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Medicover - ABGSC Investor Days feedback

14 maj 2025

<a id="bm-comp-3eb2d561-494f-4e86-91f8-f00fbf625a2e" name="bm-comp-3eb2d561-494f-4e86-91f8-f00fbf625a2e" class="BMCustomAnchor"></a><table><tr><td bm-component-id="3eb2d561-494f-4e86-91f8-f00fbf625a2e" style="vertical-align: top; width:100.000000%;"><ul><li>New CEO is continuing on the strong trajectory</li><li>We expect 15% yearly organic growth for '25e-'27e</li><li>Trades at ~13x '25e EV/EBITDA</li></ul></td></tr></table><a id="bm-comp-552dd295-1d54-42d4-8aa9-e540f61f0710" name="bm-comp-552dd295-1d54-42d4-8aa9-e540f61f0710" class="BMCustomAnchor"></a><table><tr><td bm-component-id="552dd295-1d54-42d4-8aa9-e540f61f0710" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">New CEO is not so new</h3><p>Today, we welcomed Medicover&#8217;s new CEO, Mr John Stubbington, to ABGSC&#8217;s Investor Days. This was one of Mr Stubbington's first public appearances as CEO, although he has been with the company since 2010, serving as COO of Healthcare Services, a division that accounts for around 70% of the company&#8217;s revenues. During his presentation, Mr Stubbington outlined the business model and the main factors driving growth, emphasising the benefits of being a full-service provider of healthcare and related services, particularly in Poland. He also highlighted the synergies from Medicover&#8217;s recent acquisitions, both of which are EPS accretive following consolidation.</p><h3 class="bm-h3">Clear focus on continued growth and expanding margins</h3><p>The presentation reaffirmed that the company&#8217;s strategic direction will remain consistent despite the leadership change. The objective is clear: continue to drive growth and expand earnings. According to management, the strong growth to date, and the expectation that it will continue, can be attributed to four key factors: 1) health expenditure is expected to increase, 2) an ageing population will result in a higher illness burden, 3) there is significant unmet healthcare demand in the markets where Medicover operates, and 4) the company benefits from its strong brand and broad service offering. Furthermore, as previously immature units mature and capacity utilisation increases, coupled with a shift towards higher-margin businesses, earnings are expected to continue to grow in the years to come.</p><h3 class="bm-h3">Annual organic growth of 15% for '25e-'27e</h3><p>Over the coming years, we expect Medicover to continue delivering strong growth, with an annual organic growth rate of 15% for &#8216;25e-&#8216;27e. Alongside this growth, we forecast the adj. EBITDAaL margin to expand from an expected 10.6% in &#8216;25e to 11.2% in &#8216;27e. Based on current estimates, Medicover is trading at ~13x &#8216;25e EV/EBITDA, and our fair value range corresponds to a &#8216;25e EV/EBITDA of 10x-13x.</p></td></tr></table>

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