INTENTION
TO FLOAT (“ITF”)
Press release, 14/01/2014
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR
JAPAN
This announcement is not an offer to sell, or a solicitation of an offer to acquire
any securities. This announcement is an advertisement and not a prospectus
and investors should not purchase any securities referred to in this
announcement except on the basis of information in the international offering
memorandum or the Portuguese prospectus (the “Portuguese Prospectus”) to
be published by Espírito Santo Saúde, SGPS, S.A., in due course (and, in the
case of the Portuguese Prospectus, when approved by the Portuguese
Financial Services and Market Authority (“CMVM”)). These documents contain
important information, including information regarding risks and uncertainties in
the Company’s business and financial statements and other information. Once
approved, the Portuguese Prospectus can be obtained at the registered office
of ES Saúde in connection with the offering and admission to listing of its
ordinary shares on Euronext Lisbon.
Espírito Santo Saúde announces the intention to launch an initial
public offering and listing on Euronext Lisbon
Lisbon, 14 January 2014 – Espírito Santo Saúde, SGPS, S.A. (the “Company”
or “ES Saúde”), a Portuguese private healthcare reference player, today
announces the intention to proceed with an initial public offering of ES Saúde
shares, which includes a capital increase of the Company, and the listing of its
ordinary shares on Euronext in Lisbon (the “IPO”).
Commenting on today’s announcement, Isabel Vaz, CEO of ES Saúde, said:
“Since its inception in 2000, ES Saúde has built a track record of growth, mostly
organically, but also through acquisitions in Portugal, becoming one of the
major players in the private healthcare market.
The IPO of ES Saúde marks an important milestone in the Company’s history
by bringing greater visibility to the quality of its assets and management model,
as well as enhanced financial flexibility to continue pursuing its growth strategy.”
ES Saúde Overview
ES Saúde is one of the largest integrated private healthcare service groups by
Operating Revenue (the sum of revenue from sales and services provided and
other operating income and earnings, the “Operating Revenue”) in the
Portuguese growing private healthcare market. The company ranks first in
terms of private network population coverage (59 per cent. as of 2012) and
private network purchasing power coverage (64 per cent. as of 2012), based on
management estimates.
The Company was established in 2000, and provides healthcare services
through 18 facilities, comprising eight private general hospitals, one hospital
2 that operates under a public-private partnership (“PPP”) agreement, seven
private outpatient clinics and two senior residences.
As of 30 September 2013, ES Saúde had 1,179 operational beds, and hired
8,907 staff, including 3,594 physicians (consultants, specialists and general
practitioners), 1,672 nurses, 507 technicians, 892 other medical staff and 2,242
non-medical personnel.
For the nine months ended 30 September 2013, the Company had Operating
Revenue of €279.5 million and EBITDA of €43.1 million.
ES Saúde operates a diversified business model, organised into three main
operating segments:
Private Healthcare, represented 76.6 per cent. of the Group’s Operating
Revenue (excluding inter-segment revenue) for the nine months ended 30
September 2013 and includes core acute care hospital and outpatient clinics
business. This comprises eight general hospital facilities of various sizes,
including Portugal’s largest private hospital by revenues in 2012, Hospital da
Luz (according to Exame magazine), and seven private outpatient clinics, which
offer a wide range of general hospital and clinical services, including intensive
care units (“ICUs”), operating rooms, emergency rooms, maternity units and
nuclear medicine, as well as specialized facilities in dementia care.
Public Healthcare, represented 22.5 per cent. of the Group’s Operating
Revenue (excluding inter-segment revenue) for the nine months ended 30
September 2013 and is attributable to the operations at Hospital Beatriz Ângelo
(“HBA”), a newly built public hospital opened in January 2012 for which the
Company provides clinical and other services under a PPP agreement with the
Portuguese Government.
Other Businesses, represented 0.9 per cent. of the Group’s Operating
Revenue (excluding inter-segment revenue) for the nine months ended 30
September 2013, which comprises two senior residences, aimed at individuals
65 years old and older, designed to offer an integrated residential solution for
senior citizens.
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Key Strengths
• Leading position in Portugal
ES Saúde is one of the largest providers by revenues of private healthcare in
Portugal. The Company has a leading position by revenues in the private
healthcare segment and is the second largest private player when combining
public (PPPs) and private healthcare revenues, based on management
estimates. The Portuguese private healthcare market showed strong resilience
through the crisis, with an average annual growth in revenues on private
healthcare of 5.5 per cent. according to data from the Portuguese National
3 Institute of Statistics (“INE”) of June 2013 (excluding pharmaceutical products
sold in pharmacies and general health administrative expenses) between 2007
and 2011, a period during which the Portuguese economy contracted and public
healthcare revenues dropped by approximately 0.7 per cent. on average per
year.
• Broad geographic network of diverse healthcare facilities
The Company operates in northern, central and south-central Portugal, and has
one of the broadest geographic footprint amongst private healthcare providers,
with a significant presence in both the Lisbon and Oporto areas, the country’s
two largest and most affluent regions. The Company operates facilities of
different sizes and scopes, including complex, multi-disciplinary general
hospitals, community hospitals and outpatient clinics, in addition to senior
residences, owning the only private general hospital in Setúbal and Aveiro. ES
Saúde network functions as a cohesive whole, with outpatient clinics providing a
source of referrals to their hospitals.
•
Experienced management team with a track record of managing
growth based on clinical excellence
ES Saúde has increased its operational revenues year-on-year since inception
in 2000, while maintaining a commitment to clinical excellence. The Company
has been able to improve the profitability of the business units acquired and has
exceeded its targets for the private sector greenfield projects completed to date.
In 2012, ES Saúde diversified its business into the public health sector, with the
opening in 2012 of HBA.
• Well-invested, modern real estate portfolio
ES Saúde has a substantial real estate hospital portfolio, comprising both the
facilities where it operates and the land where the facilities are located, which
had a net book value of €206 million as of 30 September 2013. In most cases,
the ownership gives ES Saúde a high degree of flexibility to adapt facilities to
supply new services or build additional capacity. The Company’s facilities are
amongst the most modern in the Portuguese healthcare sector, with the
majority of them having been built or extensively refurbished in the last 10
years.
•
Well-established relationships with all major Portuguese healthcare
payers
The Company has well-established relationships, based on transparency and
integrity, with all of the leading Portuguese private health insurance providers,
as well as with all of the main sponsored health plans (public employer and
private employer). The Company’s relationship with payers takes advantage of
scale of operations, well-located network, proven ability to control medical and
operating costs, and track record for delivering high-quality healthcare.
4 •
Model based on best-in-class services and infrastructure, with
qualified and incentivised clinical staff
The Company has been able to attract some of Portugal’s leading physicians,
highly regarded in their field, supported by skilled nurses and other highly
qualified health technicians, and offering some of the most advanced diagnostic
equipment and treatment technology available in the market. The Company
believes medical practitioners benefit from the scale and financial performance
of ES Saúde, as its scale and financial performance enable the Company to
provide some of the country’s most modern facilities and, in some cases,
cutting-edge technology.
• Entry into PPP management
The opening in 2012 of HBA, the Company’s first public hospital, has promoted
the diversification of the business model. In its first full year of operation, HBA
has scored above average on a number of efficiency measures recorded by the
Portuguese Healthcare Systems Central Administration (October 2013) and has
been ranked amongst the top 10 public hospitals on several other metrics. In
addition to these operational achievements, the Company has been able to
improve HBA’s financial performance since its opening in the first quarter of
2012, increasing Operating Revenue by 88 per cent. in the nine months ended
30 September 2013 compared to the same period in the prior year. ES Saúde is
well positioned to follow future growth from the public market due to the ability
to offer high quality healthcare services at a lower cost than public operators.
Additionally, this movement also brings improvements to ES Saúde competitive
position, due to economies of scale and other synergies and ability to attract the
best physician.
Financial highlights
€ millions
2010
2011
2012
9M 2012
9M 2013
Operating Revenue (1)
250.0
273.6
341.4
249.6
279.5
---
9.4%
24.8%
---
12.0%
37.5
46.5
38.8
24.2
43.1
15.0%
17.0%
11.4%
9.7%
15.4%
EBIT
11.2
20.2
10.4
2.9
22.1
Net Income
1.4
4.8
(2.0)
(6.1)
9.1
Capex
23.6
7.5
32.5
28.0
9.8
% growth
EBITDA
(2)
% margin
(1)
(2)
Sum of revenues from sales and services provided and other operational income
EBITDA includes impact of impairment in fixed assets.
Transaction highlights
The IPO is expected to comprise an issue of new shares by ES Saúde and a
partial sale of existing shares held by some of the Company’s current
shareholders (Rio Forte Investments, S.A., Espírito Santo Financial Group, S.A.
5 and Companhia de Seguros Tranquilidade, S.A.). The Company intends to
raise gross proceeds of approximately €25 million, primarily to strengthen the
Company’s financial position, increasing flexibility for future investments.
The offering is expected to consist of i) an institutional offering in Portugal and
elsewhere outside the US in reliance on Regulation S, and in the US to qualified
institutional buyers under Rule 144A (the “Institutional Offering”), as well as ii)
an offering to retail investors in Portugal, including to ES Saúde’s staff (the
“Retail Offering” and, together with the Institutional Offering, the “Offering”).
Following the IPO, Rio Forte Investments S.A. through its subsidiary Espírito
Santo Healthcare Investments S.A., is expected to maintain a minimum stake of
51% in ES Saúde.
Credit Suisse and Espírito Santo Investment Bank (an affiliate of certain
shareholders of the Company) are the Joint Global Coordinators and Joint
Bookrunners of the IPO. Crédit Agricole CIB is Senior Co-Lead Manager and
Banco Finantia, Banco Santander, BBVA, BPI and CaixaBI are Co-Lead
Managers of the Institutional Offering.
Espírito Santo Investment Bank will also act as Global Coordinator of the Retail
Offering.
Subject to the approval of the Portuguese Prospectus by the CMVM and to
market conditions, the Portuguese Prospectus with all details of the Offering,
including the price range, will be available at www.cmvm.pt and
www.essaude.pt when the offering is commenced. The final offering price is
expected to be published at www.cmvm.pt and www.essaude.pt before trading
starts on Euronext Lisbon.
Press contacts:
João Novais
CFO and Representative for Market
Relations
Phone: +351 21 313 82 60
E-mail: [email protected]
Jorge Santos
Investor Relations Desk
Phone: +351 21 313 82 60
E-mail: [email protected]
6 Forward-Looking Statements
This announcement may include certain forward-looking statements, beliefs or
opinions, including statements with respect to the Company’s business,
financial condition and results of operations. These statements, which contain
the words “anticipate”, “believe”, “intend”, “estimate”, “expect”, “forecast” and
words of similar meaning, reflect the Company’s beliefs and expectations and
involve risk and uncertainty because they relate to events and depend on
circumstances that will occur in the future. No representation is made that any
of these statements or forecasts will come to pass or that any forecast results
will be achieved. There are a number of factors that could cause actual results
and developments to differ materially from those expressed or implied by these
statements and forecasts. Past performance of the Company cannot be relied
on as a guide to future performance. Forward-looking statements speak only as
at the date of this presentation and the Company and each of the Joint Global
Coordinators, the Senior Co-Lead Manager and the Co-Lead Managers
expressly disclaims any obligations or undertaking to release any update of, or
revisions to, any forward-looking statements in this presentation. No statement
in this announcement is intended to be a profit forecast. As a result, you are
cautioned not to place any undue reliance on such forward-looking statements.
Important Notice
The shares mentioned herein (the “Shares”) have not been, and will not be,
registered under the United States Securities Act of 1933, as amended (the
“Securities Act”), and may not be offered or sold in the United States absent
registration or an exemption from registration under the Securities Act. There is
no intention to register any portion of the offering in the United States or to
conduct a public offering of the Shares in the United States.
This communication is directed only at (i) persons who are outside the United
Kingdom or (ii) persons who have professional experience in matters relating to
investments falling within Article 19(2) of the Financial Services and Markets Act
2000 (Financial Promotion) Order 2005, as amended from time to time (the
Order) or (iii) high net worth entities, and other persons to whom it may lawfully
be communicated, falling within Article 49(2) of the Order or (iv) certified high
net worth individuals and certified and self-certified sophisticated investors as
described in Articles 48, 50, and 50A respectively of the Order or (v) persons to
whom this communication may otherwise be lawfully communicated (all such
persons together being referred to as relevant persons). Any investment activity
to which this communication relates will only be available to and will only be
engaged with, relevant persons. Any person who is not a relevant person
should not act or rely on this document or any of its contents.
This communication is distributed in any member state of the European
Economic Area which applies Directive 2003/71/EC, as amended from time to
time (this Directive together with any implementing measures in any member
state, the “Prospectus Directive”) only to those persons who are qualified
investors for the purposes of the Prospectus Directive in such member state,
and such other persons as this document may be addressed on legal grounds,
and no person that is not a relevant person or qualified investor may act or rely
on this document or any of its contents.
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