0

Quality drives productivity and growthIntroduction to Capio

January, 2016

Quality. Compassion. Care.

1

9%

54%37%

Footprint (2014)

Sales: SEK 13.2 billions

Capio today

• About 12,400 employees and 4.6 million

patient visits in Sweden, Norway, France

and Germany

• Offers a broad range of medical, surgical

and psychiatric care of high quality in our

hospitals, specialist clinics and primary care

units

• Strong well established brand, recognized

for high quality and Modern Medicine – one

of the sector’s strongest brands in Europe

• Founded in 1994 in Gothenburg. De-listed

in 2006 and listed on Nasdaq OMX

Stockholm in 2015 (June). In the past nine

years Capio has:

– Developed a medical strategy

– Driven by an empowered organization

– Invested in facilities and equipment to

build for the future

A leader in European healthcare

2

Capio footprint

University

hospital

Emergency

hospital

Local

hospital

Specialist

clinic

Primary care

unit

France

• 8 emergency hospitals

• 11 local hospitals

• 3 specialist clinics

Germany

• 5 general hospitals

• 4 specialist clinics

• 1 hospital with rehabilitation and

care facilities

• 7 outpatient clinics (Medical Care

Centers, MCC)

Norway

• 8 medical centers

• 2 specialist clinics

Sweden

• 1 emergency hospital

• 2 local hospitals

• 30 locations for specialist care

• 18 locations for psychiatric care

• 76 locations for primary care

Nordic

Capio footprint 2015

Experience across all care levels

3

12,96013,395

7,301

8,459

10,1289,7309,855

10,417

12,420

13,20013,426

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2007 2008 2009 2010 2011 2012 2013 2014& PF

2015RTMSep

Historical financial performance

Source: 2012-2014 based on audited FS for Capio Holding AB Group – no adjustments made. 2007-2011 based on audited FS for Ygeia TopHolding AB Group – adjusted for divested

business in 2010, 2009 and 2008 (Spain, Unilabs and Diagnostics)

1 EBITDA defined as EBITA adjusted for depreciations and impairments related to operating fixed assets; 2 CAGR and average based on 2007-2014; 3 Adj. related to the handover of a

contract business in Capio Nordic to another healthcare provider (MSEK -160) and for the divestment of UK (MSEK -80); 4 Adj. related to the handover of a contract business in Capio

Nordic to another healthcare provider (MSEK -25), the French SLB transaction (MSEK -92) and for the divestment of UK (MSEK -13); 5 Adj. related to the handover of a contract business

in Capio Nordic to another healthcare provider (MSEK -24), the French SLB transaction (MSEK -66) and for the divestment of UK (MSEK -11)

3.4 4.1 9.0 3.8 4.5 2.5 2.3 3.6 4.3 5.0 5.8 5.4 5.2 4.9

Average organic sales growth2 4.2%

EBITDA margin (in % of Net Sales) EBITA margin (in % of Net Sales)Organic growth (in %)

4.0 4.9

4.1

Net Sales (MSEK)

8.8% CAGR 9.6% CAGR 13.5% CAGR

EBITDA1 (MSEK) EBITA (MSEK)

2 2 2

EBITDA margin

(in % of Net Sales)EBITA margin

(in % of Net Sales)

Pro forma margin, % Pro forma margin, %

4.5%

4.4

% 3.0

3

% 7.9 8.5 8.9 9.7 9.3 9.5 8.7 8.3 7.6

7.4 7.5

9721,009

580

722

906940 919

988

1,0841,102

1,015

0%

4%

8%

12%

16%

20%

24%

28%

0

200

400

600

800

1,000

1,200

1,400

2007 2008 2009 2010 2011 2012 2013 2014& PF

2015RTMSep

4

544

594

266

367

511565

532 545608

645 599

0%

4%

8%

12%

16%

20%

24%

28%

0

200

400

600

800

1,000

1,200

1,400

2007 2008 2009 2010 2011 2012 2013 2014& PF

2015RTMSep

5

4

GERMANY

Private hospitals

(shares by general hospitals)

FRANCE

MSO private hospital care1

(shares incl. all private hospitals)

Capio-relevant markets and segments

Private healthcare provision in Capio markets

Summary of market outlook, 2013-18E, EUR billions

16

+~2% p.a.

16-17

2013 2018E

1520

+6-7% p.a. 2

2013 2018E

23% ~16%

Private provider market share

Percent

SWEDEN

Private primary

and specialist care

2.7

+5-8% p.a.

3.4-3.9

2013 2018E

13%

NORWAY

Private specialist healthcare

(shares also incl. primary care)

1.1-1.20.9

+3-5% p.a

2013 2018E

6%

Source: Capio market assessments

1 Private and public MSO Hospital care market in France is estimated at EUR 65 billions in 2013

2 Refers to forecast 2012-2018E

+1-2% p.a.+0-1% p.a.

%Additional market growth from Capio market mix

Percent

20131998 20132004 20132000 1995 2013

7% 7% 23% 5%

+0-1% p.a. n/a

Private providers are an important part of the solution

5

The European healthcare market is

evolving

6

The European challenge is not going to ease –

demographic squeeze is driving need and costs

Source: OECD Health data 2013, World bank

The population structure develops towards a larger share being elderly

Population pyramid of EU 1960 to 2050

Required healthcare expenditures expected

to continue increasingTotal expenditure on health, GDP (%)

NorwayUnited KingdomGermanyFranceSweden

0

5

10

15

2030E2020E201020001990198019701960

Future development

projected in line with

historic OECD

average CAGR from

2002 to 2012

Medicine and technology increase life

expectancy for an evermore care seeking

population – boosting care consumption

Innovation drives demand

Advances in medicine, technology

and treatment methods that increase

life expectancy and care

consumption

Consumerism drives demand

A more informed and care-seeking

consumer seeking “sickness prevention”

Pressure to provide “quality healthcare with higher productivity” as fewer people have to

pay for an increasingly large share of the population

7

Large gaps and slow implementation create

opportunities

Historic implementation of modern

medicine is a slow process…

17 YEARS1

Best-practice

proven

Best-practice

implemented

Source:

AVLOS – Sweden: Socialstyrelsen; Norway: Helsedirektoratet; France: ATIH; Germany: Federal Statistical Office's DRG browser; Finland: Eurostat ; UK: Health and Social Care Information Centre; Spain: Eurostat; Best-

practice - knee prosthesis: North Wales knee clinic; Best-practice - AMI: US Healthcare costs and utilization project

Ambulatory surgery – All countries excluding Germany: Eurostat; Germany: German association of ambulatory surgery; Best-practice - Inguinal hernia: NHS; Best-practice - Tonsillectomy: US agency for healthcare

research and quality

1 Goodman et al. 1997; 2 For Norway 2011 data and only reported as aggregated data for knee and hip prosthesis

Knee

prosthesis

Acute

myocardial

infarction

2 >15

2 >15

6.62 8.64.0 5.3 9.82.4 4.0 11.3

6.8 7.64.1 6.7 8.0~3 4.0 8.4

AVLOS

Days

Inguinal

hernia (open

surgery)

Tonsillect

-omy

0 80

0 90

64 6643 46 6814 75

38 5721 30 514 85

Share of

ambulatory

surgery

%

Best-practice…with large performance gaps between countries

Use Capio’s know-how to transfer knowledge and speed up change

88

What happened in Sweden?

2000 20101990 2020

Year

Total expenditure on health1, GDPPercentage

198019701960 2030

Source: OECD Health data 2014

1 Healthcare, long term nursing care, dental services and pharmaceuticals

2 Future development projected in line with historic OECD average CAGR from 2002 to 2012

OECD

Norway

Germany

United Kingdom

France

Sweden

Actual data until 2012

Prognosis from 20132

“12% track”

“10% track”

0

5

10

15

20

Sweden was an early adopter of performance based reimbursement

9

Rapid recovery

after surgery

Multi-modal

intervention

Conventional

treatment

Surgery

WeeksDays

Functional

capacity

Meeting discharge criteria

Earlier discharge

AVLOS

No complication

Pain under control

Managing activity of daily living

Cannot reduce AVLOS without improving quality

Rapid recovery – the result of better quality

10

14%15%16%

21%

15%

12%14%

17%

12%10%

The Swedish healthcare system has its

challenges

Source: SKL (vantetider.se)

Specialist care – surgeries and proceduresSpecialist care - visits

Nation-wide Stockholm

Sweden has not yet met its target thresholds for waiting times, in particular outside of the Stockholm region

Long waiting times and an experienced lack of resources drive need for

increased productivity in the Swedish healthcare system

Performance on target levels for waiting times (‘vårdgarantiuppfyllelse’); Share of patients who have waited > 90 days

2011 20132012 2014 2011 20132012 2014

11%11%12%

17%

14%

5%6%

15%

8%8%

11

Estimated annual consultations per doctor

Source: OECD

A doctor treating more patients becomes a more skilled doctor

Source: SCB

Swedish development of population, patients and resources

Partly explained by low staff productivity

• Inpatient growth in line with

population growth

• Outpatient growing faster

• Doctor growth in line with

population growth

• Help nurses and especially

nurses outgrowing population

• Annual consultations per

doctor lower than in similar

countries

• Clinical staff burdened by

non-clinical tasks and old

fashioned administration –

too little time spent with

patients!

(2012)

12

Two keys to change (1/2): Recent healthcare

system reforms

Performance-based

remuneration

Mo

de

rn

Me

dic

ine

&

Ma

na

gem

en

t

Consolidation

AVLOS

In-to-out

Staff productivity

Focus on traditional

scale synergies

LEON / Specialization ?

Illustrative country overview

? Indicative relevant market trends

2003 2005 1997 1995

Different starting points and times, but all striving for the same direction

13

Two keys to change (2/2): Modernised

organisation

YES!

Taking

initiatives!

NO!

Waiting for

orders?

Group

Business area

Region

Main unit

Unit

Care

unit

Capio decentralized responsibilities

Communication Reputation

Efficiency Management

Resources

Overhead

Direct costs

KPI

KPIProduction

Productivity

Sales

Gross result

Operating

result

KPI

Improved operating result

= an effect of quality and

productivity

Capio’s model for linking quality to results

QPI

Empowered to do the best every day!

14

Capio’s strategy – Modern Medicine and Modern Management

15

Modern Medicine and Modern Management

The patient in focus

• Modern Medicine with new treatment

methods and techniques and a sound

treatment of patients, enables shorter

AVLOS and a continued shift from

inpatient to outpatient treatments

• Modern Management to free up more

patient time for doctors and clinical staff

and to improve productivity

HIGHER QUALITY OF HEALTHCARE

Focus on quality and productivity drives volume and profitability

16

2007: Importing of Capio

Model to France

Future: Integrated regional hubs

structured along a star networkToday: Strong

regional hubs

Increasing

productivity Closing beds Merging

Consolidation strategy

• A “star network” is a physical and virtual

network around main units

• Modern “main units” with a large set of

activities attracting both patients and doctors

• Several small specialized units (e.g., day

care center, rehabilitation and post-acute,

psychiatry)

• Individual medical practices, consultations

and homecare in areas surrounding Capio’s

clinics

Star network

• Regroup existing facilities into new

facilities

• Attract new doctors and patients

• Continue to reduce AVLOS and

improve productivity

Surgery

Daycare

Consultancies

Maternity

Medicine

Emergencies

Capio clinic

General

practitioners

Proximity care

centres

Day care

centres

Rehab

Specialists

Homecare

Health

Insurance/

Regional Health

Authority

Compli-mentary

Insurances

• Dedicate doctors to

local points of care

• Improve accessibility for

patients

• Attract new patients

FRANCE

Modern Medicine allows optimization of flows

and consolidation of units…

17

Hip and knee prosthesis surgery Capio France

4 066

4 911

5 296 5 529 5 949 6 207

27

11

19

33

43

0

10

20

30

40

50

60

70

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

2010 2011 2012 2013 2014 2015RTM

Number of procedures

Discharged, % <=4 days

Number of inpatients and outpatients %

Average change per year 2009-2014

Capio France Total France

3.0 1.8

*RTM Sep 2015

• A leader in Modern Medicine in France

• In outpatient care Capio is ahead of and

increasing more than the French market

• Transfer of inpatients to outpatients 3 pp,

from 64% to 67% in the last twelve months

(Sep 2015)

• Capio is currently creating the first pure

outpatient center ever in France for surgery,

including hip and knee replacements in day

surgery

Share of operations in outpatient surgery

in Capio France and total French market, %

Source: ATIH, Capio

Capio Clinique de

Domont, outside Paris

FRANCE

Provided in

daycare

Number0 1 8 26 160 405*Source: Capio

43% of all hip and knee replacements were done in less than four days

Modern Medicine driving shorter AVLOS and

shift from inpatient to outpatient care

*

18

6-8 patients per care team* = Other tasks include e.g. telephone, tutorial/introduction, meetings, other administration, coordination, business outside ward, waiting/searching, quiet time

!

• Significant improvements in staff utilization

needed to manage waiting times to treatment

for patients and working environment for

clinical staff

• Observations from initial studies at some Capio

hospitals suggest;

• Only 12-14% of daily work performed by

nurses are allocated to direct patient time

• About 40% constitutes of documentation,

reporting, and pharmaceutical handling

• Large variations in the number of

patients per care team (4-9), doctor

consultations per day (7-22) and staff

hours per operation hour (6-22)

Illustrative example based on initial studies at some Capio wards

SWEDEN

Modern Management – more time for the

patient

Source: Capio

Modern Management leads to a more efficient use of resources

19

Quality

6-8 patients per care team

9.6 min per patient and day10-12 patients per care team

13.1 min per patient and day

1 = When the number of patients increases, the time for indirect care and rounds have increased proportionally

* = Other tasks include e.g. telephone, tutorial/introduction, meetings, other administration, coordination, business outside ward, waiting/searching, quiet time

36% more time spent with patients, but a significant reduction of total staff time

SWEDEN

From where we are to where we want to be

More time for direct and indirect care1

20

CStG CCB

11%

26%

A lesson learnt from France

SWEDEN

More time spent on rounds

Doctors and nurses work together

21

Knee

prosthesis

Acute

myocardial

infarction

2 >15

2 >15

6.6 8.84.4 5.3 9.82.4 4.0 12.5

6.8 7.64.1 6.7 8.0~3 4.0 8.4

AVLOS

Days

Inguinal

hernia (open

surgery)

Tonsillect

-omy

0 80

0 90

64 6643 46 6814 75

38 5721 30 514 85

Share of

ambulatory

surgery

%

Best-practice

Source:

AVLOS – Sweden: Socialstyrelsen; Norway: Helsedirektoratet; France: ATIH; Germany: Federal Statistical Office's DRG browser; Finland: Eurostat ; UK: Health and Social Care Information Centre; Spain: Eurostat; Best-practice - knee

prosthesis: North Wales knee clinic; Best-practice - AMI: US Healthcare costs and utilization project

Ambulatory surgery – All countries excluding Germany: Eurostat; Germany: German association of ambulatory surgery; Best-practice - Inguinal hernia: NHS; Best-practice - Tonsillectomy: US agency for healthcare research and quality

• Germany late in

implementing Modern

Medicine

• Performance based

remuneration introduced

in 2005, but

administrative restrictions

prevent development

• Political reform needed

and discussed

The biggest potential in Europe

GERMANY

A platform for Modern Medicine

2222

Linked together from the patients’ need to financial results

How we make this happen – The Capio Model

A sustainable way to drive quality and productivity

23

Benefit from recent large investment projects

made to support the Modern Medicine strategy

Acquire and integrate small add-ons in France

and Sweden to strengthen regional clusters and

centers of excellence• Small and medium scale acquisitions

– E.g. Clinique du Parisis in France

• Return requirements – Capio targets multiples of 5-7x

EBITDA (pre-synergies)

Structural acquisitions in existing countries and

over time in new countries

Capture scale benefits from completed

projects and integrate small add-ons

Acquisitions part of the strategy

24

Net sales growth

The target is to grow

organically at least in line

with the market and add

acquisition growth at least

at a similar rate over time

Operating result (EBITDA)

The target is to grow

operating result at a higher

rate than sales growth

through increased

productivity and operational

leverage

Net capital expenditure

The target with present

business mix is to keep net

capex around 3% of net

sales per year including

Modern Medicine and

expansion related capex

Net sales and organic sales growth (RTM) Operating result (EBITDA) and margin (RTM)1 Net capital expenditure and in % of sales (RTM)

0

1

2

3

4

5

6

7

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Q3 Q4 Q1 Q2 Q3

2014 2015

Net sales, RTM

Organic sales growth, % RTM

MSEK %

0

2

4

6

8

10

12

14

0

200

400

600

800

1,000

1,200

1,400

Q3 Q4 Q1 Q2 Q3

2014 2015

Operating result (EBITDA) RTM

Op margin (EBITDA, % RTM

MSEK %

0

1

2

3

4

5

6

7

0

100

200

300

400

500

600

700

Q3 Q4 Q1 Q2 Q3

2014 2015

Net capital expenditure, RTM

In % of sales, RTM

MSEK %

Financial targets

25

Questions & Answers