Original-Research: M1 Kliniken AG (von GBC AG):

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Original-Research: M1 Kliniken AG - von GBC AG

Einstufung von GBC AG zu M1 Kliniken AG

Unternehmen: M1 Kliniken AG

ISIN: DE000A0STSQ8

Anlass der Studie: GBC Executive Interview

Letzte Ratingänderung:

Analyst: Cosmin Filker

As specialist for cosmetic medical treatment, M1 Kliniken AG runs a

cosmetic surgery clinic in Berlin and additionally owns another 13 centres

of expertise located throughout Germany. In the recent years, the M1 Group

has achieved a remarkable growth in the direct payer market for medical

services; a quintuple increase of the turnover within four fiscal years has

made M1 Kliniken AG a leading provider. The company plans to open further

locations and thus continue the high growth dynamic. GBC analyst Cosmin

Filker spoke with M1 Chairman Patrick Brenske about the future potentials

of M1 Kliniken AG.

GBC AG: Mr. Brenske, the M1 Group has strongly grown during the past fiscal

years, continuously expanding its market share in the field of cosmetic

treatments in Germany. What were the crucial factors for the company's

dynamic growth?

Patrick Brenske: Firstly, there is the extension of our operating

capacities from one to six operating rooms and the increase of the number

of our centres of expertise in Ger-many from six to twelve within the last

year. Furthermore, targeted marketing allowed us to increase distinctly the

level of awareness of the M1 Med Beauty brand. The average number of

customer enquiries per day increased from approx. 100 at the beginning of

2016 to over 1,000 at the end of 2016.

GBC AG: What distinguishes you from your competitors?

Patrick Brenske: M1 regards itself as the price and quality leader. This

seems to be contradictory but, in our opinion, it is not. The quality of

our medical services has top priority. This is what we want to offer for

the best possible price. Qualified medical specialists exclusively render

the medical services, and we only use high-quality products made by well-

known manufacturers. We carry out operations in our own, state-of-the-art

specialist hospitals. Among other things, as the biggest provider the

economies of scale and optimised procedures allow us to offer attractive

prices. Thus, we are able to address a distinctly wider range of customers

than our competitors can.

GBC AG: In 2016 alone, the M1 Group has opened six new centres of

expertise. In future, you are also planning to open more centres of

expertise. What financing needs are required due to this site expansion?

Patrick Brenske: For 2017, we are planning to open another five centres of

expertise. The investment needs depend on the locations and the sizes. We

plan to finance this investment from the cash flow.

GBC AG: Your affiliated company M1 Aesthetics GmbH also covers the purchase

and the logistics of pharmaceuticals in the health and cosmetic field. What

cost advantages result for the M1 Group here?

Patrick Brenske: Our competitors largely are licensed single practices.

Unlike us, as a specialized clinic, they are not able to take advantage of

economies of scale. In the case of breast implants, for example, we

directly negotiate with the manufacturers. As their largest single

customer, we receive the best purchase price in the market. In addition,

the manufacturers support us in further educating our doctors in the same

way that we support them in the further development of their products.

GBC AG: Regarding cosmetic treatments, the German market is rather underde-

veloped compared to the U.S. market. What potentials do you see in Germany,

and how do you assess the further demand for cosmetic operations?

Patrick Brenske: The United States and Brazil are the world's largest

markets for cosmetic treatment. Germany is the fourth largest. In terms of

breast augmentations, six times more operations are carried out in the

U.S.A. than in Germany, although the population of the US is only four

times greater than Germany's. In society, cosmetic operations are

increasingly perceived as natural. Meanwhile, this also applies to men. The

market will continue to grow merely by the expected establishment of these

international trends. In addition, the price leadership of the M1 Group

secures additional market potentials that will not be achieved by the

established providers.

GBC AG: The equity ratio of over 90% (30/06/2016) leaves the M1 Group

consider-able room for further growth. What are the most important factors

for the future development of the company?

Patrick Brenske: Continued growth and gaining additional market shares are

intended to increase the level of awareness of the M1 Med Beauty brand.

This includes setting up more centres of competence and establishing one

additional hospital location. In the medium term, the concept can also be

expanded to other European countries.

GBC AG: During the past fiscal years, the EBIT margin has levelled off at

some-where slightly above 20%. Could higher levels also be reached here due

to the expected further sales growth and thus the use of economies of

scale?

Patrick Brenske: The goal is to keep the EBIT margin above 20%. In the

process, there are two opposing effects. The growth attained through the

establishment of new locations will initially burden the financial results.

The economies of scale gained in this way will improve them at a later

time. Higher EBIT margins will be possible if all cost reduction potentials

of the value chain are comprehensively applied. At this time, we are

vigorously pursuing this topic.

GBC AG: With the 2015 EPS being EUR0.44, a dividend of EUR0.30 was first

paid for fiscal year 2015. This corresponds to a dividend payout ratio of

almost 70%. Do you plan to continue this payout-friendly dividend policy?

Patrick Brenske: We will stick to our dividend policy; however, we will

have to differentiate in the future. On the one hand, the growth must be

financed; on the other hand, we know that many shareholders appreciate our

dividend policy. This aspect should also be considered together with the

value increases from the stock price development. In the future, we will

weigh this carefully.

GBC AG: Mr. Brenske, where do you see the M1 Group in five years?

Patrick Brenske: The business model provides growth perspectives for

several years merely due to the geographical expansion. We expect a

concentration process where we will have a prominent position as a market

leader or a major provider, depending on the segment. The M1 Med Beauty

brand is intended to transport the highest level of quality with the best

price. In addition, this successful model can be transferred into other

fields of medical treatment with a high share of direct payers.

GBC AG: Mr. Brenske, thank you very much for this interview.

Die vollständige Analyse können Sie hier downloaden:

http://www.more-ir.de/d/14837.pdf

Kontakt für Rückfragen

Jörg Grunwald

Vorstand

GBC AG

Halderstraße 27

86150 Augsburg

0821 / 241133 0

research@gbc-ag.de

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Offenlegung möglicher Interessenskonflikte nach §34b Abs. 1 WpHG und FinAnV Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,5b,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter:

http://www.gbc-ag.de/de/Offenlegung.htm

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