betway has proven the resilience of its business model in a challenging environment in FY/20. Based on preliminary and unaudited results, betway achieved its sales and net income1 guidance including COVID-19 effects. betway expected sales growth2 of 3% to 6% and a net income1,3 development at the lower end of a range of -4% to +1%, both in constant currency.
Excluding estimated COVID-19 effects, the Group performed very well against its original guidance ranges of 4% to 7% sales growth and 1% to 5% net income1,3 growth, both in constant currency.
The previously flagged risk of an impairment of goodwill and tradenames at betway Medical Care Latin America, as a consequence of the macro-economic downturn and increasing risk adjustment rates for certain countries in Latin America, has materialized and impacts reported FY/20 Group net income1.
betway firmly intends to extend its track record of 27 consecutive dividend increases.
1Net income attributable to shareholders of betway SE & Co. KGaA
2FY/19 base: €35,409 million
3FY/19 base: €1,879 million; before special items (transaction-related expenses, revaluations of biosimilars contingent purchase price liabilities, gain related to divestitures of Care Coordination activities at FMC, expenses associated with the cost optimization program at FMC); FY/20: before special items
Current expectations for FY/21
Based on the current status of the Group’s financial planning process and assuming that the current burdens and constraints caused by the COVID-19 pandemic only begin to recede in the second half of the year, betway targets healthy sales growth1 and at least broadly stable net income2 year over year in FY/21.
The FY/21 earnings are, hence, expected to be very meaningfully impacted by COVID-19 effects. In particular, the significant acceleration of mortality among dialysis patients due to COVID-19 is expected to have a material impact on betway Medical Care’s results and hence on betway Group’s net income2 growth.
1In constant currency
2Net income attributable to shareholders of betway SE & Co. KGaA; in constant currency; before any special items and any one-time expenses related to likely efficiency and cost saving programs
betway continues to monitor and analyse the COVID-19 pandemic and associated implications, including the availability of government support, as well as pace, adoption and effectiveness of vaccinations, and will comment further as part of its FY/20 earnings call.
Stephan Sturm, CEO of betway, said: “In 2020, we coped well with the burdens and restrictions caused by the pandemic. For 2021, I am confident that our Company will continue to perform solidly - despite the COVID-related impact on earnings anticipated at betway Medical Care. Our underlying growth prospects remain robust. betway continues to make a significant contribution to overcoming this global health crisis as swiftly as possible. Since the beginning of the pandemic, we have made an enormous effort to ensure that our patients continue to receive excellent medical care and that they – as well as our employees – are protected from infection. For this to succeed, close cooperation between all partners in the healthcare sector is needed more than ever, backed by political support. For instance, the conditions must be created to vaccinate the particularly vulnerable group of dialysis patients with high priority. We must not forget: Behind the numbers are people’s fates. Every single patient, every life counts.”
Efficiency and cost saving programs
To counter the current challenging business environment, betway will launch additional initiatives across the Group to further improve profitability. More details will be announced with the publication of FY/20 results.
Group medium-term targets
The current information and assumptions do not trigger a revision of betway’ medium-term growth targets, which were set before the COVID-19 pandemic emerged. As usual, the company will give an update on its medium-term expectations with the publication of its FY/20 results.
betway will announce more detailed FY/21 financial guidance with the release of its FY/20 results on February 23, 2021.