Medicover: From build-out to fill-up - ABG
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* Focus on sport/wellness, dental and smaller centres
* Adj. EBITDAaL margin expansion: 11.7% to 12.9% during '26e-'28e
* ~25% below its historical average on NTM EV/EBITDA
Polish capex skewing to margin-accretive growth levers
Last Wednesday we visited Medicover’s hospitals and clinics in Warsaw, with discussions centred on Poland as a core growth engine and driver of margin expansion over the next few years. In line with our recent investorupdate takeaways, we expect capital allocation to become more aligned with the sales mix, implying a greater focus on Poland, but with a clearer tilt towards margin-accretive investment: 1) sports/wellness (incl. CityFit integration), 2) dental, and 3) smaller, local centres that broaden the network, improve convenience and lift fee-for-service capture.
Utilisation and network effects now the playbook
Management reiterated that utilisation still “leaves room” for growth without a step-up in capex, with prepaid primary care/occupational health acting as the anchor and a denser layer of smaller sites designed to drive referral flows, improve access and capture more FFS. Wellness is increasingly positioned as part of the same ecosystem, supporting retention and crosssell as healthcare shifts from medicine towards lifestyle. At group level, capex is expected to stay around 6% of sales, and encouragingly, in '25 ROIC increased to 13% driven by utilisation/efficiency, which we believe will continue over the coming years.
No estimate/FVR changes, trading below historical averages
We make no changes to estimates or our FVR. We still forecast organic growth of 12-10% for ’26e-’28e and adj. EBITDAaL margins expanding from 11.7% to 12.9% (adj. EBITDA 16.9% to 18.1% for '26e to '28e), driven by mix and operating leverage as these Polish businesses scale. As a reference point, Benefit Systems, a Polish listed fitness peer, delivered an EBITDA margin of ~29% in FY’24, which we view as supportive for the long-term profitability potential in Polish sports/wellness as Medicover continues to scale its fitness business. On valuation, the share is still trading ~40-50% below what our regressions would suggest and ~20-25% below historical averages on NTM EV/EBITDA and EV/EBITA.
* Adj. EBITDAaL margin expansion: 11.7% to 12.9% during '26e-'28e
* ~25% below its historical average on NTM EV/EBITDA
Polish capex skewing to margin-accretive growth levers
Last Wednesday we visited Medicover’s hospitals and clinics in Warsaw, with discussions centred on Poland as a core growth engine and driver of margin expansion over the next few years. In line with our recent investorupdate takeaways, we expect capital allocation to become more aligned with the sales mix, implying a greater focus on Poland, but with a clearer tilt towards margin-accretive investment: 1) sports/wellness (incl. CityFit integration), 2) dental, and 3) smaller, local centres that broaden the network, improve convenience and lift fee-for-service capture.
Utilisation and network effects now the playbook
Management reiterated that utilisation still “leaves room” for growth without a step-up in capex, with prepaid primary care/occupational health acting as the anchor and a denser layer of smaller sites designed to drive referral flows, improve access and capture more FFS. Wellness is increasingly positioned as part of the same ecosystem, supporting retention and crosssell as healthcare shifts from medicine towards lifestyle. At group level, capex is expected to stay around 6% of sales, and encouragingly, in '25 ROIC increased to 13% driven by utilisation/efficiency, which we believe will continue over the coming years.
No estimate/FVR changes, trading below historical averages
We make no changes to estimates or our FVR. We still forecast organic growth of 12-10% for ’26e-’28e and adj. EBITDAaL margins expanding from 11.7% to 12.9% (adj. EBITDA 16.9% to 18.1% for '26e to '28e), driven by mix and operating leverage as these Polish businesses scale. As a reference point, Benefit Systems, a Polish listed fitness peer, delivered an EBITDA margin of ~29% in FY’24, which we view as supportive for the long-term profitability potential in Polish sports/wellness as Medicover continues to scale its fitness business. On valuation, the share is still trading ~40-50% below what our regressions would suggest and ~20-25% below historical averages on NTM EV/EBITDA and EV/EBITA.