Interim report January – June 2016

Telephone conference

July 22, 2016

Thomas Berglund, CEO

Olof Bengtsson, CFO

Capio AB (publ) 2

Strong development in all segments – France on track for

full price decrease compensation in 2016

Highlights January – June 2016

• Strong development:

3.8% organic sales growth

12.2% EBITA growth

68.8% adj. profit growth1

Net debt at MSEK 2,941 with a financial leverage of 2.8x

• Continued strong result growth in Nordic and Germany

driven by organic sales growth and productivity

improvements

• Good volume growth in France and the 2015 price

reduction was compensated for with the trend for margin

development improving during the second quarter – on

track for full price decrease compensation in 2016

Continued productivity improvements 1 Refer to page 28 in the interim report for definition.

2016-07-22

Capio Group APR - JUN

JAN - JUN

FULL YEAR

2016 2015 ∆, % 2016 2015 ∆, % RTM 2015

Net sales 3,573 3,441 3.8

7,176 6,919 3.7

13,743 13,486

Organic sales growth, % 4.0 3.5

3.8 3.2

3.2 2.9

Operating result (EBITDA) 276 237 16.5

572 528 8.3

1,045 1,001

Margin, % 7.7 6.9

8.0 7.6

7.6 7.4

Operating result (EBITA) 172 136 26.5

367 327 12.2

632 592

Margin, % 4.8 4.0

5.1 4.7

4.6 4.4

Adj. profit for the period3 123 60 105.0

260 154 68.8

432 326

Adj. EPS, SEK 0.87 0.47

1.84 1.22

3.06 2.44

Net capital expenditures -113 -90

-209 -145

-455 -391

In % of net sales 3.2 2.6

2.9 2.1

3.3 2.9

Net debt 2,941 3,031

2,941 3,031

2,941 2,936

Financial leverage 2.8 2.9

2.8 2.9

2.8 2.9

Capio AB (publ) 3

Group financial development

• Organic sales growth from volume growth as overall price increases were limited

• Continued result and margin improvement in Nordic and Germany driven by

productivity improvements. France compensated for the 2015 price reduction and

the trend for margin development improved during the second quarter

• Adj. profit improved from the higher operating result, improved finance net and a

lower effective income tax rate

• Net capex RTM 2016 at 3.3%, impacted by timing of expansion projects and

divestments2016-07-22

Capio AB (publ) 4

Implementation of the Modern Medicine strategy – resulting

in improved AVLOS

• Continued AVLOS (Average Length Of Stay) improvement in

all segments

• AVLOS improvement in Nordic positively impacted by shorter

stays for hip and knee replacements – the quarter impacted by

a lower case mix

• The positive AVLOS trend continued in France – driven by

improvements in many specialties

• AVLOS in Germany impacted by a higher case mix in the

quarter

2016-07-22

APR - JUN JAN - JUN FULL YEAR

AVLOS by segment, Days 2016 2015 % 2016 2015 % RTM 2015 2014 % 2013 %

Capio Nordic 3.90 4.21 -7.4 4.01 4.22 -5.0 4.01 4.12 4.16 -1.0 4.21 -1.2

Capio Nordic excluding geriatrics 2.78 3.04 -8.6 2.86 3.02 -5.3 2.85 2.93 3.01 -2.7 3.11 -3.2

Capio France 4.35 4.57 -4.8 4.40 4.66 -5.6 4.48 4.61 4.75 -2.9 4.93 -3.7

Capio Germany 4.63 4.72 -1.9 4.46 4.62 -3.5 4.53 4.61 4.82 -4.4 4.82 0.0

Capio Group 4.29 4.51 -4.9 4.32 4.55 -5.1 4.37 4.49 4.63 -3.0 4.75 -2.5

Capio AB (publ) 5

Modern Medicine shows the way forward

• First total knee replacement in day surgery in France

(2011)

• First total hip replacement in day surgery in France

(2012)

• First colectomy cancer patient treated in day surgery in

France (2013)

• First TAVI operation (cardiac valve insertion) in day

surgery in France (2016)

Several medical breakthroughs gained

over the recent years

2016-07-22

News report about the TAVI operation

(https://www.youtube.com/watch?v=HlCSQr0yDkE)

49

44

33

19

117

2

0

10

20

30

40

50

60

70

1,000

0

7,000

6,000

5,000

4,000

3,000

2,000

2011

4,911

2010

4,066

2016

RTM

6,613

2013

5,529

2012

5,296

2015

6,305

2014

5,949

Number of proceduresDischarged, % <= 4 days

Number of in- and outpatients %

0 1 8 26 160 450 510Provided in day care:Number

Capio AB (publ) 6

France – Modern Medicine and Rapid Recovery

reducing AVLOS

• Capio growth of hip and knee

replacements well above market

growth

• Continued significant AVLOS

reduction for hip and knee

replacements also in the first six

months 2016. 9% more patients

discharged within four days in RTM

June 2016 compared with the same

period 2015

• Steady growth in the number of

procedures performed in day care

Source: French market data; Scansanté (ATIH), Swedish market data; Socialstyrelsen

AVLOS development hip and knee replacements 2011-2015

Rapid Recovery strategy

continues to deliver

Days 2011 2014 2015 2011-14, % 2011-15, %

Capio France 8.2 5.6 5.0 -32 -39

The French market 10.2 9.0 8.4 -12 -18

Capio Sweden 3.9 3.3 2.7 -15 -31

The Swedish market - 4.7 -

Capio France Jan-Jun 2016

AVLOS at 4.6 days

Capio France – hip and knee prosthesis surgery

2016-07-22

Capio Nordic APR - JUN

JAN - JUN

FULL YEAR

2016 2015 ∆, % 2016 2015 ∆, % RTM 2015

Net sales 1,950 1,856 5.1

3,854 3,697 4.2

7,400 7,243

Organic sales growth, % 4.7 4.8

3.8 5.1

4.0 4.6

Operating result (EBITDA) 137 103 33.0

249 207 20.3

500 458

Margin, % 7.0 5.5

6.5 5.6

6.8 6.3

Operating result (EBITA) 98 68 44.1

175 138 26.8

353 316

Margin, % 5.0 3.7

4.5 3.7

4.8 4.4 Net capital expenditures -51 -33

-95 -53

-177 -135

In % of net sales 2.6 1.8

2.5 1.4

2.4 1.9

• Improved performance in Proximity Care, positively impacted

by the ongoing productivity program (-90 FTE) – on plan

• Continued positive development in Capio S:t Göran’s

Hospital and Specialist Clinics

• Clinics acquired in Norway 2015 contributed positively

• Focus on Modern Management to drive patient time and

productivity

• Net capex impacted by the new A&E at Capio S:t Göran

Capio AB (publ) 7

Segment – Capio Nordic

The quarter impacted by timing of Easter

2016-07-22

Capio France APR - JUN

JAN - JUN

FULL YEAR

2016 2015 ∆, % 2016 2015 ∆, % RTM 2015

Net sales 1,336 1,304 2.5

2,723 2,617 4.1

5,204 5,098

Organic sales growth, % 2.0 1.8

3.5 1.2

1.9 0.7

Operating result (EBITDA) 143 143 0.0

313 313 0.0

529 529

Margin, % 10.7 11.0

11.5 12.0

10.2 10.4

Operating result (EBITA) 85 85 0.0

196 195 0.5

287 286

Margin, % 6.4 6.5

7.2 7.5

5.5 5.6

Net capital expenditures -57 -46

-98 -75

-233 -210

In % of net sales 4.3 3.5

3.6 2.9

4.5 4.1

• Good volume development in all seven regions with a total

patient growth of 7.9%

• The result was impacted by a price effect of MSEK -48 in H1

• Additional actions to also fully compensate for the 2016 price

reduction being implemented

• Main actions relate to further FTE reorganizations from produc-

tivity improvements combined with more efficient procurement

• Net capex impacted by the timing of expansion projects and

divestments

Capio AB (publ) 8

Segment – Capio France

Pace for margin development improved in the

second quarter

2016-07-22

• Outpatient growth and pricing support organic sales growth.

Total sales growth impacted by the divestment in Q2 2015

• The timing of Easter holidays impacted the Specialized

hospitals positively in the second quarter

• The hospital in Dannenberg continued to develop in line with

plan

• Net capex impacted by the timing of an ongoing construction

project at one of the general hospitals – to be completed

during H2 2016

Capio AB (publ) 9

Segment – Capio Germany

Increased focus on Modern

Medicine drives AVLOS reduction

Capio Germany APR - JUN

JAN - JUN

FULL YEAR

2016 2015 ∆, % 2016 2015 ∆, % RTM 2015

Net sales 287 281 2.1

599 605 -1.0

1,139 1,145

Organic sales growth, % 8.6 2.6

4.9 1.1

4.0 2.0

Operating result (EBITDA) 19 12 58.3 57 52 9.6

99 94

Margin, % 6.6 4.2

9.5 8.6

8.7 8.2

Operating result (EBITA) 13 5 160.0 45 40 12.5 79 74

Margin, % 4.5 1.8

7.5 6.7

6.9 6.4

Net capital expenditures -5 -11

-15 -16

-39 -40

In % of net sales 1.7 3.9

2.5 2.6

3.4 3.5

2016-07-22

Capio AB (publ) 10

Cash flow

• Net capex RTM at 3.3% – the quarter impacted by investments related to the new

A&E at Capio S:t Göran and expansion projects in France. Q1 2015 included a

divestment of non-core assets in France (MSEK 25)

• Working capital impacted by seasonal effects in H1. A change in timing of payment

of social security charges in France combined with an improved DSO in Nordic

explain the main part of the change compared to 2015

• Financial items and tax positively impacted by lower net debt and interest rates

whilst higher tax instalments in France impact the opposite way

Cash flow impacted by seasonal and

timing effects

APR - JUN

JAN - JUN

FULL YEAR

Capio Group 2016 2015 2016 2015 RTM 2015

Net debt opening -3,009 -3,426

-2,936 -3,440

-3,031 -3,440 Operating result (EBITA) 172 136

367 327

632 592

Capital expenditure -114 -94

-211 -174

-469 -432 Divestments of fixed assets 1 4 2 29 14 41

Net capital expenditure -113 -90

-209 -145

-455 -391

In % of net sales 3.2 2.6

2.9 2.1

3.3 2.9 Add-back depreciation 104 101 205 201 413 409

Net investments -9 11

-4 56

-42 18

Change in working capital 93 96 -88 -40 -84 -36

Operating cash flow 256 243

275 343

506 574

Cash conversion, % 148.8 178.7 74.9 104.9 80.1 97.0

Free cash flow after financial items and tax 214 198

203 233

349 379

Cash conversion, % 124.4 145.6

55.3 71.3

55.2 64.0

2016-07-22

Capio AB (publ) 11

Capital employed & financing

• Operating capital employed above year-end 2015, mainly due

to seasonal effects, a change in the payment pattern of social

contributions in France and an improved DSO in the Nordic

• Changes in exchange rates increased capital employed and

net debt compared with year-end 2015

• ROCE impacted by higher capital employed and the increased

RTM EBITA

• Financial leverage at 2.8x impacted by cash flow (incl.

dividend paid of MSEK 71) and the improved RTM EBITDA

Solid financial position –

ready for acquisitions

2016

2015

Capio Group 30 Jun 31 Dec 30 Jun

Operating capital employed 1,472

1,388 1,371

In % of net sales 10.7

10.3 10.2

Other capital employed 6,734

6,549 6,492

Capital employed 8,206 7,937 7,863

Return on capital employed, % 7.7

7.5 7.8

Net debt 2,941

2,936 3,031

Financial leverage 2.8

2.9 2.9

Equity 5,265

5,001 4,832

Financing 8,206 7,937 7,863

2016-07-22

Net debt and financial leverage

2.0

2.5

3.0

3.5

4.0

2,000

2,500

3,000

3,500

4,000

Q2 Q3 Q4 Q1 Q2

2015 2016

Net debt

Financial leverage

MSEK x

Capio AB (publ) 12

Financial targets

1 Development adjusted for structural changes made in June 2014. Refer to Capio Annual Report 2015 note 33.

Net sales and organic sales growth (RTM) Operating result (EBITDA) and margin (RTM)1 Net capital expenditure and in % of sales (RTM)

1B1BNet sales growth

The target is to grow organically at least in line with the market and add acquisition growth at least at a similar rate over time

2B2BOperating result (EBITDA)

The target is to grow operating result at a higher rate than sales growth through increased productivity and operational leverage

3B3BNet capital expenditure

The target with present business mix is to keep net capex around 3% of net sales per year including Modern Medicine and expansion related capex

0

1

2

3

4

5

9,000

10,000

11,000

12,000

13,000

14,000

Q2 Q3 Q4 Q1 Q2

2015 2016

Net sales, RTM

Organic sales growth, % RTM

MSEK %

4

5

6

7

8

9

600

700

800

900

1,000

1,100

Q2 Q3 Q4 Q1 Q2

2015 2016

Operating result (EBITDA), RTM

Operating margin (EBITDA), % RTM

MSEK %

0

1

2

3

4

5

0

100

200

300

400

500

Q2 Q3 Q4 Q1 Q2

2015 2016

Net capital expenditure, RTM

In % of sales, RTM

MSEK %

2016-07-22

• Organic sales growth well in line with market growth – limited acquisition growth

• Operational leverage from volume and productivity improvements increase margins

• Net capex above target following timing of expansion projects and divestments

Capio AB (publ) 13

Convertible debenture loans to employees

• All employees in the Group were offered to

subscribe for convertible bonds

• In total 731 employees signed up for an

amount of MSEK 155

• All six members of Group management

participate with a total amount of MSEK 23

• Dilution of 2.08% (equal to 2,935,322 new

shares)

• Five year duration – conversion between

July 25 and August 15, 2021

2016-07-22

Capio AB (publ) 14

Financial calendar

• Interim report January – September 2016 due

November 3, 2016

• Full year report January – December 2016 due

February 10, 2017

2016-07-22

Capio AB (publ) 15

Questions and Answers

2016-07-22

www.capio.com