year.
in € k
Carrying amount
of which: neither impaired nor past due as of the end of the reporting period
of which: not impaired as of end of the reporting period, but past due by Less than 30 days
Between 30 and 60 days
Between 61 and 90 days
Between 91 and 180 days
Between 181 and 360 days
More than 360 days
274,521
42,592
9,617
5,902
7,965
7,527
15,914
270,502
36,212
7,884
4,180
6,446
8,230
10,182
as of 31.12.2012 Trade receivables
364,038 as of 31.12.2011
Trade receivables
343,636
With respect to the trade receivables that were neither impaired nor past due, there was no indication as of the reporting date that the debtors would fail to meet their payment obligations. Impairment of trade receivables totalled € 27.5m (prior year: € 26.5m), whereby trade receivables in the amount of € 4.9m (prior year: € 6.1m) were charged off to expenditure during the financial year. Therefore, in financial year 2012, a total of € 5.9m (prior year: € 6.4m) attributable to the ‘loans and receivables’ measurement category was recognised in profit or loss.
Notes
8) Income tax assets (non-current and current) Non-current income tax assets relate mainly to discounted receivables from the payment of residual corporate tax credit that arose due to the change from the imputation system to the half-income system. The corporate tax credit is being paid over a disbursement period of 2009 to 2017. A discount rate of 4.25 % was applied, as in the previous year. Current income tax assets relate to corporate tax reimbursement claims against tax authorities.
9) Other assets Other assets break down as follows: in € k
31.12.2012
31.12.2011
Receivables from other taxes
161
344
Payments on account
493
237
Other
4,497
3,871
Other assets
5,151
4,452
84
49
5,067
4,403
of which non-current of which current
10) Cash and short-term deposits Cash and short-term deposits are subject to floating interest rates. Short-term deposits are made for different periods of time depending on the Group’s liquidity requirements. These are subject to interest at the respective interest rates applicable for short-term deposits. The fair value of cash and cash equivalents corresponds to their carrying amount. Cash and short-term deposits include grants received. Pursuant to IAS 20, the interest accrued on these grants is offset against the corresponding expenses from the increase in liabilities pursuant to the KHG. The grants are earmarked and can be used for subsidised investments only.
139
140
Asklepios annual report 2012
11) Available-for-sale assets The item reported in the previous year was a developed residential property for letting, which was sold in the reporting period. It was recognised at indicative land value.
12) Equity According to IAS 1 (rev. 2011), the development of equity is presented in a statement of changes in Group equity, which is a separate component of the consolidated financial statements. in € k
31.12.2012
31.12.2011
Equity attributable to the parent company
645,309
574,064
Non-controlling interests
206,218
192,917
Total equity according to the statement of financial position
851,527
766,981
a) Components of equity For the composition of equity, we refer to the separate consolidated statement of changes in Group equity.
ba) Issued capital
The issued capital corresponds to the liable capital of the parent under company law. It has been paid in full.
bb) Reserves
Reserves include revenue reserves and the fair value reserve. Revenue reserves consist of the retained profit of the previous year. The Company has applied IAS 19 (rev. 2011) since 1 January with retroactive effect for the financial year 2011. As of 31 December 2011, the retroactive application resulted in a € 2,026k increase of the revenue reserves (1 January 2011: increase of € 4,009k). In the financial year 2012, a total of € 16,297k (prior year: € 72,893k) was allocated to the revenue reserves.
Notes
The fair value reserve changed by € -1,691k in the financial year, with a balance of € -2,355k as of 31 December 2012 (prior year: € -664k). The change in the fair value of cash flow hedges (31 December 2012: € -1,397k; 31 December 2011: € -664k) and the measurement of financial assets (31 December 2012: € -958k; 31 December 2011: T€ 0) are recognised in this reserve.
bc) Non-controlling interests
The non-controlling interests contain third-party shares in the equity of consolidated subsidiaries. Non-controlling interests of approximately 6 % are attributable to the entities that operate clinics. We refer to IV.1 - Basis of consolidation- of the notes to the consolidated financial statements. € 22,528k of the consolidated net income for the year is attributable to non-controlling interests (prior year: € 19,436k).
13) Participation capital and other subordinated capital The Group has issued participation certificates with an average term to maturity of around nine years. These are subordinated to all non-subordinated creditors but have the same standing as other participation certificate holders and rank above the shareholders, including shareholder loans made in lieu of equity. The holder of the participation certificates can change the interest rate for a portion of the participation capital if certain key financial covenants are not complied with subject to the form of a key financial covenant. € 30.4m of participation capital is subject to a floating rate of interest. It is subject to nominal and effective interest within a range of 4.2 % to 7.3 %. The fixed-rate portion of the participation capital / subordinated capital with a carrying amount of € 47m has a fair value of € 50.7m. Participation certificates of € 43.2m were repaid in the financial year. The other subordinated capital includes a subordinated loan of the seller of AKHH amounting to € 16.1m (prior year: € 26.1m). The € 10.0m decrease on the prior year is the result of scheduled repayments.
141
142
Asklepios annual report 2012
Other subordinated capital also includes a subordinated shareholder loan of the seller of AKHH. The seller of AKHH agreed to grant AKHH a shareholder loan on the request of the buyer (one of our Group entities). € 10m of this was likewise repaid on schedule. The contractual payments without discounting are disclosed in the notes under 14) Financial liabilities.
14) Financial liabilities in € k
31.12.2012
31.12.2011
35,949
96,647
Non-current portion
616,986
403,300
Total financial liabilities
652,935
499,947
Current portion
A total of € 85.3m was repaid during the financial year. The decrease in the current portion of financial liabilities is the result of a loan of MediClin AG, which was repaid by means of long-term finance in early 2012. The maturity structure has improved in this respect. Non-current financial liabilities include a fixed-rate capital market bond with a volume of € 150m. The bond expires on 28 September 2017 and has a coupon of 4.0 %. The interest is paid in arrears on an annual basis as at 28 September each year. Other financial liabilities are generally subject to floating interest rates. These vary between 0.8 % and 6.5 % and are based on capital market rates (Euribor). The financial liabilities subject to floating interest rates usually have fixed-interest periods of between one and three months. The redemption payments are essentially in line with the fixed-interest terms. € 211.7m (prior year: € 243.1m) of the financial liabilities is secured, largely by land charges. The non-subsidised portion of a loan from the financing of a new build with a carrying amount of € 43.1m (prior year: € 45.3m) as of 31 December 2012 had a fair value of € 53.1m (prior year: € 46.3m) on the same date.
Notes
Of the non-current financial liabilities, the following amounts fall due in the next few years: Financial year
in € m
2014
238.4
2015
58.0
2016
20.3
2017
42.5
Subsequent years
257.8
Total
617.0
The future payments from financial liabilities, participation certificates and subordinated capital as well as the interest and instalment components included therein break down as follows: 31 December 2012 Remaining term €m
Less than 1 year
Between 1 and 5 years
More than 5 years
Total
80
501
288
869
Less than 1 year
Between 1 and 5 years
More than 5 years
Total
176
299
327
802
Minimum obligation
31 December 2011 Remaining term €m Minimum obligation
Credit facilities The Group has undrawn lines of credit of € 209m as of the end of the reporting period (prior year: € 378m). Of this, € 94.4m (prior year: € 96m) is secured by land charges. Drawings on these credit lines are subject to floating interest.
15) Trade payables There are trade payables due to third parties. An amount of € 74,809k (prior year: € 74,122k) falls due in less than one year.
14 3
14 4
Asklepios annual report 2012
16) Other financial liabilities Other financial liabilities comprise: in € k Subsidised loans
31.12.2012
31.12.2011
107,845
116,328
Liabilities from outstanding invoices
32,218
31,934
Liabilities pursuant to the KHG
32,100
27,783
Liabilities to public authorities
14,503
13,717
Purchase price commitments / liabilities to former payers
8,271
21,432
Liabilities for third-party obligations
7,150
10,087
Liabilities to shareholders
6,091
5,202
Investment subsidy liabilities
3,464
4,028
Liabilities from investment grants
2,039
2,156
Liabilities to Landeskrankenhausgesellschaft
2,013
1,960
Liabilities from interest caps (cash flow hedges)
1,660
789
Liabilities to senior consultants
1,536
1,587
Liabilities from interest cap
1,350
1,880
Liabilities to welfare fund
1,200
0
Liabilities from third-party funds
1,160
1,652
999
1,314
Liabilities to state authorities
779
1,169
Liabilities for social security
566
426
0
1,300
Liabilities to the pension guarantee association
Liabilities from put options Other financial liabilities
9,752
9,985
Other financial liabilities
234,696
254,729
of which non-current
119,790
130,634
of which current
114,906
124,095
The subsidised loans relate mainly to the financing of a hospital in Hamburg. The city of Hamburg provides two-thirds of the related debt servicing; the corresponding amount is reported under other liabilities. A corresponding receivable of € 81.5m (prior year: € 85.7m) from the city of Hamburg has been reported under other financial assets. € 7.7m (prior year: € 8.5m) of the subsidised loans is secured, largely by land charges.
Notes
The future payments from subsidised loans as well as the interest and instalment components included therein break down as follows: 31 December 2012 Remaining term €m
Less than 1 year
Between 1 and 5 years
More than 5 years
Total
13
48
77
138
Less than 1 year
Between 1 and 5 years
More than 5 years
Total
14
50
92
156
Minimum obligation 31 December 2011 Remaining term €m Minimum obligation
The interest component included in the minimum obligations amounts to € 31m (prior year: € 39m). With respect to the liabilities according to the KHG, please refer to the explanations under VI. 5) Other financial assets. The purchase price obligations comprise primarily obligations from a number of acquisitions. Liabilities for third-party obligations concern statutory obligations to perform maintenance and fire protection work. Liabilities from grants concern money for investments obtained from sponsors, etc. that has not been used yet.
145
146
Asklepios annual report 2012
17) Other liabilities Other liabilities comprise: in € k Personnel liabilities Tax liabilities (wage tax, VAT) Payments on account Other Other liabilities of which non-current of which current
31.12.2012
31.12.2011
157,180
141,091
29,094
28,972
9,436
7,153
11,518
14,872
207,228
192,088
14,148
13,349
193,080
178,739
Personnel liabilities relate mainly to obligations from performance-based compensation, obligations from accrued vacation and German phased retirement scheme liabilities. Personnel liabilities include termination benefits, especially in the form of German phased retirement scheme and severance obligations of € 23.1m (prior year: € 23.0m). The liabilities from phased retirement agreements of € 7.9k (prior year: € 10.9k) include the Group’s future obligations for the outstanding settlement amounts during the beneficiaries’ working phases and the top-up amounts to be accumulated on a pro-rata basis according to IAS 19 (rev. 2011). For unregulated cases, an estimate in line with the previous utilisation of similar contractual offers was applied. In the financial year 2012, the asset values for securing the outstanding settlement amount of € 4,412k (fair value) (prior year: € 5,599k) are offset against the obligations. Tax liabilities include the wage tax and VAT payable to the tax authorities. Other non-financial liabilities comprise mainly subsidies which can be paid to clinics, depending on their individual earnings situation.
18) Finance lease liabilities Assets for which the Group has concluded finance leases are reported in property, plant and equipment. For a sale-and-leaseback arrangement with a total volume of € 7.6m concluded in 2008, the lease payments for the first ten years are € 554k per year. Thereafter, they are provisionally calculated at € 621k. A financing rate of 5.85 % per year was applied for the first ten years. The interest rates will be renegotiated after the fixed interest period expires.
Notes
The leased property was transferred to non-current assets at the present value of the minimum lease payments of € 7.6m, with € 2.7m attributable to land and € 4.9m to the building. The net carrying amount at the end of the reporting period totalled € 7.0m (prior year: € 7.2m). The future payments from finance lease agreements as well as the interest and instalment components included therein break down as follows: 31 December 2012 Remaining term €k
Less than 1 year
Between 1 and 5 years
More than 5 years
Total
Minimum lease obligation
554
2,216
9,596
12,366
Financing costs
-414
-1,565
-3,262
-5,241
Present value of minimum leaseobligation (land, building)
140
651
6,334
7,125
Remaining term €k
Less than 1 year
Between 1 and 5 years
More than 5 years
Total
Minimum lease obligation
554
2,216
10,150
12,920
Financing costs
-422
-1,602
-3,639
-5,663
Present value of minimum leaseobligation (land, building)
132
614
6,511
7,257
31 December 2011
In addition, there are other leases for medical and technical equipment classified as finance leases. The leases have remaining terms of up to five years. The interest rates underlying the leases vary between 2.6 % and 7.7 % per year according to the date the contract was signed, term and lease volume. The net carrying amounts totalled € 2.1m as of the end of the reporting period (prior year: € 2.0m).
147
148
Asklepios annual report 2012
The future payments from finance lease agreements as well as the interest and instalment components included therein break down as follows: 31 December 2012 Remaining term €k
Less than 1 year
Between 1 and 5 years
More than 5 years
Total
Minimum lease obligation
431
1,198
1,446
3,075
Financing costs
-37
-53
-363
-453
Present value of minimum lease obligation (furniture and fixtures)
394
1,145
1,083
2,622
Remaining term €k
Less than 1 year
Between 1 and 5 years
More than 5 years
Total
Minimum lease obligation
249
735
2,430
3,414
Financing costs
-45
-57
-508
-610
Present value of minimum lease obligation (furniture and fixtures)
204
678
1,922
2,804
31 December 2011
There are also undiscounted obligations of € 490m, which are currently treated as operating leases in accordance with IAS 17. If accounting for leases is changed, as the IASB is currently discussing, they will have to be reclassified as finance leases.
19) Provisions for pensions and similar obligations Some employees were granted post-employment annuity payments under the Group’s pension scheme, which takes the form of defined contribution and defined benefit plans. The Group’s obligations cover both existing and future benefit claims.
Notes
Pension provisions for defined benefit plans are determined in accordance with IAS 19 (rev. 2011) on the basis of actuarial assumptions. In the financial years, the following parameters were applied: 2012
2011
Discount rate
4.25 %
5.00 %
Expected salary increases
2.00 %
3.00 %
Expected pension increases
1.00 %
1.00 %
Average employee turnover
0.00 %
0.00 %
The cost trends in the medical sector were not considered in the calculation of pension provisions on grounds of immateriality. The Group’s defined benefit pension obligations are orientated towards the Hamburg Act on Additional Retirement Pensions and the respective valid version of the bylaws of the Pension Institution of the Federal Republic and the Federal States (VBL) and are based on benefit guideline no. 1 of the collective agreement on the company pension scheme at Landesbetrieb Krankenhäuser (LBK Hamburg) – a public-law institution – dated 24 July 2000. These obligations are met by way of the reinsured welfare fund of LBK e.V. In addition, there are obligations to civil servants of the city of Hamburg on leave of absence and individual contractual obligations that are partially covered by employer’s pension liability insurance policies. For employees entitled to a pension at Asklepios Westklinikum Hamburg GmbH, acquired on 1 July 2008, there are benefit obligations funded by provisions in accordance with the bylaws of the VBL. The Hamburg Act on Additional Retirement Pensions allows for pension benefits on the basis of final salary. The corresponding present value of the obligations as of 31 December 2012 was € 261,507k (90 % of the total obligation). The benefit amount is calculated from years of service and pay according to the pay grade when pension payments begin. Pensions increase by 1 % per year. The present value of the obligation from defined contribution pensions commitments according to the bylaws of the VBL is € 24,134k (8 % of the total obligation). The annual contribution amount is determined by the pay subject to supplementary pension payments. The pension payments result from the actuarial annuitisation of the contributions. The current annuities are increased by 1 % each year. As the payable benefits are lifelong pension payments, there is a longevity risk, which is largely hedged by the concluded pension liability insurance policies. In addition, because the payable benefit depends on salary, there is a risk that the required payment to the employee will increase due to future salary increases. The Group bears this risk in full.
149
150
Asklepios annual report 2012
The 2005 G mortality tables published by Dr Klaus Heubeck were used as a biometric basis for calculation. The amount of the provision breaks down as follows: in € k Present value of benefit obligation from funded pension commitments Present value of unfunded benefit obligations funded by provisions Total present values of pension obligation Fair value of plan assets Effect of the asset limit as of 31 December Net provisions
31.12.2012
31.12.2011
275,651
241,442
65,935
58,238
341,586
299,680
-259,505
-248,234
0
5,071
82,081
56,517
In the financial years shown, there were no effects from the change in demographic assumptions, as these were unchanged year-on-year. The development is as follows: in € k Provision as of 1 January
31.12.2012
31.12.2011
56,517
23,889
Current service cost
4,448
4,713
Net interest cost / income
2,757
1,792
-2,059
-1,362
9
0
Benefits paid Experience adjustments Amounts assumed / transferred as of 1 September 2011 Employer contributions to plan assets
0
31,085
-11,030
-11,151
Actuarial losses from the change of financial assumptions
31,439
7,551
Provision as of 31 December
82,081
56,517
Notes
The present value of the pension obligations developed as follows: in € k
31.12.2012
31.12.2011
299,680
254,272
Service cost
4,448
4,713
Interest cost
14,743
13,839
Experience adjustments
-1,320
-9,410
Actuarial losses from the change of financial assumptions
34,003
11,583
Benefits paid
-9,968
-8,452
Amounts assumed / transferred as of 1 September
0
33,135
Present value of the obligation as of 31 December
341,586
299,680
Present value of the obligation as of 1 January
Of which unfunded benefit obligations funded by provisions
65,935
56,238
Present value of the funded benefit obligations
275,651
241,442
31.12.2012
31.12.2011
The fair value of plan assets developed as follows: in € k
248,234
240,779
Expected return on plan assets
Fair value of plan assets as of 1 January
11,985
12,047
Benefits paid
-7,909
-7,082
Remeasurement of plan assets
-3,835
-10,711
Employer contributions to plan assets
11,030
11,151
0
2,050
259,505
248,234
Amounts assumed / transferred as of 1 September Fair value of plan assets as of 31 December
If there is excess cover in the welfare fund, it is not economically usable, so it is not recognised as an asset. The effect of this asset limit developed as follows: in € k Effect of the asset limit as of 1 January Gain recognised in OCI Effect of the asset limit as of 31 December
31.12.2012
31.12.2011
-5,071
-10,396
5,071
5,325
0
-5,071
Plan assets exclusively comprise employer’s pension liability insurance concluded to cover the welfare fund obligations from benefit obligations.
151
152
Asklepios annual report 2012
€ 11,261k (prior year: € 11,730k) was contributed to the welfare fund in financial year 2012. The amount paid in to plan assets for financial year 2013 is expected to be comparable to 2012. For defined contribution pension commitments, contributions of € 4,178k (prior year: € 4,094k) were recognised as expense in financial year 2012. The sensitivity of the obligation in relation to the change in relevant actuarial assumptions is as follows: Relative change of the obligation Actuarial interest rate
-0.50 %
Increase of 8.49 %
Actuarial interest rate
+0.50 %
Decrease of 5.45 %
Income trend
-0.50 %
Decrease of 0.74 %
Income trend
+ 0.50 %
Increase of 0.79 %
The effects of sensitivity were determined by the same method as the obligation at the end of the year. As the pension adjustment is contractually fixed (1 % increase), this is not an influencing factor listed in the sensitivity analysis. Because of the existing employer’s pension liability insurance policies, biometric risk is largely not borne by the Group but rather by the insurer, meaning that there was no sensitivity analysis here either. The estimated payments from the pension provisions and plan assets are as follows: Financial year 2013
in € k 10,487
2014
11,243
2015
12,009
2016
12,819
2017
13,695
2018
14,770
2019
15,530
2020
16,341
2021
17,013
2022
17,761
Total
141,668
Notes
The estimated contributions to plan assets for 2013 amount to € 10,261k. Estimated benefit payments from pension provisions are € 1,379k. The annual benefit payment obligation arises from the insurance contracts concluded with the welfare funds. The weighted average duration of pension obligations is around 17 years. Multiemployer plans Since 1 January 2002, BVK Zusatzversorgung, Munich, has paid a benefit that arises if an annual amount of 4.00 % of an employee’s gross salary is paid in full into a funded scheme. The contributions are made exclusively by the employer. The size of the contribution depends on the employee’s pay subject to supplementary pension payments. In 2013, Asklepios is expecting a funding requirement for members of BVK Zusatzversorgung, Munich, of € 5.9m (2012: € 6.4m). For members of the Zusatzversorgungskasse der Gemeinden und Gemeindeverbände (supplementary pension fund for municipalities and municipal associations) in Darmstadt, Asklepios is expecting a funding requirement of € 3.2m (2012: € 3.0m). In 2011, BVK Zusatzversorgung, Munich, had 5,627 members (prior year: 5,587) and managed assets of € 14.0b (prior year: € 12.9b). In 2011, 647,118 compulsorily insured employees and 583,096 non-contributory insurance contracts were registered via these members. Company pensions are paid to 233,289 compulsorily insured employees. In the financial year, Asklepios registered 3,266 employees entitled to supplementary pension provision. The Zusatzversorgungskasse der Gemeinden und Gemeindeverbände in Darmstadt has more than 630 members. 83,800 compulsorily insured employees and 79,800 noncontributory insurance contracts were registered via these members. Company pensions are paid to 42,700 former employees and surviving dependants. In the financial year, Asklepios registered 1,024 employees entitled to supplementary pension provision. One of the Group’s clinics was a participating institution in the Pension Institution of the Federal Republic and the Federal States (VBL) in Karlsruhe. In the West accounting group, the VBL funds its benefits via a modified partial reserve pay-as-you-go system. The current coverage period spans the years 2008 to 2012. The contribution rate is measured so that that the contribution to be paid for the duration of the coverage period together with the other expected income and the available assets suffices to cover the expenditure during the coverage period and the following six months.
153
15 4
Asklepios annual report 2012
Since 1 January 2002, the contribution rate has been 7.86 % of the pay subject to supplementary pension payments. Of this, employers bear a share of 6.45 % and the employee 1.41 % of the pay subject to supplementary pension payments. In addition to the contribution, the VBL levies redevelopment charges on participating employers with compulsorily insured employees in the West accounting group. The flat redevelopment charges cover the additional financing requirements for the obligations arising up to the closure of the integrated scheme. What share of the redevelopment charge the individual employers have to bear depends on which pension liabilities and insured remuneration are attributable to them. The redevelopment charge currently averages around 2 % of the remuneration. The legal consequences of termination of VBL participation are stipulated in Section 23 of the VBL bylaws. The compulsory insurance ends. The VBL continues to honour the pension claims and entitlements incurred up to the end of the participation. As compensation, the withdrawing participant must pay an equivalent value. The funded portion of the pension claims and entitlements does not have to be compensated. The equivalent value extends to any bonus points granted in the year following the termination of the participation. The equivalent value is calculated according to actuarial principles as the present value of the current and future supplementary pension annuities. The bylaws explicitly name the following calculation parameters: •• An actuarial interest rate of 3.25 % during the eligibility period, •• An actuarial interest rate of 5.25 % while the pension is being drawn, •• A current rate of increase of current annuities of 1 % a year, •• An additional charge of 10 % on the equivalent value to cover possible future shortfalls, •• A 2 % administrative surcharge on the equivalent value, •• The payment of interest on the equivalent value payment from the end of the participation to the payment; the applicable interest rate is currently 5.25 %. With approximately 5,400 employers (federal government and states, around 1,700 municipal employers, approximately 80 social security providers and around 3,600 other employers), the VBL is the largest of 30 existing supplementary pension funds for the publicsector employees in Germany. It manages assets of around € 15.4b.
Notes
There is currently a total of approximately 1.84 million compulsorily insured employees and 2.45 million insured employees exempt from contributions at the VBL. Pension benefits are paid to approximately 1.2 million pensioners.
20) Other provisions Other provisions developed as follows in the financial year:
in € k
1.1.2012
Changes in the consolidated group
Contractual obligations
241,824
0
15,736
0
163
226,251
Compensation payments / loss adjustment
56,133
0
6,927
2,906
13,331
59,631
Health insurers
42,130
0
15,926
0
20,645
46,849
Litigation risks
5,484
0
946
0
1,698
6,236
Sundry other provisions
33,247
7
10,195
0
9,709
32,768
378,818
7
49,730
2,906
45,546
371,735
Total
Utilisation
Reversal
Additions
31.12.2012
Accrued interest is included in the additions column. If not stated, it is of minor importance. Provisions break down according to term as follows: in € k
31.12.2012
31.12.2011
Less than one year
135,220
137,746
More than one year
236,515
241,072
Other provisions, total
371,735
378,818
Contractual obligations involve mainly provisions recognised during initial consolidation (see VI.1.) which are likely to be utilised by 2028 for non-market rental obligations and the reduction of the maintenance backlog. € 16.0m is expected to be utilised in 2013 and approximately € 70.0m from 2014 to 2017.
155
156
Asklepios annual report 2012
The provisions for compensation payments / loss adjustment were calculated for medical liability damages based on actuarial methods by an external expert. The provision covers individual losses, incurred but not reported (IBNR) cases and claims settlement expenses. A market interest rate of 0.01 % - 2.32 % (prior year: 0.09 % - 2.98 %) with a matching term was used to discount the expected payments. Of these provisions, € 4.2m is expected to be utilised in 2013 and around € 39.0m from 2014 to 2017. The provisions for health insurance funds are set up to cover budget risks and provisions for risks of outstanding examinations by the MDK. Sundry other provisions relate to operating activities. The provisions are utilised steadily as in previous years and according to IAS 37 and IFRS 3.
21) Current income tax liabilities The current income tax liabilities of € 9,236k (prior year: € 9,984k) are for as yet unassessed corporate income tax and solidarity surcharge for the last financial year and the previous years and for other income tax liabilities resulting from the ongoing tax audit.
Notes
22) Deferred tax assets and liabilities Deferred tax assets and liabilities break down as follows: in € k
31.12.2012
31.12.2011
Contractual obligations
38,644
40,696
Provisions for pensions
8,788
4,736
Unused tax losses
1,342
245
331
350
5,354
3,015
54,459
49,042
-7,780
-2,941
46,679
46,101
34,517
34,523
1,220
1,294
Deferred tax assets
Leases Other Total deferred tax assets Offsetting Deferred tax assets reflected in the statement of financial position Deferred tax liabilities Variance in value of intangible assets and property, plant and equipment Replacement reserve Liabilities to banks Other Total deferred tax liabilities Offsetting Deferred tax liabilities reflected in the statement of financial position
24
54
877
1,189
36,638
37,060
-7,780
-2,941
28,858
34,119
Deferred tax assets are recognised on temporary differences and unused tax losses if there is reasonable assurance that they will be realised in the short term or there is a corresponding amount of deferred tax liabilities. For transactions and other events recognised directly in other comprehensive income, any deferred taxes are recognised in equity or in other comprehensive income, and not in the consolidated income statement. For 2012, this affected € 318k (prior year: € 125k) of deferred tax assets recognised in other comprehensive income due to temporary differences in the measurement of financial assets and fair values of cash flow hedges. Another € 4,977k (prior year: € 1,195k) of deferred tax assets was recognised in other comprehensive income due to temporary differences in provisions for pensions. In the financial year 2012, no deferred tax assets were recognised on unused tax losses for corporate income tax purposes of € 53,761k (prior year: € 53,226k) and for commercial tax purposes of € 8,278k (prior year: € 8,854k), because it is unlikely that sufficient tax income
157
158
Asklepios annual report 2012
will be generated for these amounts in the near future. € 840k of deferred tax assets were recognised for unused commercial tax losses of € 89,326k. No deferred tax liabilities were recognised for temporary differences in connection with shares in subsidiaries amounting to € 7,551k (prior year: € 3,417k), because the differences are not expected to be reversed in the near future.
23) Additional information on financial instruments Fair value Carrying amount in € k
Fair value
31.12.2012
31.12.2011
31.12.2012
31.12.2011
Financial assets
823,258
690,689
823,258
690,689
Trade receivables
364,038
343,636
364,038
343,636
Other financial assets
313,275
164,493
313,275
164,493
Cash and cash equivalents
145,945
182,560
145,945
182,560
1,090,806
1,020,702
1,112,377
1,016,766
75,033
74,340
75,033
74,340
652,935
499,947
661,518
500,889
9,747
10,061
9,747
10,061
Other financial liabilities
234,696
254,729
253,771
256,512
Participation capital / subordinated loans
118,395
181,625
122,055
185,025
Financial liabilities Trade payables Financial liabilities Finance lease liabilities
The fair value of derivative financial instruments and loans was calculated by discounting the expected future cash flows using market interest rates. The fair value of other financial assets was determined using market interest rates.
Notes
Financial instruments carried at fair value are measured in accordance with the following fair value hierarchy pursuant to IFRS 7: a) Level 1 (active market): Securities of € 107,840k (prior year: € 0k) b) Level 2 (derived prices): Asset value of interest cap at € 111k (prior year: € 421k), liability from interest cap at € 1,350k (prior year: € 1,880k); liability from interest caps (cash flow hedges) at T€ 1,660k (prior year: € 789k) c) Level 3 (no derivable price): Investments of € 2,546k (prior year: € 2,332k).
VII. N otes to the income statement 1) Revenue Revenue breaks down by business segment as follows: Business segments in € m Clinical acute care Post-acute and rehabilitation treatment Social and welfare facilities
2012
2011
2,481.0
2,282.2
393.9
211.2
18.9
19.2
Other
86.2
44.7
Total
2,980.0
2,557.3
Revenue increased due primarily to first-time consolidation in the prior year. New medical services, occupancy management and performance-based compensation agreements also had a positive impact on revenue.
159
160
Asklepios annual report 2012
2) Other operating income Other operating income breaks down as follows: in € m
2012
2011
Income from the reversal of provisions / liabilities
6.5
4.3
Income from clinical studies and research projects
5.2
1.4
Income from usage rights
3.8
3.6
Income from insurance claims
3.7
1.7
Income from cooperation agreements
2.5
2.4
Income from the disposal of assets
2.4
0.6
Income from training seminars
1.7
1.4
Refund for other welfare payments
1.4
1.4
Other
8.0
4.3
Total
35.2
21.1
Income from the reversal of provisions / liabilities relates primarily to the reversal of variable purchase price liabilities (€ 3.5m). The increase in income from clinical studies and research projects relates primarily to Proresearch activities. Income from granting rights of usage is generated mainly from leasing rooms and devices to a third-party physicians’ practice for radiotherapy. Income from insurance claims pertains mainly to claims for water damage in two clinics, which are offset by corresponding expenses. Income from cooperation agreements is mainly the result of a cooperation agreement concluded
between
Asklepios
Klinik
St.
Georg
and
Berufsgenossenschaftliches
Unfallkrankenhaus Hamburg (BUKH). Income from the disposal of non-current assets results from the sale of a former administrative building. Other income also comprises various items from current business operations. These include income from other refunds.
Notes
3) Cost of materials The ratio of the cost of materials to revenue improved year-on-year to 22.1 % (prior year: 22.8 %). In absolute terms, the cost of materials increased by € 77.5m year-on-year to € 659.6m; in relative terms, however, this development was below-average. The measures implemented in 2012 with a view to cutting operating expenses (mainly implants) are taking effect.
4) Personnel expenses Personnel expenses rose by € 280.6m year on year to € 1,815.1m. The headcount rose from 33,152 full-time equivalents in the prior year to 34,037. The ratio of personnel expenses to revenue increased from 60.0 % to 60.9 %. All in all, the increase in personnel expenses was attributable to a rise in the number of employees due to organic growth and wage increases. The pension costs contain benefits of the Asklepios Group from defined benefit and defined contribution obligations and similar commitments. For company pensions, (former) employees have claims under supplemental pension plans (ZVK), federal or state benefit plans (VBL), or direct insurance policies in addition to the pension provisions. The employees are also insured through the statutory pension insurance. The current contribution payments to VBL / ZVK are reported in the operating result as postemployment expenses. Contribution payments for post-employment payments came to € 34.2m in financial year 2012 (prior year: € 33.8m). In addition, the employer’s contributions to pension insurance qualify as payments to defined contribution plans.
161
162
Asklepios annual report 2012
5) Other operating expenses Other operating expenses relate to: in € m
2012
2011
Maintenance and servicing
85.6
84.0
Property expenses
55.7
25.9
Contributions, consulting and audit fees
22.9
20.6
Advertising and travel expenses, IT expenses
20.5
17.6
Office supplies, postage and telephone charges
20.5
18.5
Training expenses
14.9
12.9
Taxes, dues and insurance
13.5
16.9
Litigation costs and damage claims
8.3
8.3
Other administrative expenses
7.1
4.9
Contract workers
5.4
5.3
Recruiting costs
5.3
5.4
Expenses relating to other periods
3.2
6.7
Waste disposal expenses
3.2
3.1
Miscellaneous billing services
0.0
4.5
Other
7.2
11.3
Total
273.3
245.9
Long-term rental and lease obligations are the main items recognised in property expenses. Other expenses comprise various items from current operations.
6) Depreciation, amortisation and impairment Amortisation, depreciation and impairment break down as follows: in € m
2012
2011
Depreciation and impairment of property, plant and equipment
95.0
75.8
Amortisation and impairment of intangible assets
8.4
6.0
Total amortisation / depreciation and impairment
103.4
81.8
Notes
7) Investment result The investment result breaks down as follows: in € m Earnings from investments
2012
2011
1.9
0
Earnings from investments accounted for using the equity method
0
+2.4
Impairment of investments accounted for using the equity method
0
-51.3
1.9
-48.9
Other investment loss / income
Income from investments includes dividend payments. For information on expenses for impairment reported in the previous year, please refer to IV.b) Consolidation, accounting and measurement methods.
8) Interest result The interest result breaks down as follows: in € m
2012
2011
3.9
7.3
Interest expenses
-34.0
-36.7
of which interest and expenses from subordinated loans
(-8.2)
(- 12.6)
Interest result
-30.1
-29.4
Interest income
The Company received € 2.5m of the interest income reported (prior year: € 4.2m). The Company paid € 29.5m (prior year: € 33.6m) of the interest expenses. The Company has entered into some interest rate hedges to hedge against the interest risk of its floating-rate financial liabilities and part of its participation capital. Under the terms of the hedges, the Group receives compensation if a Euribor-based interest limit is exceeded.
163
16 4
Asklepios annual report 2012
Interest expenses break down as follows: in € m
2012
2011
Bank loans and overdrafts
-14.8
-14.9
Participation capital / subordinated loans
-8.2
-12.6
Interest expense from the bond
-6.3
-6.3
Interest expense for pension and similar obligations
-2.8
-1.8
Other finance costs
-1.9
-1.1
-34.0
-36.7
Interest expenses
The interest expenses include interest on finance leases of € 529k (prior year: € 255k). Interest income breaks down as follows: in € m
2012
2011
Interest income from bank balances
2.5
4.9
Interest from loans granted
0.9
1.6
Interest on receivables
0.2
0.1
Other finance revenue
0.3
0.7
Interest income
3.9
7.3
€ 0.8m of the interest income of the previous year resulted from the non-recurring accounting adjustment of a liability in accordance with IAS 39. In the investment result, € -43.2m is attributable to the ‘assets recognised at fair value’ measurement category and € +43.2m to the ‘measured at fair value through profit or loss’ category. This relates to a fair-value hedge with a net result of zero (see IV. 10 d) Derivative financial instruments). Net gains from ´financial assets available for sale` include dividends of € 1,858k (prior year: € 0k), which are reported in the investment result. The net loss from financial instruments is € -519k (prior year: € -953k) and relates to hedging transactions measured at fair value.
Notes
9) Income taxes Income taxes relate to current and deferred income taxes. Corporate income taxes, including the solidarity surcharge, are reported as income taxes. In addition, deferred taxes on different carrying amounts in the commercial and tax balance sheets and realisable unused tax losses, which can generally be carried forward for an unlimited period of time, are reported under this item in accordance with IAS 12. Income taxes are broken down as follows: in € k Current income taxes Deferred income taxes Total
2012
2011
-23,131
-16,141
+544
-4,039
-22,587
-20,180
The taxes paid in the financial year amount to € 22.1m (prior year: € 18.0m). The reconciliation of the current tax expenses and the tax resulting on the earnings before income taxes taking German corporate income tax into account is shown below: in € k
2012
2011
Earnings before income taxes
135,509
55,913
Imputed tax expense*
-21,444
-8,849
-369
-8,540
-1,138
-1,826
+840
0
Tax-neutral effects Non-capitalised loss carryforwards Capitalisation of commercial tax loss carry forwards Tax increases / decreases due to compensation payments / non-deductible expenses as well as corporate income tax on compensation payments of non-deductible expenses as well as corporate income tax on compensation payments on non-controlling interests Tax increases / decreases due to deviating tax rates Tax increases / decreases due to recognition adjustments for deferred taxes
-94
+52
-685
-647
-87
-438
Trade tax
-632
-408
Tax refunds/back payments for prior years
+246
-49
Dividend income, 5 % tax
+340
+149
Other
+436
+376
-22,587
-20,180
Tax expense of the current year *) imputed tax rate for 2012 and 2011 15.825 %
165
166
Asklepios annual report 2012
Tax-neutral effects relate mainly to the loss deduction present and in the previous year to the impairment carried out in accordance with IAS 28.33 in conjunction with IAS 36. The tax rate is 16.7 % (prior year: 18.9 % adjusted for extraordinary items).
VIII. N otes to the statement of cash flows In accordance with IAS 7 (revised 1992), the statement of cash flows is structured according to cash flows from operating, investing and financing activities. The cash flow from operating activities is developed using the indirect method. Cash and cash equivalents comprise cash on hand and bank balances. Compared to the prior year, cash and cash equivalents fell by € 36.6m. Cash flow from operating activities totals € 225.5m (prior year: € 202.6m). The increase is the result of higher EBITDA and higher non-recurring equalisation claims according to the KHEntgG. Net cash flow from operating activities is offset by cash flow from investing activities including acquisitions of € -309.2m (prior year: € -119.7m), which is due mainly to investments in non-current assets and the acquisition of financial assets. Cash flow from financing activities (€ +47.1m, prior year: € -162.9m) was influenced by borrowing. It is offset by loan repayments and subordinated financing.
IX. Other notes 1) Annual average number of FTEs The average number of employees in financial year 2012 was 34,037 (prior year: 33,152). FTEs by group Nursing service
2012
2011
11,772
11,657
Medical-technical service
5,659
5,472
Medical service
4,832
4,678
Functional service
3,340
3,228
Financial service
2,965
2,637
Administrative service
2,609
2,555
Other
2,860
2,925
Total
34,037
33,152
Notes
2) Contingent liabilities and other financial obligations Other financial obligations relate mainly to capital commitments as well as rental and lease agreements and comprise the following: in € k Rental and lease agreements
2012
2011
490,832
480,178
Capital commitments
73,401
76,113
Purchase commitment
65,304
48,201
Maintenance and supply agreements
44,625
47,070
2,810
3,829
Other
Insurance contracts
17,564
18,772
Total
694,536
684,163
The obligations arising from rental and lease agreements relate primarily to the real property of MediClin AG that is rented on a long-term basis, excluding obligations already recognised during purchase price allocation. The underlying rental agreements have a term until 31 December 2027. The agreements provide for an annual rent adjustment in the amount of the change in the German Consumer Price Index, but in any case no more than 2 % p.a. All other financial obligations are carried at their nominal amount and are due as follows: €k Less than 1 year
147,988
Between 2 and 5 years
203,953
More than 5 years
342,595
Total
694,536
The future payment obligations under operating leases broke down as follows as of 31 December 2012 and 31 December 2011 respectively: in € k Less than 1 year
31.12.2012
31.12.2011
36,089
31,828
Between 2 and 5 years
127,565
118,214
More than 5 years
327,178
330,136
490,832
480,178
Total
Please refer to section 5) for information on contingent liabilities with related parties.
167
168
Asklepios annual report 2012
3) Management remuneration The members of the management in key positions constitute the managing directors / members of the management boards of AKG and its subgroups as well as the members of the Supervisory Board of AKG and the supervisory boards of the subgroups. Management remuneration totalled € 5.5m in the financial year (prior year: € 7.6m). € 2.2m of this figure relates to managing directors of the parent company as defined by Sec. 314 (1) No. 6 HGB (prior year: € 4.7m). Supervisory board remuneration totalled € 354k in financial year 2012 (prior year: € 298k), of which € 49k (prior year: € 47k) was paid to members of the Supervisory Board of AKG.
4) Group auditor fees (Section 314 (1) No. 9 HGB) Total fees for the Group’s auditors were expensed as follows in the financial year: Fee for in € k
2012
Audits of financial statements
1,175
Other attestation services
0
Tax advisory services
107
Other services
532
Total
1,814
5) Related party disclosures For AKG, related parties within the meaning of IAS 24.20 include entities controlled by the Group and / or entities over which the Group has a significant influence and vice versa. In particular, subsidiaries and equity investments are therefore defined as related parties. Related parties in € k
2012
2011
Receivables
22,067
6,184
Liabilities
14,096
15,918
Income
1,504
3,379
Expenses
2,086
2,206
Of the receivables (liabilities) with related parties, € 378k (€ 17k) (prior year: € 122k (€ 10k)) are due from (to) associates.
Notes
In the current and prior financial year, arm‘s length transactions, which resulted mainly from supplies and services, were concluded with investees in which the Company has a shareholding of less than 50 %. This relates primarily to income from management fees of € 0.3m (prior year: € 0.5m). The expenses connected to transactions with investees are insignificant. Transactions between Asklepios Kliniken Gesellschaft mit beschränkter Haftung and its consolidated subsidiaries and among the consolidated subsidiaries were eliminated from the consolidated statement of financial position and the consolidated income statement. Dr
Bernard
gr.
Broermann,
Königstein-Falkenstein,
is
the
sole
shareholder
of
Asklepios Kliniken Gesellschaft mit beschränkter Haftung. In previous years, AKG and an indirect wholly-owned investment of Dr Bernard gr. Broermann with registered offices in the USA entered into loan agreements of USD 14.33m (€ 10.9m) at standard market security and interest conditions. € 4.1m of the loan volume was, in turn, financed by special-purpose loans provided by Dr gr. Broermann as the lender to AKG as the borrower. In light of ongoing financial difficulties on the Californian market, the loan interest has been deferred and impaired together with the loan receivables (€ 8.2m; prior year: € 7.0m). By a loan purchase and transfer agreement of 22 January 2013, the loans were fully transferred in their total amount of USD 13.8m (€ 10.5m) from AKG to another related party as of 31 December 2012. The previous repayment arrangements continued to apply. The impairments made were retained. There is a consulting agreement in place between Asklepios Kliniken Gesellschaft mit beschränkter Haftung and the law firm Dr. gr. Broermann. The legal consulting services are provided at market rates. In the financial year 2012, no legal consulting took place (prior year: € 10k). Asklepios Kliniken Verwaltungsgesellschaft mbH has a lease agreement for various office spaces with a related party. The related expenses of € 324k are reported in the consolidated income statement under other operating expenses. There is a consolidated tax group for VAT purposes at the level of AKG. This development simplifies the intragroup transactions considerably and should result in significant savings in the medium term. Standard intercompany agreements have been concluded between the Group entities in order to exchange services. AKV has received a purchase offer for financial assets held by the company from a related party (a subsidiary wholly-owned by the AKG shareholder). The related party is contractually committed to be bound to the purchase offer indefinitely. However, the related party can call on AKV in writing to accept the offer within a period of 30 days at any time. Thereafter,
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the offer will expire without any further declaration. Due to the classification as a fair value hedge, income from the hedge of € 43.2m was posted in the income statement, which is offset by the same amount of expense from the underlying transaction. There is a standard market warranty deed in place between Asklepios Kliniken GmbH and Kurstift Bad Homburg gGmbH, whose shareholder is Dr. Broermann Hotels & Residences GmbH. According to this deed, Asklepios Kliniken GmbH assumes the warranty for all claims against Kurstift Bad Homburg gGmbH to which ZVK Wiesbaden is or will be entitled in the event of termination of membership in accordance with Section 15 of the bylaws of ZVK Wiesbaden. The warranty is limited to a settlement amount of € 3.3m. The warranty amount is reviewed every five years, starting on 1 January 2018. There are no other transactions with related parties. In the financial year, consulting services worth € 378k were rendered by members of the Supervisory Board of Asklepios Kliniken Gesellschaft mit beschränkter Haftung or by parties related to them in accordance with the arm‘s length principle. The services are included under other operating expenses. The compensation paid to the employee representatives on the Supervisory Board for the work they perform above and beyond their Supervisory Board activities amounts to € 0.5m (prior year: € 0.5m).
6) Litigation The Company is occasionally involved in legal disputes in the course of its business activities. The Company is not aware of any events that could have a significantly adverse effect on its financial position and financial performance.
7) Subsequent events On 5 March 2013, the WestLB profit participation certificates were terminated as of the end of the next three-month period defined in the agreement. The termination is subject to the suspensive condition that the counterparty accepts the termination. Until then, it is unclear when a repayment will be made.
Notes
8) Corporate boards of Asklepios Kliniken Gesellschaft mit beschränkter Haftung
Supervisory board The members of the Supervisory Board of the Company are: Dr. Stephan Witteler (since 22 Feb. 2013)
Chairman of the Supervisory Board Lawyer, Frankfurt
Prof. Dr. Dieter Feddersen (until 31 Dec. 2012)
Chairman of the Supervisory Board Lawyer, Kronberg
Dominik Schirmer
Erika Harder Dr. Nicolai Jürs PD Dr. Karsten Krakow Dr. Hans-Otto Koderisch Rainer Laufs (since 15 Feb. 2013)
Deputy Chairman of the Supervisory Board Trade union secretary / Regional department head, Oberaudorf Medical assistant, Krailling Specialist of internal medicine, angiology, Hamburg Senior consultant, Frankfurt Specialist of internal medicine, Heidelberg Management consultant, Kronberg
Prof. Dr. Michael Lingenfelder
Professor of business studies, Lustadt
Prof. Dr. Dr. h.c. Karl-Heinrich Link
Senior surgical consultant, Wiesbaden
Prof. Dr. Stephan Moll (until 17 Jan. 2013)
Professor of business law, Bad Soden
Stefan Murfeld Monika Paga Dirk Reischauer Jochen Repp Katharina Ries-Heidtke
Employee, Königstein Nurse, Schwedt Lawyer, Wiesbaden Lawyer, Oberursel Employee, Hamburg
Michael Schreder
HR manager, Lich
Martin Simon Schwärzel
Nurse, Griesheim
Hilke Stein Andre Stüve Dirk Völpel-Haus Zu Höne, Stephan
Trade union secretary, Hamburg Architect, Damme Trade union secretary, Berlin Managing director, Kassel
Supervisory Board compensation of € 47k (prior year: € 47k) was paid in 2012.
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Management Dr. Ulrich Wandschneider Hamburg
Diplom-Kaufmann Management chairman
Dipl.-Kfm. Stephan Leonhard Oberursel
Diplom-Kaufmann, tax consultant Management vice-chairman
Dr. Roland Dankwardt Hochheim
Dr. med. Dipl. (VWA) Krankenhausbetriebswirt
Kai Hankeln Bad Bramstedt
Certified business economist (elected at the Supervisory Board meeting on 20 June 2012 with effect from 1 July 2012, entered into commercial register on 30 July 2012)
Hamburg, 26 March 2013 Dr. Ulrich Wandschneider
Dipl.-Kfm. Stephan Leonhard
Dr. Roland Dankwardt
Kai Hankeln
Notes
Affirmation of the legal representatives
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the net assets, financial position and results of operations of the Group, and the interim management report of the Group includes a fair review of the development and performance of the business and the position of the Group, together with a description of the material opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.
Hamburg, 26 March 2013 Dr. Ulrich Wandschneider
Dipl.-Kfm. Stephan Leonhard
Dr. Roland Dankwardt
Kai Hankeln
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Notes
Auditor's report
(Translation – the German text is authoritative)
We have audited the consolidated financial statements prepared by the Asklepios Kliniken Gesellschaft mbH, Hamburg, comprising the consolidated statement of financial position, the consolidated income statement, the consolidated statement of comprehensive income, the statement of changes in group equity, the consolidated cash flow statement and the notes to the consolidated financial statements, together with the group management report for the business year from January 1st, 2012 to December 31st, 2012. The preparation of the consolidated financial statements and the group management report in accordance with the IFRSs, as adopted by the EU, and the additional requirements of German commercial law pursuant to § (Article) 315a Abs. (paragraph) 1 HGB ("Handelsgesetzbuch": German Commercial Code) are the responsibility of the parent Company's Managing Directors. Our responsibility is to express an opinion on the consolidated financial statements and on the group management report based on our audit. We conducted our audit of the consolidated financial statements in accordance with § 317 HGB and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the consolidated financial statements in accordance with the applicable financial reporting framework and in the group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated financial statements and the group management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the annual financial statements of those entities included in consolidation, the determination of the entities to be included in consolidation, the accounting and consolidation principles used and significant estimates made by the Company´s Managing Directors, as well as evaluating the overall presentation of the consolidated financial statements and the group management report. We believe that our audit provides a reasonable basis for our opinion. Our audit has not led to any reservations. In our opinion based on the findings of our audit the consolidated financial statements comply with the IFRSs as adopted by the EU and the additional requirements of German commercial law pursuant to § 315a Abs. 1 HGB and give a true and fair view of the net assets, financial position and results of operations of the Group in accordance with these requirements. The group management report is consistent with the consolidated financial statements and as a whole provides a suitable view of the Group's position and suitably presents the opportunities and risks of future development. Frankfurt am Main, March 26, 2013 PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft
Dr. Peter Bartels
Lars Müller
Wirtschaftsprüfer Wirtschaftsprüfer (German Public Auditor)
(German Public Auditor)
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DISCLAIMER This report contains forward-looking statements. These statements are based on current experience, estimates and projections of the management and currently available information. They are not guarantees of future performance, involve certain risks and uncertainties that are difficult to predict, and are based upon assumptions as to future events that may not be accurate. Many factors could cause the actual results, performance or achievements to be materially different from those that may be expressed or implied by such statements. We do not assume any obligation to update the forward-looking statements contained in this report. This report does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any bond, nor shall there be any sale, issuance or transfer of the bonds referred to in this report in any jurisdiction in contravention of applicable law.
News from Asklepios
Junior Docs It‘s not just close to reality, it is reality. Eight assistant doctors at three Asklepios clinics in Hamburg are under the spotlight as part of a documentary about entering the medical profession by German TV channel ZDFneo. Following 100 days of shooting on location, “Junior Docs“ is being aired as a ten-part documentary. “This is not about gods in white coats, but young professionals who must also cope with paperwork, duty rosters and dirty coffee cups“ – aerzteblatt.de “They are new entrants into what is undoubtedly one of the most responsible professions in our society. They are providing first aid in the emergency room, making their first diagnoses, delivering babies and performing surgery for the first time“ – zdf.de “Unlike German TV programmes such as “Landarzt“ and “Schwarzwaldklinik“ (…) or “Dr. House“ the struggle for life and death and the search for the correct diagnosis is played out in real life“ – welt.de
iPhone App
Saving lives with Asklepios Rapid assistance when every second counts – Asklepios is also there to help when you‘re on the go. A first-aid course is mandatory for every driving license candidate, but what to do if you actually encounter an emergency situation?
android App
Our first-aid app “Leben Retten“ (saving lives) not only explains in detail how to administer cardiac massage, but even counts out the necessary rhythm for you!
Medicine in demand Asklepios on every channel? Not yet, but if you‘re looking for reliable first-hand information about medical issues, the Asklepios YouTube channel is for you. In the “Hanseatic Evening Lectures“, well-known Asklepios medical specialists provide answers to questions like “What makes my body ill?“, “What do doctors‘ diagnoses mean?“ and “How can I stay healthy?“ – free of charge and every Thursday at 18:30 in one of Hamburg‘s Asklepios clinics. The video series entitled “Nachtvorlesung nachgefragt“ provides a summary of the content and questions from the previous lecture in the form of a conversation with our experts. So you don‘t miss out on this important health information!
Wi snackt ok Platt … …proclaims a button worn on the coats of staff at the Asklepios Klinik Wandsbek. They have been honing their knowledge of the German dialect of “Plattdüütsch“ or Low German in classes held at the clinics – just so the conversation doesn‘t end at “Moin, moin“ (‚good morning‘). As it happens, half of the Hamburg‘s older clinic patients understand “Plattdüütsch“, and many of them even grew up speaking it. “Particularly for older patients, we know how important it is for them to feel a connection with home and to feel safe. Low German gives us a wonderful opportunity to help provide this connection.“ enthuses Christian Strauß, Managing Director of Asklepios Klinik Wandsbek.
Asklepios 2012 Our 45,390
employees would fill all the seats in the Commerzbank-Arena in Frankfurt
15 %
of all German private hospitals belong to our Group
16,527 babies
were born in our hospitals in 2012 – every third newborn in Hamburg is an “Asklepiat”!
78 %
of all Asklepios senior consultants have already attended the seven-day “Management in Focus” seminar
In 2012, we bid farewell to the 19 graduates of the first year-group of the Asklepios Medical School
Financial calendar 29.05.2013
Publication of 1st quarterly statement
29.08.2013
Publication of 2nd quarterly statement
29.11.2013
Publication of 3rd quarterly statement
Asklepios Kliniken GmbH Investor Relations Debusweg 3 61462 Königstein-Falkenstein Phone: +49 (0) 61 74 90-11 92 Fax.: +49 (0) 61 74 90-11 10
[email protected]
www.asklepios.com
