Managers' Transactions & Directors' Dealings | 09.11.2006



RHÖN-KLINIKUM AG: Today's Analyst Conference in Frankfurt/Main

RHÖN-KLINIKUM AG / Quarter Results/Results Forecast


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RHÖN-KLINIKUM AG, Bad Neustadt/Saale

Analyst conference in Frankfurt/Main

Results for the first nine months of 2006 (already published) explained

Market position and future strategy

1. Acquisition of university hospitals Gießen/Marburg

2. Health reform + Group's 10-point programme

3. Goal: further market penetration

Forecast for 2006 results and trend result for 2007

Bad Neustadt / Saale, 9 November 2006 ----- At Rhön-Klinikum AG's analyst

conference held today in Frankfurt/Main, the Group's results for the first

nine months of 2006 (already published on 26 October 2006) were once again

briefly explained and the parameters underpinning the expected results

discussed. For the first nine months of 2006 the Group reports revenues of

EUR 1.4 billion (9M 2005: EUR 1.0 billion / + 36.7%). The jump in revenues in

the first nine months of the current financial year stems primarily (to the

tune of EUR 280.9 million) from the consolidation of Universitätsklinikum

Gießen/Marburg from 1 February 2006. Consolidated third-quarter revenues

reached EUR 489.8 million, up 37.4% from the same period in the previous year

(Q3 2005: EUR 356.4 million). In the first nine months of 2006 (before the

earnings share of minority owners), the Group's net consolidated profit

reached EUR 70.1 million (9M 2005: EUR 67.1 million / + 4.5%). That translates

into an EpS in Q3 of EUR 0.45 (Q3 2005: EUR 0.42); with reference to the first

nine months EpS increased to EUR 1.29 (9M 2005: EUR 1.23).

Market position and future strategy

Re. (1) Acquisition of university hospitals Gießen/Marburg

'The privatisation of the first university hospital is path breaking for

the whole of Germany and hitherto unique on the German hospital and

university landscape, serving as a beacon for the future', explained

Wolfgang Pföhler, chairman of the Board of Management of the listed

hospital group headquartered in the Rhön. 'With the acquisition of

Universitätsklinikum Gießen/Marburg, our healthcare delivery chain is

complete. Our offering now ranges from outpatient and inpatient basic and

standard care facilities to cutting-edge medicine at our maximum care

facilities, and thus spans all major fields of acute medicine'.

He emphasised the good co-operation between the areas of research/teaching

and healthcare, and in this connection congratulated the medical faculty of

the University of Gießen on its award for excellence in promoting science

in Germany received from the German Government and the German Federal


The restructuring and privatisation of Universitätsklinikum Gießen/Marburg

are quietly moving ahead as planned. 'Both owners of the university

hospital are pulling together as one team', Pföhler said. 'The steadily

improving earnings underscores our assessment that we will make

Gießen/Marburg a success. Whereas the loss in the first abridged quarter of

2006 - Gießen/Marburg has belonged to us only from 1 February - totalled EUR

2.6 million and in the second quarter EUR 3.0 million, this was trimmed in

the third quarter to EUR 0.9 million. This loss will once again be cut by

about half in the fourth quarter. We will pursue our past strategy

unrelenting and therefore assume that Gießen Marburg can turn a profit in


Pföhler is convinced that more and more federal states will come to the

realisation that the privatisation of university hospitals can successfully

be used to secure maximum-care medicine at universities. 'Given the current

woes of Germany's public finances we are certain that further university

hospitals will be offered on the market within the next two years'.

Re. (2): Health reform and Group's 10-point programme

The Group's management expects that the planned cuts, i.e. the general

lowering of hospital budgets and prolonging of start-up financing for

integrated care, will give a further impetus to the privatisation process.

Further drivers are the VAT hike planned for 1 January 2007 and rising

doctors' salaries. The planned lowering of compensation for shortfall

volumes will also shake up the market. The chairman of the Board stated:

'Of course we will not be unaffected by the impact of the reform, but we

have done our homework, are ready, and we can and will act.'

The burdens can be compensated by numerous countermeasures that we have

already initiated', explained the chairman of the Board of Management. The

most important measures of the ten-point programme include the following:

For every Group hospital a plan of action has been prepared to steadily

reduce expenditures and raise earnings.

To offset the VAT increase we will proceed with an intelligent insourcing

of services hitherto obtained from external providers, or certain purchases

will be moved forward. By establishing tax consolidated groups, high VAT

payments will be avoided. Moreover, the increase in VAT will be largely

offset by the Group's already existing bargaining power in purchasing.

With an even greater standardisation of input products - this relates to

the use of consumables and implants and the streamlining of our offering -

procurement costs will be cut further.

We will step up our efforts to expand our material cost benchmarking and

competition among our Group subsidiaries, thus further reducing


The internal reorganisation of our facilities will also be pushed ahead

with the continued consistent use of staffing benchmarks.

Moreover, leaner supply and discharge structures at our Group hospitals

will also help cut the costs of materials management, further optimising

hospital logistics.

We will counter the planned cuts in hospital budgets by raising case

numbers, expanding offerings and further developing specialisations at

selected facilities. This internal growth will result in even better

occupancy rates, which in turn will raise earnings.

'We have not only identified the problems, but have already begun to solve

them', said Wolfgang Pföhler. All measures will move within a target

corridor in their effects, thus making offsetting adjustments between the

individual measures a part of the concept and its ongoing fine-tuning.

Re. (3): Goal - further market penetration

According to the Group's CEO, the decision taken by the German government

on healthcare reform heralds a sea change: it is trying to put a lid on

demand which is to be spread over waiting lists. Here, too, the Group's

management is ready with the right concepts. 'I would just name our concept

of the medical care centres (MVZs) attached to our Group hospitals, our

comprehensive product portfolio and our willingness to offer the health

insurance funds a generalised, full-coverage service. As you can see, the

healthcare reform measures will not put us off our long-term strategy of

sustained growth in earnings.'

In addition to the ten-point programme to improve the operative processes

in the Group's individual hospitals and the Group as a whole, the Group's

management is also working on strategic concepts. RHÖN-KLINIKUM AG is also

striving to lead developments beyond the day-to-day business of a hospital.

The latest considerations were briefly summarised and outlined under the

catchphrase 'quality through standardisation and service volumes'.

This subject is subdivided into the following four points:

Technology advances in a hospital's clinical processes

Transfer of non-physician tasks to other professional groups

New professional model for doctors: greater efforts towards division of

labour and specialisation

Multi-level university hospital as a working model for generalised

provision of healthcare

The Group's management are convinced that with the 10-point programme the

company will quickly be able to take on and meet the challenges of the

health reform. With the concepts as outlined the goal is to further raise

the efficiency and quality of healthcare delivery. 'This brings us one step

closer to achieving our corporate goal of ensuring affordable, generalised

healthcare for everyone to high quality standards', Pföhler explained. 'We

thus clearly continue our earnings-oriented growth strategy despite the

burdens mentioned and will not disappoint our patients or our investors.'.

To encourage debate on the subject 'Das Neue Ärztliche Berufsbild - Zur

Zukunft des Arztberufes im Krankenhaus' (New professional model for doctors

- on the future of the doctor's profession in the hospital) RHÖN-KLINIKUM

AG will hold a symposium at the Sheraton Frankfurt Hotel & Towers,

Frankfurt Airport Terminal 1, on Friday, 24 November 2006, from 12:30 to

about 5:00 p.m. The event is addressed to representatives of associations,

politicians, the media, hospital directors as well as the Advisory Board of

RHÖN-KLINIKUM AG. The subject will be debated - probably controversially -

by reputed guest speakers and dedicated panellists.

Forecast for 2006 results and trend result for 2007

'For financial year 2006 we continue to expect revenue of EUR 1.9 billion, a

net consolidated profit of EUR 93.0 million and earnings per share of EUR

1.72', said Wolfgang Pföhler. In this connection Dietmar Pawlik, the

company's CFO, referred to the special burdens that the hospital group had

to deal with this year and next, from the doctors' strike - with the

resulting increases in personnel expenditure - to the VAT increase as well

as budget cuts under the health reform. 'All of these are new burdens which

RHÖN-KLINIKUM Group did not face in the previous years and which will be

offset by the restructuring of the newly acquired hospitals and the

10-point programme', Pawlik said.

'Without taking into account acquisitions, we maintain our target for

revenues of just under EUR 2 billion and a net consolidated profit of EUR 100

million for financial year 2007. We thus clearly continue our

future-oriented growth strategy despite the described burdens', explained

Wolfgang Pföhler in closing.

Brigitte Sallwey

Sallwey & Partner

Telemannstr. 18

Tel.: (+49)069 97203628

e-mail: sallwey@rhoen-klinikum-ag.com

DGAP 09.11.2006


Language: English


Salzburger Leite 1

97616 Bad Neustadt/ Saale Deutschland

Phone: +49 (0)9771 - 65-0

Fax: +49 (0)9771 - 97 467

E-mail: fire.ir@rhoen-klinikum-ag.com

WWW: www.rhoen-klinikum-ag.com

ISIN: DE0007042301

WKN: 704230

Indices: MDAX

Listed: Amtlicher Markt in Frankfurt (Prime Standard), München;

Freiverkehr in Berlin-Bremen, Düsseldorf, Hamburg, Stuttgart

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