Ladies and gentlemen, thank you for standing by. I'm Konstantinos Yukoros, call operator. Welcome, and thank you for joining the MedLife Conference Call to present and discuss the 2024 preliminary or unedited financial results. Please note that the Conference Call is being recorded, and during the management's presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session, and you can submit questions via the webcast platform or via telephone. Should anyone need assistance during the Conference Call, you may signal an operator by pressing star and zero on your telephone or by dialing the phone numbers under the Ask Questions section on the webcast page. At this time, I would like to turn the conference over to Mr. Mihail Marcu, Chairman of the Board and CEO of MedLife Group. Mr. Marcu, you may now proceed.
Thank you. Good evening, everybody, and thank you for joining our conference. Regards with the figures and the results of the full year 2024. Today, I will make this presentation together with the team, Mr. Dorin Preda, that is the Deputy CEO; Alina Irinoiu, that she is the CFO of the company; and Ioana Birsu, HR Manager of the company. I will give the mic to Alina, and she will make the main presentation, and of course, then we'll be with you for the Q&A session. Alina, please take it over.
Thank you, Mihail, and good afternoon, everybody, from my side as well. We thank you for joining the presentation of the preliminary financial results for 2024. As always, of course, I will start with the key messages for this year and also with an outlook for 2025 in terms of strategic priorities and M&A, mostly because more on the budget for 2025 will be available in one month when we release also the audited financial statements. Looking at 2024, we have finalized with a pro forma total turnover of RON 555 million, which represents an increase of 25% compared to the same period last year. Out of this increase, almost 17% was organic growth. This is sustained also by the new created capacities, and you already know very well our projects, but also a good demand of medical services in all our units and business lines.
In terms of profitability, EBITDA grew faster than total revenue, leading to improvement in margins in line with the strategy of recent years. In addition to prevention and the diagnostic platform, we have developed an integrated oncology platform and also top hospital services, which in our strategy is offering an important range of medical services which cannot be postponed to the next economic cycle, thus providing us stability. In terms of pro forma EBITDA, the increase was of 43%, reaching RON 412 million with a 16.1% pro forma EBITDA margin, as well as a nine-times increase in pro forma net result, moving from a negative result last year to RON 33 million, meaning 1.3% pro forma net result margin. In terms of development for this year, looking on the M&A side, we had a prudent approach.
We had completed five important acquisitions with the view, of course, to reach either new geographies or to consolidate our operations on several medical specialties. The first one is Personal Genetics, which is a genetics lab with national coverage, and together with the Onco team, makes us the operator with the greatest expertise in the area of genetics and molecular biology in Romania. The second acquisition is Antares Clinic, which is one of the most important providers of private medical services in the Moldova region. It has a network of three outpatient units located in Piatra Neamț, Botoșani and Donești, and two laboratories also in Piatra Neamț and Botoșani. The third one, Euromedica, located in Baia Mare, this group operates a medium-sized hospital that is offering multidisciplinary services, as well as an outpatient clinic and a laboratory, but also an imaging department.
The acquisition was completed in September, again in a geography in which we were not present before. RoutineMed Group, which is also an integrated diagnostic and treatment medical services provider, operates an inpatient unit that offers both day and continuous hospitalization, as well as an outpatient unit. It also includes a laboratory and the medical imaging department. This acquisition was announced in October. We expanded our national footprint basically in the southern region of Romania, in Tulcea, again a geography in which we were not present before. This transaction was finalized in January and will be integrated in our books starting with February 2024, so it is not included in our presentation for today. VP Med, which is located in Hungary, is a clinic specialized in advanced varicose veins treatments, including laser and radiofrequency surgery.
This acquisition was concluded in September and was meant to add more strength to our presence in Hungary and to create operational synergies with RMC, which is our clinic that we acquired since 2019. In terms of organic development projects, we opened two hospital units by the end of this year: MedLife Craiova Hospital, which is a multidisciplinary hospital with 3,400 sq m and an investment of nearly RON 6 million. There are two stages of development. The first stage was opened in October 2024 and focused on the outpatient clinic and the day hospitalization unit. The second stage that will be finalized in 2025 will include continuous hospitalization with an operating block and an intensive care unit. It will have a capacity of 87 beds, including 35 for continuous hospitalization, 7 for intensive care, and 45 for day hospital care.
This hospital will offer advanced surgical capabilities, including a digital operating room and a functional emergency room by April 2025. The second unit, which is a larger one, Medici's Hospital in Timișoara, is the first digitalized hospital in western Romania and one of the most modern and performing private medical units in this country. It is a 6,200 sq m facility following an investment of RON 25 million. It is equipped with 120 beds, out of which 15 are dedicated to intensive care. The hospital has 10 operating rooms, five of which are part of a modern operating block equipped with clean rooms, two for day surgery, and three for the maternity department.
In the other lines of business, namely the wellness division, we have also opened two new fitness centers in Bucharest, while in terms of clinic division, we opened two additional Mind Care centers in Craiova and Constanța. On the side of outlook for 2025, we plan to finalize the announced projects, including the new radiotherapy and oncology center in Bacău and the new hyperclinic in Pitești, which will be functional in the second part of this year. We will expand the portfolio of services in the corporate division by integrating health and wellness subscriptions in order to provide an integrated service package that aims to bring each patient's healthcare and overall lifestyle to the next level. We also aim to launch the first imaging research of a private Romanian company in which to include our extensive networks of 40 MRIs and 30 CTs.
In terms of acquisition, the approach will be similar to the one of this year with a prudent approach. We will keep an eye on new M&A opportunities, both domestically and in neighboring countries. Nevertheless, we remain focused on net debt to EBITDA ratio and, of course, we'll pursue only acquisitions that will not affect this indicator. In this regard, we have also proposed to supplement the syndicated loan with a maximum of RON 15 million, and we hope to have it approved by shareholders in March. Moving to the results of this year, to the consolidated statement of profit and loss, 12 months 2024 pro forma results versus the same period last- year, we can see that gross sales have increased by 25%, reaching, as mentioned before, RON 2.76 billion. Operating expenses have increased by 13.2%, reaching RON 2.4 billion. Corresponding operating profit has increased by 75% to RON 160 million.
Pro forma EBITDA, after an increase of 43%, reached RON 412 million and 16.1% pro forma margin. If we look in the same period last- year, we will see 13.1% in the same period last- year and 14.4% on IFRS basis this year. Pro forma net result of RON 33 million and 1.3% pro forma net result margin, 0.7% on IFRS basis, while on a loss position in the same period last- year of minus 0.2%. On the next slide, in terms of the bridging revenues from IFRS figures to pro forma figures, just to recap what means pro forma, so we have almost RON 45 million normalization adjustment from the acquisitions, so as if the acquisition would have occurred on the 1st of January. This is mostly explained by Antares Clinic, Euromedica, and VP Med for the period January-September, October being basically the month of consolidation.
We have Personal Genetics for the period January to April, with May being the month of consolidation, and MedVarix, which is a smaller unit, for the period January to May, June being the month of the consolidation. After that, the reclassification of approximately RON 20 million corresponding to national health program for chemotherapy drugs, which is basically netted to operating expenses. In terms of the bridging EBITDA, also from IFRS figures to pro forma figures, we have RON 7.6 million, which is corresponding normalization adjustment from this acquisition, basically EBITDA for the period before consolidation, plus RON 13 million one-off expenses, which are mostly related to the newly launched units further lost until the opening, most significant being the two hospital units, as well as one-offs related to M&A and other projects. Moving next, in terms of quarter-on-quarter EBITDA evolution, we have included in the presentation the period since 2022.
We can see that we had constant improvements in EBITDA levels in the past two years, even though important to mention that we had integrated throughout this period new units with negative contribution to EBITDA in the reporting period because, of course, we opened hospitals and they have a longer period until they reach break-even. Looking at EBITDA margin also here, it can be noted that we have increased with approximately one percentage point, I mean with more, one or even more percentage point in margin in each quarter compared to the previous year, of course, taking into account the seasonality, which is typical for healthcare services. In terms of revenues, we managed, as you can see, during the past three years to increase the platform quarter-on-quarter.
This was both through organic development projects and the new capacities that we have created, but also through acquisitions and a strong demand ultimately for our services. Moving to evolution of each business line, it can be seen that clinics remain the main sales units of the group. It accounts for almost 38% in total group. We have a growth of 23% year-on-year. This is explained by a 13% increase in the number of visits and almost 9% increase in the average fee. Growth here is explained apart from the demand of medical services, but also we have M&A integrated here because Antares, Euromedica, and VP Med, which entered in October, so we reflect three months of their businesses as well. Stomatology with a smaller share of 5% share in total sales, and here sales slightly increased during the period with a 3% increase as compared to the prior- year.
The next one in terms of increase, or the first, sorry, in terms of increase and the second in terms of size is hospitals, account for 25% share in total sales and a growth of roughly 38%. This was sustained by the increase in the number of patients by almost 20% compared to 2023. Here we have multiple reasons. On one hand, the acquisitions, the consolidation of North Hospital that started in April 2023, and Euromedica Hospital, which started in October 2024. We have investments that we have made constantly in technology and equipment in our hospitals in Bucharest, Cluj, Sibiu, and Brașov, here including Da Vinci Robots. We have a network of seven Da Vinci Robots as of today. The opening of Craiova Hospital and Timișoara Hospital to a lesser extent, of course, at the end of this year.
Looking at the average fee, we had an increase by 16% coming as a mix of increasing prices, but also the mix of services, the increased complexity of the interventions following the investments that we have mentioned. Looking at laboratories, they represent today 11% of our total sales with 28% growth year-on-year. 18% is coming from the number of lab tests performed, while 8% is the increase in average prices. Looking at the reasons, increasing the number of tests was sustained by increasing all our laboratories, both under MedLife brand or Santa Maria brand, which is the second brand with addressability mostly to patients that are subsidized by the state, but also important and notable increases in volumes in the division of molecular biology and genetics.
The increase in average prices was also coming from increasing prices that, you know, we did some price adjustments at the beginning of 2024, but also this mix of tests performed. Corporate division with a similar share of 11%, a growth of 14.4% in revenues, which was sustained mainly by price adjustments that we started since the beginning of 2023, and we continued basically in 2024. We have a base effect from 2023, but also the steps that we have taken during 2024. The last one is pharmacies with 2.3% share in total sales, a growth of 14% in revenues, which is mostly explained by an increase in the average ticket per client. Moving to operating expenses evolutions, operating expenses decreased as a percentage of sale from 96.4% in 2023 - 95.1% in 2024.
Looking at the percentage out of sales, we can see some shifts which are also observed in variances on business lines. We can see that we have a decrease in commodities with 1.1 percentage point of sales following the decrease of the distribution company and the pharmacy's share in total group, while strengthening hospitals and laboratory divisions, which led naturally to an increase with 0.7 percentage point of sales in consumable materials and repair materials. Looking at the salary side, we had basically increasing revenues on the same fixed cost structure. Salary and related expenses have decreased from 25.4% in 2023 - 24.7% in 2024. We did have some salary adjustments also in Q3 2024. In terms of consolidated statement of financial position, non-current assets have increased by almost 13%.
This is mostly explained by completion of last year's projects, the investments in the new hospital units, and corresponding medical technology, but also M&A. Financial debt has increased also by 8%, leading to an overall increase by 8% in net debt levels. We did some utilizations in order to partially finance investments and M&A. Nevertheless, in terms of net debt to pro forma EBITDA ratio, you can see that we have deleveraged in 2024. We have decreased throughout this year, reaching a 3.8 times level at the end of this year, coming from 4.6 at the end of. As for outlook, we aim to keep this ratio below 4. The last one, a snapshot on the consolidated cash flow, net cash from operating activities amounted to RON 276 million, which is 51% higher compared to the same period last year.
Net cash from financing activities amounted to RON 36 million, so we have inflows but also outflow. RON 300 million were used in investment activities, both regarding property, plant and equipment, but also the M&A that have been finalized. This is it. This is my presentation for today. Of course, we expect your questions. Thank you so much.
Ladies and gentlemen, at this time, we will begin the question and answer session. You can submit questions through the platform in the Ask a Question section or via telephone by dialing one of the numbers provided and pressing star followed by One on your telephone. If you wish to remove yourself from a question queue, then you may press star and Two. Please use your hands when asking your question for better quality. Anyone who has a question may press star and One at this time. One moment for the first question, please. The first question comes from the line of Graham Brown with Wood & Co. Please go ahead.
Hello. Three questions, basically. First of all, a bit of housekeeping. Could you please help guide us for M&A, sorry, for CapEx calls for 2025 and 2026? That's the first question. The second question is the newly opened hospital units. What was their negative impact on earnings in 2024 as a whole? What would you expect for 2025? Are these units going to be break-even or even profitable? The second question is with regard to plans for new clinics. Aside from what you mentioned, are there any plans to open up any more hyperclinics in 2025?
Hello, Graham. Thank you for the questions. Good to hear you. I will disappoint you a bit regarding the first one because, as of now, it's a bit early to talk about the CapEx for 2025 and 2026. We plan to come with this information once we make steps towards publishing the budget. We will get back to you once we will have this plan finalized. On the side of hospitals, my comment would be that we had a large hospital running in 2024 that produced a negative effect in our EBITDA nevertheless. I am talking about North Hospital here, the one in Bucharest. This is a unit that will enter break-even in 2025. Let's say that we have a neat effect in 2025. In 2025, we will have Craiova and Medici's Hospital to sustain, let's say. They together will contribute a bit with a negative result, but not that significant as was Pro Vita.
All in all, we will manage in 2025 to see a slow increase in margin, considering that we will have a better hospital here in Bucharest, but a negative result coming from those two. That's what I wanted to say. What to expect macro in terms of budget. Hope this is good for you. In terms of clinics, you asked about our development. We have this outpatient unit started since 2024, the one in Pitești. We meant to have it operational by the second part of 2025, let's say. We don't have other plans. We have only the radiotherapy and oncology unit in Bacău, which is under MedLife Brand and is part of this oncological platform. We have this hyperclinic in Pitești, which are projects that we have started and we aim to finalize.
Other than that, in terms of our development plans, we aim to be prudent, not to start other new units. Nevertheless, if in terms of M&A opportunities, there is something in a geography in which we are not present, we would like to see that opportunity. Here I have in mind Bistrița or Buzău, cities in which we are not present yet with outpatient units. I'm sorry. Which cities? Bistrița and Buzău would be on our radar.
Gotcha. Just to get back to my CapEx question, most recently, CapEx has been running, let's see now. CapEx excluding M&A has been running around 9% for the last two years. Should I expect a similar rate for 2025, or will that be coming down? If you can answer.
Yes. I would say to have a bit of patience to come with the CapEx because it's a bit early to make an assessment about the percentage.
Okay. Okay. Thank you very much.
As I remind you, if you would like to ask a question, please press star and One on your telephone. There are no audio questions at this time. I will now pass the floor over to management for any closing, excuse me, for any written questions. Thank you.
Thank you again for participating today to our presentation. I will end today with a few ideas. Number one, we will be very keen to keep the ratios that we just succeeded to regain during this year. We would like to slightly improve the margins to continue to improve the margins and also to keep the debt ratio under four.
Secondly, we do not have too many projects today because, as Alina mentioned very well, there are just a couple of cities that we would like to extend our outpatient unit around. We have made also lots of investments into robots this year, especially in the hospitals where we are now. We have invested a lot. Part of our CapEx that we invested is now there. Even there, the capacity of growing and investing into hospitals has been limited by the investment we have done in the previous two years. To look at the results of the previous year, do not forget that we succeeded to grow, not less than 17% only organically during 2024.
Also, we have not emphasized enough the fact that we are by far the largest outpatient provider and diagnostic platform in Romania with more than 100 equipments for big imaging like MRI and CTs and other machines for mammographs and so on. We will have this year, as we have announced in our press release, some new products on the B2B to corporate market. Especially, I think we are in an excellent position to give a unique position, actually, to give to the corporate market some new products for lifestyle, healthcare, sports, wellness. I think that's going to be a new trend, not only in Romania but in the region and maybe why not in the world because everybody goes to the gym, everybody wants to monitor their health and so on, and nutrition, mind.
This is going to be the next stage, and we have invested already in that. Due to our investment done in the past two years, we are in that position to give this kind of services. Not the least, except the ratios, I want to point the fact that MedLife has invested a lot in oncology. MedLife has invested a lot in hospitals. That means we are less exposed to any kind of economic downturn or geopolitical downturn because most of the services MedLife is offering now, comparing with three or even more five years ago, are services that cannot be postponed to the next economic cycle or are offered to the clients that they need that urgently or they need that for a chronic disease. These are very important to our structure.
We position ourselves in such a way to be less exposed to any waves of any kind around. This, I think, is important to point out for today's presentation. With this, I am telling you, have a nice weekend. Thank you again for participating in our presentation. We hope to, we are here, of course, for any additional questions that you may raise. Thank you very much and have a good evening.
Ladies and gentlemen, the conference is now concluded. You may disconnect your telephone. Thank you for calling. Have a good afternoon.