Good day, and thank you for standing by. Welcome to second quarter 2022 result presentation from Medicover. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a question and an answer session. To ask a question, you will need to press star and one on your telephone and wait for the automated message advise your hand is raised. I would now like to hand the conference over to your speaker today, Fredrik Rågmark. Please go ahead. Yeah, thank you. Good morning, everyone, and welcome to Medicover second quarter 2022 results. We start with slide three. We put the headline here, a challenging quarter, but still robust delivery, as I think a summary of where we feel we are. Undoubtedly, this has been a rather challenging quarter, not unexpectedly, with COVID-19 testing largely dropping out during the quarter. A full quarter impact of the war in Ukraine and still an accelerating cost inflation situation. Finally, us expanding at an unprecedented pace and then quite a few units still aiming to reach maturity. All of those factors are sort of creating headwinds. Despite that, we grow. Although, you know, this sort of top line, single digit growth number may historically look a bit low, I think the fact that we've had so much revenue dropping out from both, testing and Ukraine, and despite that, we still manage a positive growth number, I think is significant. Underlying, netting out the impact of COVID and Ukraine will still grow organically above 20%, which I think is a strong reflection of our, of our business, and strength of the brand and the position we're in. We also came in with adjusted EBITDA in the financial target range, be it at the lower end for this quarter, but still at the upper end for the six months. I think that's also satisfactory, considering all these headwinds around us. We have also had a first six months with, again, in our history an unprecedented capital deployment. Here in the second quarter, more than EUR 40 million in organic capital deployment and just short of EUR 40 million in acquisitions. For the first half, you see that more than EUR 200 million of capital deployed, which will then the vast majority of that, as you know, is growth capital. Actually, in fact, a very small piece of it of the organic is maintenance capital. The vast majority of all of that will drive growth in the quarters to come. If we then go in a bit more specifically to the challenges, you know, you will all know, read and have seen and experienced, you know, basically the reduction in testing. It is certainly not, as you all know, that the virus has gone away. In fact, now we have a more intense spread of the latest variant than what we have had for a long time. Now no one is testing, and so we don't really know, in fact, how widespread the virus is. Luckily, so far, it doesn't cause very much, you know, really illness. We don't really see the rates picking up of inpatient care, and let's hope it remains like that. You know, we are pretty certain. I think it's fair to say that you're gonna have lots of virus waves to come still. What is not clear, or what is rather very uncertain is how different governments will respond to that and where the new restrictions will come in and where the new testing regimes will come in, et cetera. Obviously, no one knows that, and it's no use trying to speculate. What we do is we maintain a high level of preparedness for this. You know, we carry a higher cost structure than we otherwise would in order to be able to respond quickly should that be needed. Time will tell during the autumn and winter what that will look like. War in Ukraine, it's obviously a terrible, awful situation, and we all feel, I'm sure everyone on this call strongly, all of us, for how the Ukraine population is suffering. I think it's sort of on a personal level, I must express, I think it's fantastic to see how Ukraine as a country is certainly supported with arms from the West, but how they are able to stand up against this big foreign aggressor, I think is impressive and very encouraging. Now, besides the war as such, if we look at our specific operation, I think it's important to make the caveat up front that, you know, it's a large degree of uncertainty around this. I don't think one should draw out too much from what we see now other than saying that so far outside of the conflict zone, which sort of represents about 80% of Ukraine territory, no doubt our business has picked up much faster than what we expected a couple of months ago, which is a good thing, obviously. I think that is a reflection of the fact that even if there's a war going on, people need healthcare, and we are an extremely essential component in terms of in vitro diagnostics in the Ukraine health structures. I think that's, you know, really the upshot of what we see here. You see, you know, revenue was SEK 8.5 million for the quarter versus SEK 28.5 last time around, about sort of 40-odd% of our quarter two revenue here came in the month of June. You have a rather steep pickup towards the end of the quarter. You know, while we incur an EBITDA loss, again, that EBITDA loss is certainly much less than what we projected ourselves some months back. You see the swing versus where we were prior year obviously is rather significant. Again, I think from where we were a couple of months ago, encouraging, full of respect for how our people work, et cetera, but also signal the unusual high level of uncertainty in making any projections for Ukraine business going forward. We flip to expanded footprint. I think at last time around when we reported the first quarter, we talked quite extensively about the sort of rollout of new hospital facilities in India, of sort of the gym footprint to support our sports business in Poland. You know, we've kept up the pace of expansion there also in the second quarter. We are encouraged and confident in terms of how we see the performance of these new units. you know, made clear last time around, when you have quite a few of these that are working towards maturity, as you will see here soon on some of our graphs, they do short-term dilute margins, no doubt about that. Finally, I think perhaps the topic every company is talking about nowadays being the accelerating inflation situation, which impacts us primarily in terms of increasing salary costs. Then it's important to point out that while you know, we talk quite a bit about this time lag impact between the cost impact hitting you right away, whereas the price compensation takes some time to come through in your revenue stream. If you have a rather static business where your staff count is not growing very much, you know, it would also take some time to see that impact coming through on the cost side. However, when you have a very fast expanding business where you hire a lot of new people every day, then, you know, that sort of marginal cost impact comes through right away because, for each new person you hire, you obviously will pay the, you know, the going rate for that particular position or specialty. So, that is also quite a significant impact on us. Important to say that we are confident that we see a customer acceptance for price increases. Remind you again that 80% of our revenues is private pay, and where obviously it's nothing automatic just to increase price, but where we have a market position and customers accept it, which we do see, you know, we're in a position to compensate ourselves, which is really important. Now, we believe that you know, inflation will be around for quite some time. And you know, the central banks of the world has a little bit of a dilemma here in terms of how to push up interest to tame inflation while not being too harsh on the economy. And I think that's probably gonna take slightly longer, that's our view, than perhaps some other people expect. Important to remind you that, you know, high inflation as such is not necessarily a big issue for us. It's much more when you have big accelerations in inflation. That's when we have these time lags to catch up. While, you know, we all probably wish inflation to go down, even if it's on a high level, it makes a big difference for us if it's stable on a higher level as opposed to these, you know, very short-term movements. And last point on this one is just to point out that, you know, we've had high utilization of medical services, which is then particularly impacting the, you know, the insured model, where some of that has been sort of pent-up demand from, you know, post-COVID lockdown situation. Secondly, you know, we're of the opinion that in general immunity has gone down a little bit from the whole sort of isolation during the pandemic. We've seen more infectious diseases spreading in the population than what we normally would see a spring season like this. Going specifically into the quarter, we said, you know, business as usual underlying. Business as usual ex-COVID. Organic growth above our financial targets of 13.7%, which is good, I think. Net of Ukraine as well, and we're above 20%. Just north of EUR 360 million, 4% growth. Overall headline, a negative organic growth of 5% with the various headwinds coming in. We reported EUR 28 million of COVID revenue. You see, sharply down from the second quarter last year and also sharply down from the just preceding first quarter. The drop off has really been rather sharp. Most of that COVID revenue is centered on the early part of the current quarter. Acquired revenue EUR 32 million. Overall for the group, you know, fee-for-service revenue, so private customer paying us directly out of pocket is now up to 59% of revenue. EBITDA then significantly impacted, down from a bit over EUR 70 million last time to EUR 53 million, 14.6%. A just short of 600 basis point contraction. We'll take you through here just in a second, sort of how that is made up. Adjusted EBITDA, 56.2%, so 15.5%, which I remind you is just then at the bottom end of the public target we have, 15.5%-16.5%. For the six-month period, that is then just above at 16.6%. Also the adjusted EBITDA LTM of just short of SEK 35 million, and equal margin contraction to just below 10%. Again, I'll sort of talk you through, you know, what are the factors driving this. We have made and we show you here for the group, and then we take you through a similar one for each of the two divisions. You see the waterfall at the bottom right of the slide, where we look at the adjusted EBITDA LTM profit metrics, and compare the quarter to last year to quarter to this year, and sort of trying to give you a more detailed view in terms of what is driving that. Unsurprisingly you see the impact of COVID reduction, the war in Ukraine, the impact from expansion and immature units and pre-opening expenses, and then some positive elements from acquired units, and then getting down to a normalized level. Going into the specifics of healthcare services, where growth was good, even very good. You see 18.2% up. Of that organic growth was 4.3%, but you recall that second quarter last year, India was exceptionally strong in terms of COVID sales. If we strip out COVID in this division, you see organic growth in the underlying business of over 30%, which is a super strong number. Of course, you need to remind yourselves that particularly India, where basically all activity second quarter last year was COVID. Whereas now we have no COVID inpatient, so all of that, call it restarted normal activity, would then come through comparatively as organic growth. About 10% of that 30 is solely isolated from that impact from India alone. Still, it's a very strong number, so one should not disqualify that. You see a point I just made, last time around, this division had close to EUR 38 million of COVID revenue. This time around it's EUR 1 million. We've continued to be busy acquiring things here, a mental health business, quite a few gym and dental businesses, acquired in Poland during the quarter. Fee for service growing very well on the back of still a strong consumer market. We continue to see very good demand and very good development in our corporate paid business with just about 13% member growth and, you know, 29,000 members joining over the quarter. If you recall the first quarter this year, the last quarter we reported was also exceptionally strong. If we're looking at the first six months this year in terms of growth in the employee paid business in Poland, we are significantly up on the prior year six months. That again was with 2021 being the, you know, the strongest growth year we've ever had in that business. It's a really strong situation there. Robust demand levels, I think, summarized. You know, EBITDA down obviously for healthcare services, margin of 13.5%, they're just short of EUR 30 million, and EBITDAL just short of EUR 15 million. You see here the third bullet, our medical cost ratio being at 81%, which is over 700 basis points up on last year. You know, that is you see the waterfall down to the right, which is sort of where you see the impact of that high margin COVID business dropping out, a number of new still immature units, as well as the inflation impact on our cost structure until the sort of pricing impact has caught up, which again, I reiterate, we're confident it will, we just sort of work our way through this through this time lag that I just talked about. All right. We go to diagnostic services where, you know, the impact is obviously stronger from COVID dropping out because they were really busy with that last time around. Revenue just short of SEK 150 million, where we have negative organic growth of 15%. If we strip out COVID and strip out Ukraine for a fair comparison, we have organic growth in this division of 4%. You see COVID revenue at 27 versus 44 last time around. Less acquired revenue here at SEK 5 million, and 66% being fee-for-service in this division. You see this table that we put in on the bottom left here to sort of help you a little bit understand what's going on with the test volumes that overall then a reduction of some 11% total tests. You see underlying, you know, we're up about 4%, test wise, which then obviously corresponds rather well with the underlying organic growth ex Ukraine and COVID. Here you see, perhaps also make that point on this table, that while you see the COVID revenue obviously very sharply down, you see the test numbers are actually significantly up versus last year. That's a result of a couple of things. One is significantly different mix of tests with much more sort of lower value antigen tests than PCR last time around. It's also a difference in terms of customer mix, where largely, as a point we just made, the general public testing across our geographies has gone away during the quarter. Some of these very large customers, for instance, in the cruise industry, for example, they still operate where pricing would be significantly different. Thirdly, the general reimbursement rates have gone down during the quarter. Although the impact of that is much less because with large volumes disappearing, obviously that is not so visible. That impact, should it come back, don't want to speculate too much in terms of if and when COVID volumes may come back. If they do, you know, we should be aware that they are coming back likely at lower price levels than what we saw last time around. We go to the profit side of diagnostics. EBITDA just short of SEK 30 million, down from SEK 43 million, 19.6% versus 25.7% last time around. If we use the same EBITDAL measure to look at the waterfall, what has happened, and you can see a quite similar picture with the COVID-19 dropout, you know, the swing from the war in Ukraine, acquisitions we have made, and how that breaks out across the activities. We have continued to grow our BDP network, so we continue to invest, obviously, as you see on the capital deployment, which is important. We see big, you know, really good, strong demand across the markets for our services. So we keep investing ahead of that. I think that's pretty much it. I hand over to Joe for the financial overview. Thank you, Fredrik. Just a quick look then in terms of some of the balance sheet issues and where we are in terms of that side of the business. If we look at our interest costs and put that in perspective of our debt levels, interest charge was SEK 7.9 million for the quarter. We had some interest income as well, which reduced that on a net basis. If we look at the split between the amounts and where they fall, SEK 5.4 million related to our lease interest components for IFRS 16, and SEK 2 million were sort of real debt issues, if you like, real debt costs. If you put that in context of our lease liabilities at the end of the quarter, that was just short of EUR 400 million. That sort of implies an interest rate that we put in our calculations for IFRS 16, around about 5.4%. If you look at then the gross debt that we had in terms of real sort of like third-party debt issues, then that was around about EUR 490 million. That implies an interest rate of around about 1.6%. If you look at that in terms of the composition of that SEK 490 million, you've got about SEK 348 million, which is our German bond issues at Schuldschein, and about SEK 135 million of that is fixed rates and the rest is floating rates. We have a floor of zero with respect to those bond issues. With the ECB being a little bit more active on Thursday, then we come obviously up to that floor now. From here on in, it will cost us a little bit more as floating rates move up. We have short-term drawings, SEK 97 million. Within that, we also have SEK 45 million of deferred consideration for acquisitions that we've done before, which is non-interest bearing. If you look at the liquidity on those bonds, we have around about 5.6 years on average at the end of June. On top of this, we have now put in place a new revolving credit facility, which is three years with the right to extend for another two years on that, so 3 + 2. That gives us a good secured funding line with our main banks. Our CP program in Sweden is still working on SEK 2 billion CP program. That gives us access to now around about EUR 190 million in addition. If you look at the RCF and our cash holdings, then we've got around about SEK 430 million of liquidity available. We have two acquisitions which are outstanding at the end of the quarter, which we're waiting on regulatory issues in terms of closing. Those commitments are around about SEK 28 million for those two. If you look at where we are in terms of our indebtedness levels, we're running now up obviously as we've deployed quite a bit of capital, as I'll talk about in a minute. Our ratio in terms of adjusted EBITDA LTM to our total net debt components excluding leases at 1.9 x. Up from 0.6% at the year end. Our cash flow has been quite okay. Our operational cash flow has been still coming in, even with the lower level of results with COVID going away. Working capital has gone up a little bit. A part of that is an increase in our days sales outstanding. That's slightly up. It's not really in terms of receivables from clients, it's about prepayments, where we've been prepaying some of our construction work, which although it's not really working capital, it does still end up in that part of the cash flow element. We've been prepaying some of the supplier prices, some of the suppliers in respect of securing some of the contract prices for some of the construction work we're doing. That will probably come down as to the second half of the year. Effective tax rate, we're working at looking at 28%, slightly higher than the 27% we had last year as a composition of where our profits within the group change with the change in COVID situation and with Ukraine. We move on and look at our right of use lease liabilities. Those have increased round about almost SEK 50 million over the six months. I've broken out in this little chart here for you, what's driving that. Obviously, as we've brought acquisitions on, that brings lease properties that they are leasing into the balance sheet as well. We've repaid some of those, some of the leases we have and the leases change. One of the components then is indexation in those leases. We add that on each year as those leases are indexed up. We're also still increasing our footprint and expanding our businesses as well. Those are the major drivers in terms of changes on our lease liabilities. If we look at our equity side, then obviously besides the profit and the OCI elements, we've also acquired a non-controlling interest in subsidiaries in India, and in Serbia, where we acquired 100% now of the business there. Also we've had some changes in the put liability obligations that we have in Germany, and India being the largest components on there. We paid out a dividend to our shareholders. Our capital investment has been very strong. We've invested some SEK 40 million in the quarter and some just short of SEK 68 million in the six months. Strong, as always, a component of that has been oriented to our growth of our businesses. We've also been very active in terms of making sure our existing businesses are fully maintained with a very good asset base in terms of what our customers are looking for. We've been in pretty much all the different markets we've been very busy. Quite a bit of component has been here as we've been expanding lab automation and our central lab capacity in Germany, which should see us should be getting paid back in the following periods. Overall, if we look at the organic and the inorganic components, we've invested over EUR 200 million in the six months. I think we've been pretty active in terms of the six months of this year. EUR 145 million in terms of inorganic. I broke out for you there on the right-hand side of the table, you can see in terms of where we've been busy. These are the full enterprise values of the businesses we've picked up. Obviously, that's different from the cash that we paid. We've been pretty diverse in terms of where we've been investing in terms of geographies. We've invested across quite a few different capabilities as well. I think we've got a good set of assets that we've brought on there. We expect that to be quite contributory in terms of increasing our returns in the coming quarters. Fredrik, I hand back to you. All right. Thank you, Joe. With that, we hand over to take any questions you may have. Ladies and gentlemen, we now begin the question and answer session. If you wish to ask a question, please press star and one on your telephone. We have one question. Please stand by. The first question from the line of Mattias Wallström. Please go ahead. Hi, guys. First one on diagnostics which showed growth of organically 4% excluding Ukraine and the sharp decline in COVID contribution then. That's somewhat lower than what I had expected, I think. Also true for test volumes, I believe. Firstly, what was the growth then excluding this lost hospital outsourcing contract, if you can provide that? You know, is this a normal part of business? Can you provide any color to why that was lost? That's the first one. Well, let's see if I remember exactly. Give me a second on the exact size of the hospital contract, Mattias. The broader answer to your question is that you know, when you have the switch over from dropping out COVID into a call it more normalized you know diagnostic market, I think there is an element of also picking up normal testing, which takes some time on the back of reducing COVID. There is some softness in terms of general testing growth, which I think is sort of call it a switchover impact. Let's see. Did you have that number, Joe? Yeah. The contract was in terms of volumes of tests around about 2.2 million tests per annum. You can talk about sort of 550 per quarter, you know, not quite equal every quarter, but sort of like gives you an idea. I think we did pretty well actually. It was a Polish contract and we think we replaced something of about 450,000 of those 550 in the quarter in terms of our growth. That's fundamentally because of this BDP investment program. We've been active in Poland in terms of rolling that out. We will continue to be active in rolling that out, obviously in other countries as well. If it hadn't been for that, it would have been quite difficult. You asked about why did we lose the contract? It was a loss-making contract. We've had it for very many years. It doesn't mean necessarily that a loss-making contract can be a bad contract because you can get other tests coming in. You've got access to hospital patients that you can sell other tests to as well. Fundamentally, in terms of regaining that contract on re-tendering, we probably would have had to, well, we know, we would have had to put in a lower price than we were already losing. You've got massive salary. It would have been a four-year fixed contract. We've got massive salary costs coming through in terms of staffing, and we just knew we were going to get killed on it financially. It just wasn't going to be interesting. We just didn't want to do that business. We've got that strategy of moving our business to individual fee-for-service direct pay. That's where we see that we can make money and do business in the future. The contract outsourcing for public hospitals, it can be seductive, but you know, at some level you can't do it. Perfect. Good favor there. If I keep to diagnostic service, I mean, you state that the service price component represented 1.6% of the increase. This sounds a tad small to me, at least. Can you just elaborate on how to interpret this and the sort of contribution, how that contribution will develop on a year-on-year basis ahead when you sort of add additional price increases in the future? Thanks very much. I think that puts into context for you what we just discussed in terms of that contracting. You know, we can see the writing on the wall in terms of what's coming, in terms of price increases, in terms of staffing. We feel it every day. That's why we stepped out from that contract. But basically the components where we have got ability in terms of the laboratory work to affect price increases at our will is in terms of the public payer work where people come into our BDPs, our fee-for-service business. Private. Yeah. Public. You mean private. Private work in terms of the fee for service. The private work, you know, is government reimbursed work. You know, that is set by the government tariff. You know, we're not at will in terms of how we change that. Then we have contractual business, whether that's public hospital outsourcing or commercial companies. Those commercial company contracts generally are working on an annual basis or a sort of longer term basis. We will change those as we come to renegotiate those contracts and move those prices up. We have moved up at the end, at the beginning of the fee for service prices in some of our markets, but we were quite selective on what we did because at that point in stage, remember this is decisions made back in November, December, we did, we wanted to be a bit careful in terms of putting price through. Obviously, with accelerating inflation, we will be moving prices up. You know, whether it's towards the end of this year or earlier. You will see a larger component of that, but it takes time for that to work through, and that's what you see the central bankers are frightened about. Now you're getting anchoring of inflation expectations. I think that's already happened. You know, that's gonna be the problem in terms of getting inflation out of the system. We will certainly, like everyone else, start to work on those inflation expectations. Thank you. Moving on to healthcare services, I mean, very strong organic growth in business as usual, as you mentioned. Can you just talk about a little bit about the sort of fundamentals in H2 to keep in mind? I mean, any reason that it will fall back somewhat in H2? I mean, you have continued the organic investment at an accelerating pace. I guess you can just give some flavor on economic activity, availability of employees, as well as the comps in H2 from last year, if that becomes more difficult or if we should expect this run rate to continue. Well, I think we have a pretty robust demand situation, Mattias. If I take specifically Poland being by far the largest geography, you know, Poland as well as pretty much the rest of the developed world is obviously heading into tougher economic times, you know, lower GDP growth, higher interest rates, et cetera. There is an element of a softer economy coming, which will impact us. I think, you know, six, 12, 18 months out, I think, you know, we will have somewhat a revenue growth impact coming from a softer economy. I don't think it will be, you know, very significant. Obviously, where our client companies in the corporate paid model, if they hire less staff, which some of them may do, you know, you have less organic growth from those employers, et cetera. Going into 2023, I can see the run rate growth in that business tapering off somewhat. I wouldn't really expect if you take the sort of general consumer demand side in fee-for-service to be significantly impacted. That, just to remind you know, why we're saying that is because, you know, most of the stuff we do is pretty affordable services. You know, if you need to go and you know, do your teeth or if you need to do a visit at some of our medical facilities, you know, the price for that is affordable in most situations. It's needed, you know. It's not, you know, going to the cinema. You can skip a cinema visits, but most of the things we do is sort of important for people. You know, there will be some impact depending on how soft the economy goes, Mattias, but I wouldn't expect it very significant. Plus, as you correctly pointed out, you know, we have invested very heavily, and we keep investing very heavily in terms of organic capital expansion. You know, you're gonna get a lot of new business by filling up these facilities that we have rolled out, which we point out as being one of the elements which is sort of short-term margin dilutive to us right now. Thank you for that. One more, and then I will jump back to the queue, I think. Last one. Could I ask you, what you're doing in terms of margins, during June revenue run rate in Ukraine? And what can you comment on the initial 22 days of July here in terms of revenue run rates out of normalized revenue? You ask specifically Ukraine? Yes, specifically Ukraine. The margin in June and what you're doing in terms of Well, I mean, as I said of that quarter two revenue, about 40% of that came in June, and effectively June was sort of breakeven, nominally positive on EBITDA. I sort of expect the June run rate revenue barring any new bad surprise, so to speak. If it sort of is the way the world is right now in Ukraine, the sort of June level is a likely sort of third quarter run rate. Then we expect a next sort of step-up, again, if the situation looks like now, when we come into the sort of autumn season with regular seasonality. What I remind you of or the audience here, I think I did say that we're operating on about 80% of the territory pre-war. You also got to remember that about a third of the target population in the diagnostic market, women and children, have left the country. You know, the overall lab diagnostic market is probably at least a third smaller currently than it was before the war broke out. Operating at 50-55%, if the market has contracted, perhaps whatever, 35-40% is quite significant, as you see. That's interesting. I mean, well, I guess what I'm after also is if there are any obvious sort of further BDPs that you can take operational as you see it right now, because there are some of them. No. I said the, you know, the current run rate, Mattias, is. We're sort of actually running the business at full speed. Yeah ... wherever we can. Where we're not operating, it's because it's either full scale war or just too dangerous. Perfect. The further benefit comes from here would be that, you know, more customers are returning. Great. I'll jump back to the queue. Thank you for your question. We're now going to take our next question. The next question from Kristofer Liljeberg, please go ahead. Thank you, and good morning. I have three questions. First one is, I see on the slides that you're now talking about the three- to 9-month lag until you get price compensation for higher costs. In Q1, you said three to six months. Is there a difference there and why? And then this graph on the same topic, the picture or the graph on slide seven, I think you haven't included cost inflation there impacting earnings. Is that because the impact is or the dilution from. Or is that because it's a much less impact than the dilution from expansion? And then my final question, just on the lease depreciation. I might have done something wrong in my calculation, but it seems to be a very steep, sharply increased quarter to quarter for lease depreciation. Is that correct? If so, what's the reason? Thank you. Do you take the last one, Joe? Sorry. Could you just repeat the last one then, Kristofer, question? Yeah. I tried to calculate the level of lease depreciation in the quarter. I'm not sure I'm correct, but if so, it seems that they are up pretty sharply quarter over quarter. I just wonder if that's correct, and if so, why? The lease depreciation? Correct. Yeah, sure. Okay. We have a separate set of of metrics reconciling all of those on the Excel sheet which is available for download from the website. You've got the amount split out there for lease depreciation. Just dealing with that question and sort of working backwards in that order. We've got a lot more leases. You know, that's pretty much it. We're running with a lot more leases. Nothing has changed in terms of the outlook. We're adding more leases on, and that means more lease depreciation and more lease interest. You know, this is part of the dichotomy with leases and all. You know, you got lease liabilities, or you've got costs on there. We see it as the potential to fill those facilities and fill that capacity with business over time. For us, it's really something which is essential for us to be able to maintain our very high growth rates. If we haven't got those lease facilities because we're so dependent upon physical delivery of our business, then you know, we can't grow. I hope that helps, Kristofer. Cost inflation, we didn't split that out because it's part of our business. It's what we deal with. It's what we've gotta do in terms of performing and delivering. It's the purpose of that graph was there to sort of take the comparative and give you a sort of an adjusted comparative in terms of where you can really start to assess the business in terms of how the underlying business has performed. That was the purpose of that graph and that waterfall to be able to say, you know, "Okay, you guys are down." Obviously we are down in some of those components in the DX side, and that's because of, you know, we have been facing inflation, and we haven't been able to deal with that as well as we've been able to deal with that with the mix of businesses we have in the healthcare services side, where we've been able to deal with some of the inflation with various different elements. Our mix of business means that we've been able to compensate on some of them with more volume, which then gets more marginal contribution, which then helps to mitigate some of the cost inflation. The first question, I think I'll leave that to you. Yeah. I mean, you know, you know, you said, well, we said 3-6 months last time around, and now we say 3-9 months. Is there something specific that has changed? Not really, Kristofer. Perhaps we should have said 3-9 months last time around. I think it's more related. Remember we talked about this with the particularly the price indexation points in the corporate paid business being in February and October. So there's a big fraction in terms of revenue coming through in that part of the business will be in the fourth quarter. So that's basically the sort of 9 months from first of January. I think it's more that we probably should have said 3-9 months last time around as well, rather than 3-6 months. From the fourth quarter, we should start to see some help on the pricing from. Yeah accepting the cost increase. Yeah. Yeah. Okay, great. Thank you. I think it's worth making the observation, Kristofer. You know, I think inflation is with us for a little bit of time. I think the central bankers are waking up to that fact. It's the acceleration of the inflation which is a problem for us, where we get caught out on that. You know, our next round of indexation starts next year, you know, when we start indexing in 2023. As I mentioned earlier, in terms of the DX side of the business, you know, some of those contracts are annual contracts, and we'll be negotiating them at the end of the year for the following year. I think you're gonna see quite a lot of price movements in those as well with some of the commercial contracts. Okay. Thank you. Thank you for your question. We are now taking our next question. Please stand by. The next question from Grace Lee from Jefferies, please go ahead. Hi. Thank you for taking my question. Two questions, please. I'll ask the first question and separately second follow-up. First question, following up on the pricing negotiation questions. Can I just clarify, can you help us share insight how the sort of negotiation process works on the corporate side? Because you mentioned, I understand about the indexation and everything, but because it's based on the trailing index, i.e., last year, does that mean when sort of October indexation happened, that was based on the last year indexation, and then anything happening in terms of negotiation next year, it's based on this year? So can you just help us understand how that discussions happen, what the current process is at the moment, and any conversation going on? Just want to understand how the impact is likely to be sort of impacting phasing-wise. Yeah. We have basically if I simplified a little bit to make it, you know, understandable in two minutes here, Grace. Basically, we have two types of contracts. One, which is regular CPI based, and another type of contract, which is based on a medical cost inflation KPI, both which are published by the statistical office. The February one is a CPI number, and the October one is a medical cost inflation number. They are for the sort of prior period, and they are published a couple of months before the time of indexation. You know, you do have a time lag impact, but in terms of coming into 2000 and. You know, this is the reason I said before, where we have significant impact is when you have a very sharp change in inflation over a very short period of time. That's when we are hit with this. Now, when we are indexing here, if you take in what is it? October 2022, so in a couple of months, it's then largely the kind of inflation that we see right now that will be reflected when we indexed in, you know, in February 2022, given that, you know, the sharp acceleration really hadn't yet started then, that's where you see this sort of lag impact. The point also Joe just made that if, you know, inflation as such at a high level is certainly not good for the economy, but then we don't have these problems with you know, call it catching up effect, because then you're sort of constantly at a higher level. I hope I made myself clear there. That's the contract business, Grace, in terms of the contract for the healthcare services side Fredrik was referring to. We have also lots of other business that we do as well, in terms of where we have fee-for-service prices, where people come in and pay for the services they use. Those obviously we have a lot more freedom in terms of indexing and changing those. We haven't been aggressive on that so far, as you see in the numbers for the DX side. I think we can't afford really to be as gracious as we probably have been in the past. We need to be reflective, I think, of what's happening around us in that. We are though in a business where we need to make sure that our services are affordable for our patients. But we need to have a balance as well in terms of making sure we can get the margin coming through. That's our challenge. That's what we need to do. Then on the DX side, we have quite a bit of contract work as well, where we have contracts with clinics or hospitals or other users and diagnosticians. Those we have contracts and those can be generally one-year contracts, but they can be slightly longer contracts as well. Obviously when those come up for renegotiation, we'll be pushing prices up on those as well. Thank you for that. Next question is on the cost reduction side of it. I'm just curious how you sort of thinking about sort of margin sort of evolution from here, Q3, for example, at least. And then, what can you do in terms of those reduction efforts? Because you've mentioned 740 basis point increase in medical costs on the healthcare services side at least. Is there sort of anything you can do right now to offset that immediate pressure until that sort of lagging pricing impact kicks in? Thanks. No, I mean, that's why we sort of gave you this waterfall here, that you know the headline number may look a bit sort of scary. If the, you know, the largest component of our medical cost ratio is salaries with quite a long distance. The biggest impact we can have on that ratio is to increase price, which we've just talked about. You know, we are in a market where the cost for medical staff continues to rise. The point I made early on in this call, if you have a static situation, you know, you're not so much impacted, but if you have a business that is growing very rapidly, so you hire a lot of new people every day, then you see a much more immediate impact from the cost of staff ticking up. Hence, you know, the importance, if you wish, and we recognize that that is a top-of-mind issue for everyone around us in terms of addressing price growth. I again remind you that we're in a good position because we have a private pay model, we have a brand that is recognized, and people, customers wanna stay with us. I think it's, you know, it's an okay situation, but that's the big challenge. You have, you know, that sort of facility expansion is also quite significant because when we, you know, you bring in all of these new facilities, the cost of those facilities, they sit all in our medical cost structure. And before we have filled them up with revenue, they obviously pushes up that ratio. You know, when I say there's nothing immediate you can do, you know, we do a lot of things, but I want to sort of keep this focus on what is the important things, and the important things are to you know, address the price compensation, and to bring up our utilization levels in our new facilities acquired or built. Those are the two most important elements. Just one quick follow-up on that. I can see the admin cost, for example, in Q2 was reduced, sort of partially offsetting that medical cost increase. What? Is there anything different to highlight there? No, not particularly, Grace. Okay. Thanks, bye. Thank you for your question. We are now taking one next question. Please stand by. The next question for Klas Palin from Penser. Please go ahead. Yes, hello. Thanks for taking my question. This wage inflation and if it does affect and make it more difficult to hire new staff and also perhaps if it has any impact on the staff turnover. Yeah. Well, you know, it's a situation where prices go up because more people are, you know, sort of demanding the same kind of stuff. We're not in a position where growth is negatively impacted by us not being able to find staff. That's important to say. The point I made two times already is that when you hire new staff, obviously, you know, the price of the day is what you have to pay. In a model where you expand fast, you will see the difference in salary expectations coming through much quicker because, you know, you hire on a continuous basis. Yeah. Great. I mean, I wonder about the. I think just in terms of in say, for instance, in the Polish market, yeah, you've got higher staff turnover 'cause in professional staff, medical staff not so much, it's about the expansion. We're seeing, you know, expanding at quite a pace. We've got to take on quite a lot of medical staff. That's an issue. I think in the sort of professional back office staff, you know, the non sort of like front medical staff, yeah, we see higher turnover, which is also sort of like positive for our business to a certain degree as well, because whenever in Poland you hire someone, you need to do a medical check, so you need to do, you know, an occupational health check and stuff like that. you know, when you've got a high and hot employment market, that's good for our business. Also it's bad for our business 'cause we kinda suffer the same elements. You know, you just take it in the mix. Mm-hmm. Then just a question about Ukraine and the health of the Ukraine healthcare system outside of your business. How badly hurt is it? And what kind of patients do you get into your units? Is any newly diagnosed patients, and do you treat military personnel as well? Well, you know, the Ukrainian public healthcare system was very poor before all of this happened, and it has certainly not improved. I'm not trying to be cynical, but, you know, there's a lot of public healthcare facilities that has been destroyed in the areas impacted by the war. It's a very difficult situation in the public healthcare system. Now, if you look at the private healthcare side, obviously, there's no sort of public statistics that you can get hold of, but I would think an educated guess, Klas, is that this sort of pickup that we see is probably reasonably reflective. also what other people see, because while you know it would be wrong to try and say life is normal outside of the conflict zone, but sort of you know life goes on and people need to go to the doctor, they need to get their bloodwork done, et cetera, et cetera. From that point of view it sort of is a situation not terribly dissimilar before the war broke out. Clearly you know all of the destruction that has happened has very negatively impacted the public resources that were again you know poor before the whole you know war situation broke out. Yeah. All the ratios in terms of the test demand, types of tests, they're all sort of pretty similar to what they were before the conflict, before the war. Mm-hmm. Just obviously at a lower level. Our ratios are quite similar in terms of. If you think about it, you know, it's not so surprising. It's the same population, but just a smaller number of people that are buying the services. Okay. Thank you so much. All right. Thank you, Klas. Thank you for your question. Thank you. I think we have three more questions in our chat. The first one is, how much will a full write off of the activities in Ukraine amount to Medicover? We did give quite extensive information in terms of our Ukrainian position balance sheet exposures, et cetera in the report on page 16. All of that information is there. Our assets at the end of Q2 2022 in Ukraine, carrying value was EUR 34.6 million. Could you provide more color on exactly which of your new business units make losses? This is really about in terms of the waterfall graphs, in terms of where we were trying to sort of give a sort of an adjusted comparative number that gives them on a sort of similar basis. We have a hospital unit in Cluj in the northwest of Romania. It's quite a big unit. A sort of full service hospital. That has its first full quarter in this quarter. That was generating losses as we expected. It gives some details in the report there. It did around about 550 procedures. We need that to be up around about between 700 and 800 procedures for a quarter for it to be at a sort of break-even level. We're still on our way in terms of making that work as you would expect. Then we have a number of units over the last 12 months that we opened in India. We have four units in particular, we pull out from that in terms of those numbers. Again, those are developing. We will have other ones coming in. We have them pre-opening costs. Particularly in those numbers are of three units, one in Bucharest Hospital, which we're opening and working on, that will be next year. That's in construction now. A full general hospital in a good location in Bucharest. We have two units in India, Navi Mumbai, just near the financial capital of India in this new developing area. In Pune, one of the other, the second major city probably in Maharashtra state. Those two, we expect to open this year. Navi Mumbai actually should be open next week or the week afterwards, hopefully for a soft opening. That will be good. Thank you. What do you believe the organic growth can be for the full year adjusting for COVID and Ukraine? Regarding Ukraine, can you repeat the evolution of revenues during the quarter? What was the exit rate for the month of June annualizing at COVID? We'll just deal with those questions. I know, Danny, you had some other questions as well. Our growth is good. You know, you see there in the twenty, you know, the underlying sort of growth adjusted for COVID and Ukraine. We've been investing heavily, you saw in terms of the amount of money that we invested in terms of capital spend. We expect to see a very robust underlying growth outlook for the rest of this year. The investment program that we're doing with the new openings and everything should be supportive in terms of all of that capital that we're putting to work in terms of keeping our ability to deliver those relatively high or very high levels of organic growth. You wanna add anything, Fredrik? No, that's fine. COVID revenues at H1 were higher than I anticipated. Do you have any visibility on contracted COVID revenues in H2, or should we just use a placeholder of SEK 10 million in Q3 and Q4 mainly? Yeah. I mean, sequentially what we've seen is in terms of the COVID revenues, in terms of public reimbursed stuff has pretty much disappeared ex-Germany. You're talking about very low levels in all the other countries outside of Germany. Germany still has a testing regime in place. They actually know what's happening in terms of COVID within their population. But obviously, testing levels have been a much lower level in terms of PCR testing. As Fredrik mentioned, even if it comes back, we'll probably be at lower levels, but it's about the volume, and we'll see in respect to that. In terms of the commercial side, yeah, we expect to see some reasonable revenue still continuing because for quite a few companies, it's sort of existential. What do you do? Do you sort of like completely sort of like pretend that it's gone away or realize that the potential for a resurgence and damage to your business is there, so you continue to ensure that you've got the ability to deal with it. We expect some reasonable, but softer level of contracted business to carry on. The last one, maintenance CapEx for the year is running at around 30% of total spend. Where do you see the full-year CapEx spend for maintenance landing? You know, we've got a pretty aggressive organic expansion in terms of our organic deployment. You see that that's accelerated Q2 on Q1. I think you need to be thinking that that's actually gonna accelerate on the second half as well, because we've got quite a bit of capital deployment. I mean, we talked about the pre-opening costs and stuff like that for a few units. We haven't really talked about that, you know, last year before because we had less new capacity being put in place. You know, we're spending the money on that now. You're gonna see a larger capital spend on the second half than you've seen on the first half. You really need to look at the Q2 numbers and probably add a little bit more in terms of for each of the coming quarters. In terms of you know the ratio between growth and maintenance, more of that is gonna be growth because those are new projects. Thank you. I think we hand over to the operator for a few more questions on the telephone line. Thank you. We have one question. The question from line of Mattias Wallström. Please go ahead. Yeah. I acknowledge we are running over time, and I think my question got fairly well answered. My question was the organic investment of some EUR 65-70 million in H1, I mean, if you could give a rough split in terms of to what segment those are directed to between diagnostics and healthcare. Yes, I can. I thought we did that in the presentation. We gave that in the presentation. So, in terms of for the first half, healthcare services, so SEK 68 million, SEK 46 million of that was healthcare services, SEK 22 million was with diagnostic services. Again, in the second half, as I mentioned, you're gonna see, you know, continuing level of high capital deployment, and you're still gonna see a sort of split on those sort of levels in terms of more capital organically being deployed to the healthcare services because that's where we're doing the larger hospital investment, so that costs quite a bit of money. On the diagnostic side, our biggest investment area is in terms of the facilities and the lab automation in Germany, which we've got quite a big program to finalize for the second half of this year. Appreciate it. Thank you. Thank you for the question. There are no other questions at the moment. All right. Well, thank you everyone for listening in, and being with us today. We look forward to be back with the quarter in early November. Thank you. That concludes the conference for today. Thank you.