Global Health Partner third quarter revenues increase 19% to SEK 129.1M

Nov 1 2011

Global Health Partner:

THIRD QUARTER 2011

· Revenues increased by 19 percent to SEK 129.1 million (108.8)

· The operating result amounted to SEK -11.7 million (-4.1)

· The result before tax amounted to SEK -12.7 million (-4.8)

· The result after tax amounted to SEK -13.6 million (-5.0)

· The result per share amounted to SEK -0.19 SEK (-0.07)

· Organic growth of 1 percent (15)

· During the quarter the Group acquired OPA - orthopaedic and spine surgery business in Denmark

· Start of Bodylift Center in Copenhagen

JANUARY - SEPTEMBER 2011

· Revenues increased by 20 percent to SEK 488.4 million (407.9)

· The operating result amounted to SEK 11.7 million (15.9)

· The result before tax amounted to SEK 9.0 million (16.5)

· The result after tax amounted to SEK 0.8 million (7.5)

· The result per share amounted to SEK -0.06 (0.01)

· Organic growth of 9 percent (15)

THE CEO'S COMMENTS

Dip in profitability for the Swedish bariatric clinics During the second quarter profitability deteriorated substantially in the Swedish bariatric clinics due to rapidly falling private demand for obesity operations. This development continued and was accentuated during the third quarter and is expected to last for the rest of the year. At the same time demand from publicly funded patients has increased strongly, because the Swedish County Councils have given higher priority to this treatment during 2011. A large number of the publicly financed patients are treated, and will continue to be treated, by private practitioners. However, this is done at a considerably lower price. In order to meet the increasing needs and the significantly lower levels of remuneration, sweeping efficiency measures have been taken and are expected to have full effect during the first half year 2012.

The weaker result for the Bariatrics business area compared with the previous year is also due to start-up costs in the newly started clinic in Copenhagen. These are a consequence of changed inclusion criteria for obesity operations in Denmark. During the period GHP started a sister clinic to Bariatric Center Copenhagen, Bodylift Center. The clinic, which is the first of its kind within GHP, offers reconstructive plastic surgery to patients who have undergone heavy weight loss after surgery.

Other business areas are developing well. Our spine clinics have a high degree of capacity utilization and continued strong demand. We need to increase our production capacity and we have employed new medical personnel who are now undergoing in-service training and are being phased into the businesses. In the short term this means a certain burden on the clinics.

The Orthopaedics business area is in a similar situation, that is high demand in the Swedish clinics. Integration of our newly acquired Danish clinic OPA has been begun, with the aim of securing planned synergies with the other orthopaedic clinics within GHP.

The specialist clinics in Dental have performed well bearing in mind lower demand for complex implant treatments. Two of the three clinics have surpassed the objectives and the positive development after the efficiency and market measures that have been carried out have begun to show results. Arrhythmia and the gastro clinics are performing according to plan and continue to have a strong inflow of patients. The central costs remained unchanged during the period.

In general we have experienced considerably tougher price pressure and competition than expected. This leads to a stronger commitment from GHP centrally, via our business area managements, to ensure the utilization of synergies and economies of scale that have not been utilized so far. For the same reason we are now looking through branding and market communication with the aim of strengthening the clinics' local market positions. During the period an investment in a minority shareholding has been made in the Finnish care business Laastari, with the aim of introducing a new concept for rapid and effective emergency care in the first line in Sweden. Laastari has successfully set up four clinics in Finland and had a very positive reception from patients treated. The investment will give GHP its own access to patients within the first line of healthcare.

Source: Global Health Partner