Earnings Call: Q2 2021

Jul 23, 2021

Hello. Good morning, everyone. Welcome to our Q2 presentation. This is another fantastic and strong quarter. I would like to start with paying tribute to all our absolutely fantastic staff, It continues tirelessly after now soon 18 months of pandemic to provide reliable and accessible services to all which I think is remarkable under the circumstances. We have no doubt had the most challenging quarter from a public health perspective behind us. We had unprecedented levels of infections in India with knock on implications for our hospitals in the first half of the quarter. And likewise, elsewhere, we have seen significant impacts on our operations from the infections. Obviously, this declined towards the end of the quarter. Underlying business growth is really strong and robust. That is a really key takeaway message to everyone today. While these results are significantly enhanced, obviously, by significant additional COVID related revenue and contribution. One should not miss the fact that underlying business is strong, robust and profitable. So overall revenue, we came just short of €350,000,000 For the quarter, that's up an impressive 75.5%. We've had significant foreign Exchange headwinds that we will speak more about. So from an organic growth perspective, that's even higher, 79%. And the point I made with underlying business, that was came in at 267,000,000 so grew by more than 40% or organic by 42%. As you see in the report text, We have also tried to show an illustrative underlying growth. It's not so easy to illustrate for you, what is going on beyond COVID. But in that table, we show you an underlying illustrative year on year growth when we pull out the last year's impact of about 10% despite very negative foreign exchange headwinds. We estimate that to be a minimum of 15% as we can't really in any way reliably estimate in the current quarter how much business we are now losing out due to COVID. But I think that still gives you a good indication of where we are relative to last year. Looking at the specific COVID 2019 revenue for the quarter, that was up to more than $80,000,000 so significantly up from the prior quarter where obviously, as we will come to most of the additional revenue in this category is coming from versus the prior quarter It's coming from our Healthcare Services side and the Medicover Hospital India unit, as I already mentioned. We have a very strong pickup in our private pay fee for service business with over 120% growth versus prior year and that's now up to more than 60% of group revenue. And Point already made, you have 7.5 percent euro exchange headwinds within these numbers despite the rather strong figures. And just commenting, you see the 2 pie charts at the bottom that we show every Time may just be worthwhile to see the very large share now of fee for service that has continuously grown, I think, every quarter as a proportion of the overall pie since we listed. We have the funded business, which you see is back to growing 12%, which is really strong. I'll come back to that in a moment. You recall this time last year, the Q2 last year, We had a softening obviously in that business as in all other businesses, but then that has rebounded very strongly. And you also see in our public business being 20% of the total, that is up by more than 50%, obviously, on the back of a lot of the testing that we're doing being publicly reimbursed. On the geographic split, maybe worthwhile just to draw attention to the fact that India is now up at 12% of group revenue. So you see ahead with Romania as our 3rd biggest geography after Poland and Germany. And obviously, all of the geographies growing very strongly. So moving on. So This fell through to very strong profit growth with EBITDA up north of SEK 70,000,000 for the first time in our history. So SEK 71,800,000 for the quarter, a 20.6% margin. And the underlying business, which may be the most important here to look at, being almost €41,000,000 So not far away from doubling from last year and margin of 15.3%. Now that's up 3.5 percentage points from last year. Now it's important sometimes memory is short. So this time last year, we had the Q2 reporting 2020 when things looked rather dire. And you recall that we did very extensive cost reductions in that quarter before we knew sort of where the territory was heading. And of course, if you if one really wants to understand what's going on year on year, we need to take that into account. So that was an additional you see 7% of Q2 margin last year, which were The temporary cost reductions, so overall, we are more than 10 percentage points up in EBITA margin, which I think illustrates the fact with the strength in the underlying business. And the COVID related contribution around €31,000,000 so a little bit more than 5 percentage points of the total margin and also EBIT growing very strongly. Obviously, percentage wise, The further down the profit and loss statement you come, the larger are the percentage growth versus prior year as the base is lower. And then going into our divisions, starting with Healthcare Services, again, super strong EUR186,000,000 revenue, 68% up. Organic growth just short of 70%. Again, I think I've said now for 3 or 4 consecutive quarters. I don't know, however, many times in your life one will report organic growth like that and somehow Each quarter it has gotten stronger, so we will see how long that will continue. The revenue from the underlying business is just short of €150,000,000 so up 35%. Again, When you read through the longer report text, you will see that we have tried in order to illustrate for you look at the illustrative underlying growth. And clearly, In Healthcare Services, we still have a situation where the underlying business is not back to where it was pre COVID. So we show there illustrative underlying growth of around 4%. And we estimate as we write in there That should be a minimum of 12%, looking at what we think is still not recovered in that business. So I think it's fantastic to see these kinds of result in this division despite the fact that we are still not back at them pre COVID levels in the underlying business. As I will talk about later On the DX side and Diagnostic division, there we see that underlying business is basically back to where it was before the pandemic hit. So we do have a slightly different situation in 2 divisions that's important to remember in terms of recovery from the COVID impact. So here, revenue from COVID jumped up to EUR 38,000,000. So that is a much higher level than we have previously reported in this division. And point already made that the large Proportion of that increase is coming out of Medicover Hospitals India that did an absolutely phenomenal job to contribute to the sort of Indian situation and deal with the incredibly stressful situations That was a fact all across India and certainly in the areas where we are operating. So fee for service in Healthcare Services division is now up at 55% of revenue and again just outstanding growth numbers. Important is our integrated health care model, which is sort of largely the anchor in this division. This is how we started the business 25 years ago and for many, many years was basically what this division did. Now as you see on the left pie chart at the bottom, it's around a third of divisional revenue, but still obviously really very important. It's a very stable business. It's growing very nicely. You see we took in more than 35 1,000 new members in this quarter, which is a significant number. And we're up some 10% versus the prior year year quarter, so more than 1,400,000 members. So don't underestimate the importance of seeing that growth number. Again, as you remember, this is a deferred revenue model, so we bring almost all of this revenue with us to future subsequent quarters. So that's a really important number. Within the fee for service area, as you know, we have Dental, we have all kinds of things. Dental performed particularly well in the quarter. That's obviously a very prioritized growth area for us where we're investing heavily, both in organic expansion in Poland as well as M and A activities. We've seen good increase the patient admissions in our hospitals, albeit that elective surgery It's still an area where we're not yet back, where we were pre pandemic. And particularly, for example, in India in our hospital business that when the COVID situation dropped off in June, which is good from a public health perspective. It's not the fact that you immediately from one day to another Replace your COVID admissions with elective surgeries. So that's always appeared of a number of weeks, month or 2 until you replace that. And then of course, Medicover Sports. So the gym and wellness business, that was very significantly impacted. In fact, that was closed, as you know, and that reopened in Poland towards the end of the quarter, but of course, as a quarter total, that was still heavily impacted. And again, commenting on the pie charts, I made the point on the funded business being down to a third. You see the public revenue in this division remains at about 10%. And again, noteworthy perhaps to say here is you see India It's up now representing just short of a quarter of divisional revenue. So it's good to see we build scale in our Indian business, which certainly is a condition for why we started to invest there a number of years ago. And then looking how this has sort of dropped through in Healthcare Services to contributions and profits, So good, good profit growth. So EBITDA up to $33,400,000 so margin up to 18%. In fact, the underlying business, you actually see a margin drop here or contraction to 14.5percent.16.4percent. Now Very, very important here to remind ourselves again being what we did last year. You recall We have quite different contribution profiles of our 2 divisions. So whereas Profits dropped very significantly in the Diagnostics side in the Q2 last year. It certainly dropped in Healthcare Services, but less so because this is less sort of contribution sensitive as opposed to the Diagnostics side. However, We did cut costs very significantly. So when looking on year on year, you clearly need to take that account and pulling out the cost reductions, which were one off for the quarter last year, were up some 400 basis points in EBITDA year on year for the quarter. So and again, I remind you that, that is despite the fact that we estimate Here, we have significant revenue in the underlying business, which is not yet back. So that's a really strong performance just to underline that, so everyone is clear on that. We estimate $12,000,000 of COVID related contribution of 3.5% of the margin. Clearly, fertility services remains impacted by the COVID situation and in India. For example, as India was so heavily impacted, that was largely shut During the quarter, fertility in Poland did okay or actually very good and not so much impacted. And So again, it depends a little bit from geography to geography. Other areas were not impacted at all, such as maternity services, for example. We did a major extension into a new hospital unit in India in Visag on the East Coast of India. That's a city where we already are located. So this is a good extension, a very sizable facility. So a 500 bed unit, so that's obviously very significant. By adding that, We could significantly fill that up with COVID patients at the height of the crisis. And we will, I'm sure to fill that up now with elective surgery as the country hopefully returns to normal. Important to point out is The utilization of our virtual care digital channels remain on a high level. So I think we made the point before that we think our customers really like that and we expect post pandemic that to remain at levels much higher than before the pandemic and that's really what we still see. Then shifting to Diagnostic Services. So fantastic growth again, 86% up to €169,000,000 92 percent organic, nothing to complain on that really. And here revenue from underlying business went up €225,000,000 more than 50% growth. Again, you see in the report text where we talk about underlying year on year growth. And here, we estimate that to be at 21% and say that we see that really being back to where it was before the pandemic hit. So that illustrates the difference in the 2 divisions. So really strong underlying growth in Diagnostic and basically normalized. And then on top of that, you have all the COVID related activities. And COVID for the quarter then in this division being EUR 44,000,000. So you see versus last year being 8, so more than a fivefold of COVID related revenue in this division for the quarter. So strong fee for service growth at more than doubling 69% of divisional revenue, super strong. And obviously, the whole sort of Medica, the genetics area, which obviously is perhaps the area of everything we do, where we are most busy dealing with the all the testing around COVID. They're doing very, very well. And one element of all of this that we have seen is that We see more and more customers across Europe outside of our current operating geographies are finding us and starting to contract with us. So that's a really positive sign. And on the Pie charts here, you can see the right hand geography. Germany obviously remains the largest geography interest. And you see Ukraine It's more than doubling, as you see. And in fact, it's now the 2nd largest geography in DX, Romania doing really well. And you see Poland also has had a phenomenal growth in terms of of geography for DX. And then, of course, with a marginal sort of contribution nature of this business and having this kind of volume put on, you get a big operational leverage onto profits. So EBITDA jumped very significantly to EUR 43,500,000 just short of 26% margin, underlying EBITDA threefolded. And if you then take into account the Cost reductions that we had lost year around that I commented on in the other division, you see We were 18 percentage points up in EBITDA. So I think that well illustrates the point that we have made many times that how scale and marginal contribution matters in the Diagnostic business. And We estimate that we had some $19,000,000 EBITDA contribution in the quarter of 6.1 percentage points of margin. So strong growth in number of laboratory tests, of course. And not to be forgotten is that we keep investing very aggressively. Joe will speak about that later on, but just in terms of our BDP network. In the quarter, despite everything else we had to do, we opened some 23 New BDPs across the region and we're approaching 800 as the absolute number in our network. Then just make the point on India. I talked quite a bit about India already. But One thing we have done or rather our colleagues in India have done has been to be really active on the vaccination front. Everyone knows how important it is to get vaccinations out in society to be prepared for the next wave. But that I think at least In our company, we are as close to certain as one can be that there will be another wave coming in the autumn. And of course, the more people are vaccinated, the more resilient we will be as individuals and societies to that. So One just can't underestimate the importance of getting vaccines out. Our colleagues in India have been phenomenally effective with this. So These pictures are from a particular drive in Hyderabad where we in one single day that we have repeated several times, have vaccinated more than 35,000 people in a single day. And now we're about 300,000 and we keep counting. We have contracted more than 1,000,000 doses, so we still have a lot of work ahead of us. This is not a for profit activity. And we do that as a cost coverage. And we see this as an important contribution to society and our role in the health care universe in India and elsewhere. So with that, I hand over to Joe to talk through the financial side of things. Thank you, Frederic. Hannah, maybe if you could forward through to Slide 12, Financials? Sure. So net interest cost, SEK 3,900,000. We have within that SEK 3,900,000 some SEK 3,200,000 which is the IFRS 16 interest charge for leases, our premises. And so our underlying debt interest about SEK 700,000 had some positive items going through as well. So that's a little bit lighter than We see it was expected on a normal basis. FX gains, euros 2,000,000 for the P and L account, Large part of that being the euro denominated leases in Poland, where the currency has strengthened over the quarter. Non cash obviously and unwinding of the weakness that we saw over 2020. Tax charge, we estimated that at 27% effective tax rate for the 6 months. We had on the Q1 an estimate of 28%. So we've taken that down slightly with a little bit of better visibility in terms of where we look for the full year. So tax paid cash wise was the SEK 9,000,000. We paid SEK 5,900,000 last time around for the 6 months. Cash flow, obviously, that's one of the themes, very strong with the underlying strong profit performance. So $44,500,000 before tax payments, increase in working capital of some just short of $30,000,000 We expanded the business very strongly, as you can imagine, and some of that money is going into financing the working capital for that. For the 6 months, just Short of €105,000,000 as cash flow before tax and increase in working capital €35,000,000 Cash and cash equivalents, that is strengthened. We're up to some Excluding our short term liquid investments from Absa's short of €78,000,000 and that's From just below €50,000,000 at the year end. We moved €15,000,000 from our liquid Short term investments into cash, so reduced that balance by SEK 15,000,000 since year end. Loans payable net of Cash and the short term liquid investments, SEK 84,300,000 as up a few million from year end as we've been investing quite heavily in both our inorganic and our organic side. So if you could go to the next slide, Hannan. Our lease liabilities, that is up some 40 €4,300,000 a large part of that is driven by acquisitions where we recognize the leases that we acquire and bring on Balance sheet that way. So that sort of makes up a quite large chunk of that 44,300,000 So top of that, we've then been adding new facilities as well in particularly in Poland. Within that number there then is the new hospital that we added, the large new hospital in Visag and that's a 25 year lease. So that's a substantial part of that increase. Our lease liabilities follow as well-being up. So that's up at some SEK240,000,000 just short of SEK 244,000,000, that's From around about SEK 200,000,000 at year end. Our capital program in terms of our organic side, we invested some SEK 23,000,000 in the quarter, About 69% of that has been growth CapEx, 31% maintenance. So as we ramp the capital Investment up, then a larger proportion of that is then going in terms of the growth side. Expansion of Citizens in India have been quite active there. Dental and clinics in Poland and some additional laboratory capacity as well and BDPs obviously. So for 6 months, we're at just short of EUR 43,000,000 in terms of capital spend, organic, and that breaks out about sixty-forty growth in maintenance. We expect to be able to continue to invest on our organic side at quite a pace. So we're definitely aiming to keep that pace of investment up. We have the facility we have the ability Invest that, we have the opportunities and the demand is there. So we're trying to grow into that. IFRS equity Strengthening there. So we came up to just short of €541,000,000 from the year end. That includes some positive translation movements, Just short of €8,000,000 Indian rupee, Rivner and Zloty have been strengthening. And It's much a story about the euro dollar movements and some unwinding of what we saw the weakness we saw last year. And liquidity very strong. So we have with our cash on hand and our available facilities, just over EUR 320,000,000 in liquidity available. So not only are we ramping up in terms of our organic capital investment, but also we certainly will be expecting to be able to deploy some of that capital into inorganic opportunities as well over the coming future. Next slide please, Hanna. So this is just looking at our targets. It's a little bit difficult here really in terms of trying to unpick this against our targets. Obviously, with the prior year comparators It's been so impacted by COVID. But for the record, you can see there 79% organic revenue growth about the euro growth with the headwinds from FX and And now 6 months up over 56%. Our adjusted EBITDA margin, Again, very strong, being supported there by COVID. But I think as Frederic was talking to you earlier on in terms of the underlying business, I think we're Well on progress in terms of making on the underlying basis our targets and being Comfortably there. And then on our capital structure, we have in a fantastic position in terms of being able to have a really strong balance sheet and plenty of capacity in terms of being able to support that organic expansion and also some inorganic expansion that we expect to see coming. So with that, Frederik, I hand back to you. All right. Thank you, Joe. And that sort of concludes our messaging. And obviously, we're happy to try and answer comment on any questions you may have today. Thank And your first question comes from the line of Paul Yurim from Danske Bank. Your line is now open. Yes, good morning. So I have a couple of questions, but if we can start On the Diagnostics side maybe, can you say anything regarding the revenue split for the different mounts in the quarter for the COVID testing, Yes. So we get a sense of how the run rate is looking now when we go into Q3 and the second half of the year? Sorry, you said the split in different kinds of tests or during the quarter? During the quarter, the different Monthly revenues from COVID testing, just so we get a sense on the run rate? No, I mean, I don't think we will go in to start to comment on the monthly run rate. We I think the point we're making is that clearly the 1st part of the quarter, So the 1st 2 months out of the 3 was quite a bit higher than the 3rd month. So I think the situation is As I write there in my commentary that we second half of the year, we expect to be lower than annualizing the Q2. However, the big uncertainty here is the This was going to happen with the delta and the 4th. I mean, as I said before, we are certain there will be another wave coming in the autumn. But we just don't know considering the level of vaccinations how that will play into our testing volume. So we're sort of being quite affirmative on that it will be lower than annualized in the second quarter for sure. But how much We just refrain from saying that because quite honestly, no one knows. I agree. Good. And another question maybe on the Diagnostic Services side, I think when I look at the underlying margin here, I think it was 19.6% now in Q2. It seems to be down somewhat from Q1's levels, which was extremely high. Can you say anything on what you're seeing on the margin side sequentially in Actually in Diagnostics side, the underlying, please. Sure. You want to comment on that, Joe? Well, perhaps we lost you, so I comment on it. So Sorry, Frederic, I was speaking into the mute button there. You want to go ahead, Frederic? No, no, go ahead, Joe. That's better you take that. Yes. So yes, growth has been very, very strong in our underlying It's been really good. Seasonality, we normally see seasonality between Q1 and Q2, but we're not it's not really there this year. It's not really surprising given the COVID impacts, that is still at some sort of level there. Some things are still going on, whether it's More or less demand or people impacted by the public systems being stressed and coming to us instead of going away. So Maybe some migrating demand or something like that. So and then we continue to invest and we've got Growth coming out of our genetics and our clinical research side. So and then we've got the FX side coming back and holding us back. So we've got a little bit of all of those things going ahead. But if you look at our business as usual margin, it's actually very strong when you look at it on a normalized basis. If you go back to 2018 or you go back to 2019, the Q2 and then also sequentially quarter on quarter, you see a drop. You see anywhere between roundabout3 percentage points drop on a normalized basis coming down. So if you look back to 2018 or 2019, and we were around about 17%, 17.5% in terms of our EBITDA margin. And now we're reporting at 19.6%. But you're quite right to observe that that's quite that's sequentially quite a reduction. I think we've got a reduction of some almost 6.5 percentage points, something like that. So You need to bear in mind that when we're estimating on the COVID side, it is an estimate. And we allocate some costs between COVID And some costs between business as usual. We changed that around a little bit between Q1 and Q2. So sequentially, it's not exactly comparable. But the estimate in terms of the margin the estimate that we do for the COVID business is not a marginal cost basis. So we are allocating some costs from the labs and the premises into the calculation for the COVID side. We changed that around a little bit in Q1 and Q2, because effectively the underlying side It was not probably a fair reflection of what is actually going on there in terms of the underlying. So maybe some of the allocation was too much weighted towards one way than the other. So it's really only to try and give you some sort of guidance. It's not an exact thing. And we're going to have to see how we come out of COVID when that goes away, how the margin settles down. But I think as Frederic said in the report, we're very confident in terms of our midterm targets and we're very happy on that. And when we look sequentially, we're definitely making very good improvement over a longer time series. Yes. That's very helpful. And then just the last question on India actually. I just have a question, what do you expect to happen now When it returns to a more normal situation or hopefully it will return to a more normal situation, how will that impact you In terms of margins and revenues, I guess you have ramped up quite a bit. So I guess you have a bit higher cost base there and now you have had Quite good occupancy. So it would just be interesting to hear how you expect that business to develop in the upcoming? Yes, I mean, I think there's sort of three things to say there. Fundamentally, we are just really, really positive and encouraged. So you can see how much emphasis and capital we deploy in India because we think it's just a really big opportunity for us. So otherwise, we wouldn't pay so much attention to it. And now short term, The first thing is to say, again, sort of repeat my initial answer to you. I mean, there will be another wave hitting India as well. The question is just when it comes. So at some stage, we're going to have our beds filled up hopefully, I'd say hopefully from a public health perspective, not as much as we saw in this quarter, but we will have that I don't want to sound like I know that for 100% certainty, but in any planning we do, that's part of the scenario. Now the longer term, which I think is sort of what you asked the mid longer term, clearly, with COVID filling it up, You get exceptional high bed utilization. So it's not really reflective what is the true long term state of nature. Now We are super confident that over time and that's not 1 month, but it's not a year and a half either. So it's a quarter or 2. We will be filling the bed capacity that we have taken on because we are We're well located, good brand, super good operator. So we have no hesitation that The capacity that we are bringing on will be well utilized. In fact, The way we have looked at this and again, I mean, the WISAG one that we put on this quarter, the reason for doing it, You can say very short term, we could take advantage and support in the COVID situation. But fundamentally, We make that expansion because it's the right thing to do. And now we were just a bit quicker than perhaps would have been if there would have been no COVID because shorter we could support with COVID, but it gave us a very good opportunity to extend the footprint. That's how I think you should sort of think about it. Okay. Thank you. Any other questions? We have 1 We have 2 Okay. Go ahead. We still have 2 questions on the line. And your next question comes from the line of Grace Lee from Jefferies. Your line is now open. Hello. Thank you for taking my question. I hope you hear me well. I have two questions if I can And maybe like third question, if there is a sort of time available at the end, I'll just jump back on the queue. But my first question is in regards to, for example, in India. If India is 24%, healthcare services growing 2%, 4%, 7%, how big Do you see India being a proportion of business in 3 years? So that's my number one question. And number 2, in regards to sort of COVID, Because organic growth of 79% and you have said 37% of that is due to COVID. Just so that we can Then how the sort of dynamic is evolving? 1st, how much of that, for example, split between fee for services because you said majority is in publicly Reimbursed, but then in terms of that fee for service split versus public and funded, first of all? And second, how do you see sort of that sort of evolving in The pricing versus the demand dynamics. Thank you. So if I take the first one and Joe can comment on the second one. We will not give you a specific percentage what India will be of our revenue in 5 years' time. I don't think that would be appropriate. But We have said many times when that question has come up before that the reason to go to a geography like India is that You intend to build you intend and believe that you can build scale, otherwise it's just not worthwhile. And I think we have built partly because COVID have supported us, but I wouldn't sort of overplay that matter. I think we have been or rather our Indian colleagues with our support have been very skillful in building scale since we got involved, whatever, 3 years ago. And no doubt, will we do that many times over, over the coming 5 year period. Our Indian business will be multiple the size it is now in the future. No doubt about that. That's just the nature of what we do in India. We invest heavily to grow the footprint and we fill up our facilities and demand is strong. So where that's going to leave us in 5, 10 years' time, We will see because, of course, as a proportion of our overall revenue, it also depends on how all the rest is growing. So now no doubt will India grow very strongly. But the other side of the group is growing strongly as well. So it's difficult to or even if I had a I wouldn't be specific on that 5 years down the road. So but and then perhaps, Joe, you want to comment a little bit on the sort of pricing pressures on COVID testing in the public system. Yes. You were asking about how much is public funded, how much It's individual pay fee for service. We haven't got that number in terms of splitting that out for you. But What we just to give you a little bit of flavor in respect to that, we've seen strong growth and you see that in The revenue, you've seen strong growth in Ukraine. Part of that is COVID, Although we've seen the testing levels actually fall off probably steepest in Ukraine. But there it's all 100% Private pay. In Romania, we're doing very little public work now at the moment. It's almost all private pay there. Poland, it's almost all public pay. And Germany, it's almost all public pay in our sort of traditional business. But then we have sites like in Munich Airport and some other locations where we it's paid by the users, Not reimbursed. And then we have also specific contracts for clients as well, which then would come under the sort of fee for service non public reimbursement That was as well where we're doing contracting for commercial companies and that would fall under that block there as well. So I hope that gives you a little bit of flavor. Then coming on to pricing question. We're seeing pretty good stability in terms of pricing, both on public reimbursement. We're not seeing any movement on there. And then in terms of the out of pocket and fee for service payments, So also quite there. Now we didn't partake in this price gouging process that some suppliers did when times were really hard and there was a Big peak in demand. We kept our pricing as it was before. So we've been fairly stable in terms of our pricing all the way through. How about in terms of going forward? I don't think it's going to be pricing, which It's going to be the issue. It's going to be volume in terms of the impact on performance and profitability coming from COVID. I think in fact it's going to be quite difficult to see pricing reductions because you're going to see the volume fall off. Now then what happens in Q4 with Delta variance and the seasonal impact, it would be interesting to see. Thank you. Thank you. And your next question comes from the line of Claus Polin from Erik Kinstur Bank, your line is now open. Thank you very much. Hello and thanks for taking my questions. And also congratulations from a very impressive quarter indeed. I will not focus on COVID, but I wonder, you highlighted a very good development in your subscription business In Poland particularly, do you see a similar pickup in Hungary and Romania perhaps? Yes, Klas, just to remind you that in Hungary, we only have the risk carrier. So that's just important. But yes, The short answer is yes to that. But remember that the scale in Poland is so much bigger than in Romania and Hungary. So the relative impact on us from seeing that pickup is much bigger in Poland because Relatively, we see so much more members. Yes. Absolutely. But I also recognize that you are Investing we're setting up a new hospital in Bucharest. Maybe you could comment, what is your Plans for a couple of years going ahead in the Romanian market. Are you planning for setting up More hospitals and clinics, I guess. Yes. I mean, we are heavily investing in Romania. We have so done for quite some time. We whenever 2, I mean, I don't 2, 2.5 years ago, we bought that Pelican hospital up in Oradia. And we've invested in extending that. That's done phenomenally well for us through these periods. It's been filled up. We bought some other sort of ambulatory businesses overall. We're very pleased with what we see in Romania. The prepaid business for the subscription business that you're asking us about. It's yes, We see some really encouraging signs. And then importantly, we actually didn't write in this report about the hospital investment in Bucharest. You have obviously seen that. It's been published. That's a really good thing. Clearly, we've signed a contract. It's going to be whatever, 15 months or so until that can open its doors. But it's a really important step. One thing which is happening in Romania from a sort of Legislative perspective, they have enacted legislation in Romania, which very significantly facilitates the co pay, so to speak, in private health care facilities, where You can combine public reimbursement contribution with a private co pay, which we believe and I think everyone else as well, so it's not a Medicover belief, will significantly increase private to demand in Romania. So I'm not saying that's only why we did this hospital investment, but We expect over the coming years, you will see significant private sector growth in Romania. Okay. But it's also key is it also key to expand your presence in Romania to be a significant player in the Subscription business going forward. So that's the point I'm making. I mean, we're expanding the hospital infrastructure. We're investing in our in our ambulatory facilities. What you don't really know is the What is the right if we look at 2022, 2023 2020 2, 2023, how will we split between acquiring existing ambulatory businesses that has an existing fee for service business to use that to fill up additional prepaid or subscription members alongside Keep doing our organic greenfield development of our own clinics. Now How that plays out in reality, that's always going to be a little bit opportunistic because we know how much capacity we want to put on. And of course, if we come across a business where instead of only in citation marks Doing a greenfield investment, we can as well acquire an existing business with a customer base and a going concern. Most often, that's a preferred choice. But you come across that when you come across it, so to speak. But fundamentally, we have a very aggressive investment plan for Romania. Okay, great. And also you highlighted the dental business was performing very well And Poland, and I guess you are launching a new concept there. And is it possible to give some Sort of a hint of how large of the Polish business is in hand to today? Yes. Well, I mean, if you I mean, the yes, well, I mean, as a proportion of the overall Polish business, it is still small plus. I mean, somehow for the year, I think revenue wise, it will be sort of towards €40,000,000 €50,000,000 or somewhere there. So relatively, as a total Polish business, it still is It's a small piece. But in fact, that's why it's so super interesting because if you look at our market share in Poland of private pay dentistry. It is still minute. And I think we still we are today the largest or certainly, if not number 1, we are certainly number 1 or number 2 in the entire country in terms of size of private pay dental business. And if you have that platform and great people leading it And then having a combination, as I said before, of very aggressively rolling out your greenfield clinics and acquiring dental practices where it makes sense. You can grow that business for decades to come. So that's really why we're excited over it. Okay, great. Thank you so much. Right. Thank you. So no further questions have came through. And your next question comes from the line of Matthias Wadster from SEB. Your line is now open. Hi, there. Some of my questions were already asked, but one from I mean, given the vaccinations in India are done at Cost coverage, as you said, the implied EBITDA margin on revenues from COVID-nineteen related services look incredibly high, I must say, in Q2 And considerably higher than in Q1 and Q4. Can you just provide some thoughts and flavor here just to get a sense of what is happening And in terms of the COVID related services? But Matthias, that's the point that Joe made before that. We have changed around a little bit, but I wouldn't overdramatize that, but we have changed around a little bit The cost allocations between COVID, non COVID, too. It's an estimate, as Joe said, And we think for each quarter that progresses, we also become a little bit wiser. So I think that reflects the latest best understanding we have of the contribution coming out. The growth in the profitability level or contribution level on COVID sequentially quarter on quarter It's largely from that because you see the volumes are pretty much the same as they were quarter on quarter. So that's really what it comes down. Okay. Thanks for that. I fully respect and it's difficult to single out the impact here. Thank you very much. Thank you. And so no further question that came through. Please continue, sir. All right. Okay. Well, I think we have had all our questions then. So let me then thank you for calling in and listening and wish you all a lovely summer. Now we take a couple of weeks of not a couple of weeks of holidays, but we take a couple of weeks after the report here. And we look forward to welcoming you to our 3rd quarter announcement towards the end of 3rd November. 3rd November, this is. So we welcome you all then. Thank you. Bye.