Dear ladies a nd gentlemen, welcome to the conference call of MedLife. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. If any participant has difficulty hearing the conference, please press star key followed by zero on your telephone for operator assistance. I now hand you over to Mihail Marcu, President of the Board of Directors of MedLife Group, who will lead you through this conference. Please go ahead.
Good evening. Thank you very much for participating today at our conference for the results of the last year and for the last quarter of 2021. With me here today, of course, are my colleagues, Mr. Dorin Preda, that is a Board Member and the Treasurer of the group, Mr. Adrian Lungu, the CFO, and Alina Irinoiu, actually the person that will go with the presentation after me now. She's the IR Manager and also assistant to our CFO. Thank you very much. Please, Alina, go ahead.
Thank you, Mihail, for the introduction. Good afternoon, everyone. I'll start the presentation for today with some highlights from 2021 with the key messages and outlook for the future. After that, we will switch to the financial overview in terms of consolidated statement of profit and loss, consolidated statement of financial position, and the last one, consolidated statement of cash flow. A bit of a snapshot for the profit and loss evolution in 2021. In terms of pro forma consolidated sales, you will see MedLife Group ended with RON 1.6 billion in 2021, representing an increase by 51.6% compared to the same period last year.
From an IFRS point of view, IFRS consolidated sales were of RON 1.4 billion, representing an increase by 32.9% compared to the same period last year. In terms of like-to-like increase, without the companies acquired during 2021, the increase was of 24%. Moving to the performance side, the strong operating performance was reflected in line with the strategy of recent years. IFRS EBITDA margin was of 20.1%, while on a pro forma basis of 18.9%. IFRS EBITDA in terms of absolute values was 1.4% higher compared to the same period last year. While in terms of pro forma basis, 1.5% higher.
It's important to add here that the pro forma EBITDA margin reflects the full effect of the acquisitions that were announced and completed during 2021, as well as Neolife, which was completed in February and will start being consolidating, consolidated with 1st of March, 2022. Last but not least, the net results. Pro forma net results increased almost two times as compared to 2020, leading to 7.5% pro forma net result margin. In terms of key messages of 2021, MedLife Group continued its dynamitc strategy of expansion through acquisitions. The group also consolidated its profitability margins despite yet a still pandemic environment.
Investments were directed towards supporting strategic objectives aimed at research, strengthening the area of radiotherapy and oncology, amplifying the process of digitization and territorial expansion. The budget invested last year, as you will further see, in the cash flow, exceeded EUR 13 million. All business lines followed an upward trend in 2021, with notable performances for the division of laboratories, outpatient units, hospitals, but also for dentistry and pharmacies. Overall, last year, MedLife's activity had a strong impact at the level of the entire medical system in Romania, with no less than 14 million services being offered nationwide for analysis, investigations, diagnosis, treatment, and surgeries. We focused on quick access to medical interventions for chronic and acute patients in the context of limiting activity in the state hospitals.
There was an intense activity also in the outpatient line of business related to monitoring chronic pathologies and patients who went through COVID. The activity of the corporate division was also consistent and dynamic. It was focused on the support offered to large companies, but also to small and medium enterprises and startups for the safety and health of employees during the pandemic. On the research side, this played a significant role for the group, and investments made in research activities exceeded EUR 1 million.
2021 marked the consolidation of the oncology services segment after the group has recently received the Competition Council approval for the acquisition of 50% of the shares of Neolife Romania, which is the largest transactions carried out by MedLife last year. In addition to this partnership with Neolife, MedLife Group announced several more transactions in 2021. By listing them, I would say Veridia, which was in March. Medica Sibiu started to be consolidated with first of May. The group of pharmacies in July. Pharmachem Distributie Company in August. Stomestet Group, which is a group of three juridical entities in Cluj, on the stomatology side in November. Oradent in Oradea in December, and the last one, Centrul Medical Irina, from Galați.
In 2021, we focused also on digitalization. We want to digitize the patient experience in relation to the interaction that we have. At a B2C level, we have invested in new tools that help patients access anytime and anywhere the entire medical history, and even the ability to see them in dynamics or buy products from the shop section. All these features being available in the application. In terms of B2B side, we have invested in new digital products that help us in this inter-interaction with the employer, but also with the employee. In addition, internally, we have digitized a lot of internal trends and processes.
On a different topic, but also of importance for us is that following the quarterly review announced on Friday, 18th of February by FTSE Russell, MedLife will be included in FTSE Global All Cap indices starting with 21st of March. Moving to the next slide, you will see that I presented the operational KPIs that supports the presentation a bit earlier regarding the evolution of all business lines. You see increase in traffic and in revenues as a whole for each of our segments. If led by on a percentage basis, the champions are the stomatology with almost 52% increase in revenues. This is coming from the organic development and acquisition that was very intense in 2021 for DENT ESTET Group.
They basically expanded in Brașov, in Cluj, in Oradea and in Ploiești. The next one is coming from the pharmacies with 35% increase in revenues. Here again, a contribution was brought by the acquisition of the new six pharmacies brought in the group. In other business line, we have included Pharmachem Distributie, the pharmaceutical distribution company that comes with different key operation key performance indicators, and this is why we didn't mix it with the pharmacies. Moving to the next slide. In terms of outlook for 2022, but also onwards, we are in ongoing discussions with the three large and medium-sized companies, but also with five other small companies to join the group on the M&A side.
We aim that most of these discussions to materialize this year. As already announced, the investment budget planned for the next period is between EUR 100 million and EUR 120 million, while approximately EUR 50 million-EUR 70 million are to be allocated for acquisitions in Romania, but also in the region. Development and expansion plan for 2022, it's concentrated towards Sighișoara, Târgu Mureș, Constanța, openings of new clinics in Muntenia and Transylvania, but also in other regions of the country. The aim being to consolidate the national coverage in the next two years. MedLife holds the largest network in Romania, with presence in over 25 large and medium-sized cities in the country, being the only private medical provider with true national coverage.
The group will accelerate the growth of the second brand, with a focus on patients who adhere to National Health Insurance House backed medical services. For this year, Sfânta Maria will also expand its presence in several small and medium-sized cities, both following a strategy to acquisitions or organically. In terms of MedLife Park, the ambitions for 2022 are to launch a new state-of-the-art Hyperclinic and to expand the laboratory of molecular biology and pathological anatomy. The company also aims for a much larger unit to accommodate the research division that will expand its activity in the oncology area this year.
The next stage of development of the medical hub is planned for 2023, when MedLife intends to put in operation new surgery rooms and expand the hospitalization capacity of the largest hospital in the group with another 150 beds. MedLife Park pilot project will be replicated in the medium and long term in several large cities in the country, such as Brașov, Sibiu, Cluj, and Arad. In addition to M&A and organic development projects, the focus will still remain on digitalization, which is one of the strategic directions for the group's future development. Moving to the consolidated statement of profit and loss. When we are looking at 12 months, 2021 pro forma figures as compared to 2020 figures, sales increased by 51.6%.
In terms of operating expenses, they increased at a lower pace by 49.4%, reaching RON 1.4 billion. In terms of operating profit, an increase by 71.6%, leading to RON 187 million, which is a margin of 11.5% pro forma margin as compared to 10.1% in the same period last year. In terms of EBITDA, it has increased by 45.4%, reaching RON 308 million, representing a margin of 18.9% pro forma margin as compared to 19.7% in the same period last year. Here the full effect of the acquisitions announced during 2021 and finalized is reflected, as I mentioned before.
Pharmachem is indeed playing a role being a distribution company, which is with lower margins than MedLife Group, obviously. So the full effect of Pharmachem is integrated here. 93% also increase in net result, leading to RON 123 million, which is 7.5% pro forma margin as compared to 5.9% in the same period last year. Regarding the split of net result, it is distributed 91% to group owners and 9% to NCI. The pro forma adjustments that we have included here are related to the acquired company, for the period that they didn't were in the consolidation. So we have RON 20 million coming from Veridia. So for the two-month period, Medica Sibiu for four-month period.
We have CED Pharma Group, six months, Pharmachem, seven , Stomestet 10 months, Oradent 11, Neolife and Centrul Medical Irina for the full period. Moving to the consolidated statement of profit and loss. The operating expenses evolution is quite interesting in the sense that the dynamics is obviously changing. You will see 1.1 percentage points releasing EBITDA margin coming from a decrease in consumable materials and repair materials with 1.3 percentage points of sales. Here you will consider decreasing trend on PCR testing, but also the Pharmachem consolidation. Increase in commodities with 4.1 percentage points of sale, once again due to the consolidation of the pharmacies and the Pharmachem Distributie. Decreasing third-party expenses and salaries expenses with 1.9 percentage points of sales.
This is a combined effect of several reasons. The one is the cost-cutting measures implemented in 2020, also the change in the mix of services provided, including the consolidation of the wholesale company. In terms of consolidated statement of financial position, there are no significant changes in the dynamics of the balance sheet. All figures are on an upwards trend, and this is expected coming with the consolidation of the companies acquired, the seven acquisitions performed during 2021. I wouldn't stress that much anything from here unless in the questions and answer session, so you need something in particular. I would jump to the debt position.
From a net debt to EBITDA ratio, we can notice the same decrease that was there in the third quarter as well. The net debt to EBITDA ratio is of 2.1 with a very, very small increase in net debt during such period, so of 0.2% from 2020 to 2021. In terms of consolidated statement of cash flow, it was characterized by increased operating performance. There is a 1.7 x increase in net cash coming from operating activities, from RON 128 million to RON 214 million .
Quite constant and in line with the evolution of the group in terms of investing activities, a 30% increase in investments year-on-year, from RON 112 million to RON 146 million. All in all, leading to a cash and cash equivalent position for this period of RON 129 million. As an additional detail for the investing activities, you will see on the right-hand side the breakdown of the investment performed. In the sense that there is a split in investment in business combinations, the purchase of intangible assets, and also the purchase of property, plant, and equipment.
52% going to business combination, RON 52 million going to business combinations, RON 5 million in intangible assets, and the remaining of almost RON 88 million were dedicated to the tangible asset side development, organic development, and so on. I think this is my presentation for today. I thank you very much. I propose to jump to the Q&A session. Thank you.
Ladies and gentlemen, if you have a question for our speaker, please dial zero and one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you find your question is answered before it is your turn to speak, you can dial zero and two to cancel your question. If you're using speaker equipment today, please lift the handset before making your selection. One moment please for the first question. The first question is from Brent Thill with the company Jefferies.
Hello. Just a few questions, please. First of all, very simple one, with regards to the other revenues line for the full year. How much of this was drug distribution out of this RON 88? Yeah, out of this RON 88 million.
Was what?
Second question. Yes, hello? Hello?
Sorry, Brent. I was just repeating the last slide because I didn't understand how much of the operating the income was.
No. in other revenues, which was RON 88 some odd million for the full year, how much of that was distribution?
Okay.
Oh, okay. I see your question.
Yeah.
Okay.
My first question. Second question is, with regards to, third-party expenses, and I guess in particular, cost of, physicians. Has the policy with paying physicians, changed in any way? Because in the fourth quarter, I noticed a fairly significant jump in the, percentage of expenditures going to third party going to third parties. If you could comment on that and if the fourth quarter was just volatility or if that's more of a trend? The last question with regards to your, investment budget, that EUR 100 million-EUR 120 million, that is over what period of time, please?
Okay. I will start with your second question because I have it in front of me now. The answer would be no. There is no change in the policy. It is related indeed to the change, not in volatility. It's basically a change in the mix of the group, a consolidated one for the third quarter, for the fourth quarter, if you want to see it this way, because in the third one we missed one month of Pharmachem. Things are looking slightly different. On the other side, you will see an increase in the performance of the outpatient units that is usually with a higher connection with doctors, with collaborating doctors.
Only these type of things that can contribute to a change in the mix, not related to a change in our policy approach.
Okay. I'm sorry. Could you just repeat that last part? Which business has a higher %? Which part of the business is using a higher percentage of external doctors or doctors paid on a third-party basis?
Not necessarily a higher, but our patient unit performed well. There is a slight connection between the two.
Yeah.
Okay. Gotcha. Although I thought I've adjusted for that. Okay, thanks. The other two, please, if you could.
Yes. You are referring to the distribution, for the full period. Percentage out of total RON 88 million, right?
Yeah. How much of that-
How much?
Yeah. How much of that RON 88 million is drug distribution?
Not, having right now, a split of the two, in first quarter and the second quarter, we have an average of RON 5 million, and this is something that is applicable for the next period also. The rest of the business is RON 30 million out of RON 88 million. RON 30 would be, yeah, 35%. The difference is the distribution.
I'm sorry. You said 35% of that 88 is other revenues excluding distribution?
Yes. Yes.
35%. Okay. Thank you.
Distribution covered.
The time frame for spending that EUR 100 million-EUR 120 million?
Yes. It would be a bit difficult to respond accurately because usually acquisitions tends to happen depending on the market and on the context, and there's more now with the geopolitical context. The time horizon would be two to three years to complete the acquisitions that we have in mind for this allocated budget. I would say two to three years.
Okay. Got it. Thank you very much.
Thank you, Dan.
The next question from [inaudible]. Your l ine is now open.
Hello.
Hello.
Hi. I have a quick question. Just to make sure I understood, in the RON 88 million that are other revenues, around 35% come from drug distribution?
No, no. I said the other way. I computed how much amount is our other revenues, which is mainly stem cells bank from the total. I said we have 35 coming from distribution, 35%, so the remaining 65% is the distribution business line.
Okay. these other revenues, what are, what is in these other revenues included?
Revenue coming from the stem cells bank.
Okay. Thank you. Just, looking at the pricing, I see a decrease in the average fee for laboratories and for pharmacies. Can you explain a little bit, what happened here and, what should we look forward? Thank you.
Yes, indeed. In terms of laboratories, the average fee decreased naturally with the decrease in the PCR test performed, from 38 to 30% to 30 on average. In terms of pharmacies, was a dilution of the sale for the client after we have bought Ced Pharma. The chain of six pharmacies has a different profile, and they are located next to public units. They came with a larger number of clients, but a lower ticket. Basically, we say that from now on, the dynamic should change to this reality.
Okay. Thank you. I have no further questions.
At the moment, there are no further questions. As a short reminder, if you would like to ask a question, please press zero and one on your telephone keypad. We have no further questions. I hand back to the speakers.
Thank you very much for being with us today, and for listening us. I know that we are passing quite, let's say, challenging times with this geopolitical situation of Romania today. We are very confident that we are a major country, and MedLife should keep the profile to still acquire and use all the opportunities to grow for the time being. It not doesn't mean that we accelerate, it doesn't mean that we slow down. We'll just do what we are doing today. We have, as Alina has mentioned, three medium to large transactions ongoing. We have other 5 that started also last year. We hope to finalize most of them. As you know, that some of them they go okay, some of them they stop.
We are dealing with families, and we found that they have their own personal pattern into it. Of course, we hope to finance all of them, at least the majority. Also we are growing. We feel as we are also working on this medical part that I hope in the first half of this year, maybe in July or August, we'll finalize the first move of some of the ambulatory. Also we will start working on the hospital unit here in the new building, mostly moving some of the pediatric activity in the same place in this hub that is in the MedLife Medical Park. These are the main things about us, and thank you very much for being with us today.
We look forward to the budget that we are going to present in one month by now. We don't intend due to the geopolitical to change the budget that has been prepared already in December, which is two-digit growth in the organic growth of MedLife. Of course, except any kind of COVID and PCR activity, because that one is not something that we budget as long as we don't have a perspective, a clear perspective on the income to come from there. That's what more or less what you are going to see. That also we have this investment that you are asking, some of you are asking when it's going to be dispersed.
We hope at least half of this amount to be used by the middle of this year and the rest to be seen also and to be calibrated on the, at the end of the day, on the geopolitical of the region. Thank you very much for being with us. Have a good day.
Ladies and gentlemen, thank you for your attendance. This conference has been concluded. You may disconnect.