Falck stabilised its financial performance and delivered a solid third quarter

Falck’s financial performance improved in the third quarter of 2020. Efficiency measures taken in June 2020 and lower start-up costs in the Ambulance business led to improved profitability and an EBITA margin of 6.6%. Operationally, Falck delivered a strong performance in all markets, supporting national healthcare systems under pressure.

President and CEO Jakob Riis said:

“So far, 2020 has been a year of significant challenges. Due to swift actions taken in the second quarter, we are now in a stable financial position, and delivering solidly, operationally and financially.”

Revenue was at the same level in the third quarter as in the second quarter of 2020. A range of efficiency-enhancing measures launched in June 2020 have had the desired effect. Cost of operations has been lowered in line with activity levels, and sales and administrative expenses have been similarly adjusted. As a result, profitability was restored in the third quarter.

Financial highlights in Q3 2020 (compared to Q3 2019) were:

• Reported revenue was DKK 2,923 million (DKK 3,403 million). Adjusted for divestments and shut down of non-core business activities, revenue decreased by 8.1% in fixed currencies, mainly due to lower activity levels in the pay-on-use business.

• Reported operating profit (EBITA) increased to DKK 193 million (DKK 173 million). Efficiency measures taken across the business offset the negative impact from lower revenue, and the EBITA margin increased to 6.6% (5.1%).

• Profit for the period increased to DKK 106 million (DKK 52 million). The improvement for the period was driven by the higher EBITA and lower amortisation of customer contracts.

• Free cash flow was DKK 99 million (DKK 126 million). The decrease was mainly driven by the payment of taxes deferred as part of COVID-19 support packages in several countries falling due in the third quarter.

• Falck has narrowed its financial guidance and now expects full-year 2020 revenue of DKK 12.0–12.5 billion (11.5-12.5 billion) and operating profit (EBITA) in the DKK 500–650 million (400-600 million) range.

DKK million	Q3 2020	Q3 2019	Q1-Q3 2020	Q1-Q3 2019	2019
Revenue	2,923	3,403	9,198	10,376	13,824
Reported EBITA	193	173	424	695	729
EBITA margin (%)	6.6	5.1	4.6	6.7	5.3

In Ambulance, large contracts initiated in 2019 in the US, the UK and Sweden are now more profitable after a year with significant start-up costs. Exiting less profitable contracts has had a positive effect on profitability. During the quarter, a large contract was secured in Germany, and we received a Notice of Intent to Award from the City of San Diego.

In Colombia, the number of subscribers has increased significantly, driven by customers’ desire to gain access to home care and online services and thereby avoid visits to clinics and hospitals. The number of subscribers to roadside assistance services in the Nordic countries is decreasing, but there is growing interest in subscribing for patient transport services.

In Healthcare, activities picked up over the quarter, but remain at a lower level than before COVID-19. It is Falck’s firm belief that the market for healthcare services holds significant potential, and that the combination of contract-based subscriptions and pay-on-use services serve as a resilient business model in times of change.

President and CEO Jakob Riis said:

“Every day, Falck employees respond to emergency situations, transport patients between hospitals and homes, give treatments and guidance, online and on site, and thereby provide help to people in urgent need. I am proud of the way our employees continue to deliver, supporting the infrastructure of our society, and thereby do their part in battling the pandemic under challenging circumstances.” 

See the full Q3 2020 report here