Press release -
In turnaround year, Falck improved profitability and reduced debt by DKK 460 million
Leading emergency response and healthcare company, Falck released its financial results for 2018 today. The overall financial position was strengthened through improved profits, strong cash generation and reduced debt levels, while customer satisfaction ratings were kept high and new business was won.
The company improved underlying profitability (EBITA) by 2.3 percentage points to 4.7% through more than 2,000 efficiency initiatives. The efficiency programme continues through 2019, and Falck’s renewed ambition is to reduce the cost base by an additional DKK 500 million compared to 2018 and with full run-rate effect in 2020.
Financial highlights for 2018 were:
Reported revenue was DKK 13,270 million (2017: DKK 14,381 million) – adjusted revenue growth was 1.6%1.
Reported operating profit before other items (EBITA) was DKK 228 million (2017: loss of DKK 42 million). Underlying EBITA improved to DKK 621 million2 (2017: DKK 338 million) with an underlying EBITA margin of 4.7% (2017: 2.4%) driven by Falck’s comprehensive efficiency programme.
Free cash flow improved significantly to DKK 741 million (2017: DKK 441 million). The development was mainly attributable to improved earnings and enhanced cash collection from customers in the US Ambulance business.
Divestments of Falck Safety Services and other non-core businesses continued to reduce complexity.
Falck continued to strengthen its financial position through reducing net interest-bearing debt by DKK 460 million to DKK 4,961 million, bringing the NIBD/EBITA-ratio to 2.62 (2017: 3.32).
President & CEO Jakob Riis said:
“2018 was a turnaround year. We still have a long way to go but we are in a much better place than we were one year ago. We have improved our profitability and cash collection and have divested non-core activities. This has allowed us to reduce our debt while making significant progress on building global operating models, thereby allowing us to further develop our business and improve our industry leadership now and in the years to come.
While strongly committed to restoring profitability, we continue to deliver services to quality standards that are leading in our industry. Thanks to our frontline employees, we continuously see high customer satisfaction ratings, and while pruning our contract portfolio as part of our turnaround, we continue to win new business. In 2018, Falck was awarded new contracts for an annual contract value of more than DKK 800 million. We see that as a vote of confidence in our ambition to be a leading provider to local communities and a tribute to our employees who carry out their job with a strong sense of purpose.”
New significant contracts include ambulance services to Alameda County in California and King’s College Hospital in London, additional ambulance lots in Stockholm, healthcare services to the Volvo Group in Sweden and roadside assistance services to Danish insurance company Topdanmark.
“To further enhance our competitive edge and to improve profitability, we have set a revised ambition of an additional DKK 500 million for our efficiency and cost optimisation programme. We have successfully implemented the programme across major business areas, and now we will extend it to new areas while leveraging on the investments in improved operating models installed during the past year. We believe that a strong focus on efficiency goes hand in hand with improving our offering and being a partner of choice to our customers.”
Falck refrains from appealing competition case
On 30 January 2018, Falck received a ruling for violating the Danish competition rules. The company has decided to refrain from appealing the ruling to the Danish Competition Appeals Board and to the courts of law.
“In 2014-15, we failed to live up to our own standards and to the expectations of society. What was said and done back then is unacceptable. Our competition guidelines are clear, and we are progressing well on our clean-up activities and turnaround. We want to leave no doubt about that. Appealing the decision would compromise the business ethics we stand for and blur our focus on our turnaround that progresses well. Now, it is all about regaining customers’ and society’s confidence in Falck.”
Falck’s annual report is available at www.falck.com.
For further information, please contact Falck’s Communications Department
on tel. +45 7022 0307 or firstname.lastname@example.org.
Falck is a leading international provider of ambulance and healthcare services. For more than a century, Falck has worked with local and national governments to prevent accidents, diseases and emergency situations, to rescue and assist people in emergencies quickly and competently and to rehabilitate people after illness or injury.
Falck operates in 31 countries and has more than 32,000 employees.